Citing a growing trend toward competition in the electric and gas industries, the Massachusetts Department of Public Utilities (DPU) has issued guidelines for the development of incentive...
Power Purchase Agreement Inadequate to Justify QF
The Massachusetts Supreme Court has ruled that the state's Energy Facilities Siting Board could not rely on a ruling by the Massachusetts Department of Public Utilities (DPU) to determine project need as part of the construction approval process for a qualifying facility (QF). The Siting Board had found itself unable to determine the need for a 170-megawatt gas-fired cogeneration project proposed by Altresco Lynn, Inc. because it was unclear whether Massachusetts utilities would require surplus power from out-of-state suppliers before 2000. Nevertheless, the Siting Board claimed that approved power-purchase agreements constituted prima facie evidence that the energy was needed, and that relying on the DPU approval process ensured a "harmonious and consistent energy policy" in the state.
The court disagreed, finding that state law requires the Siting Board to make an independent finding of need before approving electric construction proposals. It said that DPU approval of the power contract did not necessarily support an inference of customer demand, because the Public Utility Regulatory Policies Act requires utilities to buy power from QFs without reference to market forces. Point of Pines Beach Association, Inc. v. Energy Facilities Siting Board, (em N.E. 2d (em , Jan. 11, 1995 (Mass.D.P.U.).
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