Dive Brief:
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The Southern Maryland Electric Cooperative (SMECO) has filed a complaint with the Federal Energy Regulatory Commission (FERC) over the state’s community solar program, Politico reports.
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SMECO claims that the Maryland Public Service Commission (PSC) violated federal law by making utilities buy excess generation from community solar projects at retail rates.
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The co-op argues the federal Public Utility Regulatory Policies Act (PURPA) limits the size of qualifying power plants to 80 MW and calls for payments at what it would have cost a utility to generate the power if not for the qualifying plant, known as the avoided cost, rather than at retail rates.
Dive Insight:
In June, Maryland regulators approved regulations establishing a three-year community solar pilot program in the state.
Community solar programs have been championed as a way of extending the benefits of solar power beyond well-to-do homeowners by making solar power available to renters and residents of subsidized housing.
In many states, however, developers rely on PURPA to make their projects economically viable. The federal law obliges utilities to buy the output of renewable and small power projects, if they meet the qualifications of the law. Those projects are paid avoided costs as established by individual states. Without the law, developers say, they would not have a market for their projects’ output.
As power prices have fallen in recent years, avoided cost payments have become controversial because in many places they have not been adjusted to match prevailing wholesale power prices.
That has resulted in battles in many states and has prompted FERC to review PURPA’s role in a changing energy market.
