Dive Brief:
- The Federal Energy Regulatory Commission last week rejected Montana's decision to suspend gauranteed rates for small solar facilities, determining the state's actions were inconsistent with the Public Utility Regulatory Policies Act (PURPA) of 1978.
- Solar company FLS Energy petitioned federal regulators for help, arguing the state's Public Service Commission blindsided renewables developers by putting a hold on guaranteed payments of $66/MWh. The rates had not changed since 2012.
- While FERC said Montana's decision was inconsistent with PURPA, the agency declined to sue on behalf of FLS. The energy developer can move forward in court, or Montana could take action to reverse course.
Dive Insight:
It's not clear what will happen next with Montana's PURPA decision, because FERC declined to take the case to court on behalf of FLS.
"Our decision not to initiate an enforcement action means that FLS may itself bring an enforcement action against the Montana Commission and NorthWestern in the appropriate court," FERC said in its Dec. 15 decision. According to the commission, the issue was the Montana Public Service Commission requiring a signed interconnection agreement before requiring PURPA payments.
According to the Billings Gazette, the PSC is still reviewing the measure and declined to comment. Next month the commission will begin taking formal steps to lower the PURPA rate.
Utilities say they are being flooded with PURPA applications that are raising costs for consumers. PSC Commissioner Roger Koopman voted in favor of the suspension and said developers "look at Montana and they kind of flood in here thinking we can cut a really fat hog with this $66 rate, which is totally unfair to the rate payer and totally unfair to Montana businesses."
FLS Energy had asked the PSC to rehear the issue. According to some estimates, there are more than 100 solar projects of 3 MW or less been proposed in Montana, spurred by the high PURPA rates that were available before the suspension.
