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Bench Report: Top 10 Groundbreaking Legal Decisions in 2009

Fortnightly Magazine - November 2009

utilities to a legally enforceable purchased-power obligation, as would ordinarily occur 90 days after the QF tenders a sales offer to the utility.

Involving Southwestern Public Service (SPS) and wind farms owned by John Deere Renewables, the ruling means that wind-driven QFs in Texas cannot secure in advance a sales rate based on avoided costs calculated as of the day the obligation matures—a step that Deere argues is needed to gain project financing—but instead must settle only for a sales rate calculated on delivery of energy. PURPA’s purchase-and-sale obligation still applies in SPS territory, per a 2008 FERC ruling that QFs there lack non-discriminatory access to transmission.

Calling the PUC order “potentially devastating” for other wind- and solar-powered QFs, Deere filed a complaint at FERC on September 24, seeking to enjoin the Texas rule.  Complaint of JD Wind v. SW Pub. Serv. Co., Tex., PUC Docket No. 34442, May 1, 2009.


10. Connecticut DPUC v. FERC: Resource Adequacy

In June, a federal appeals court in Washington, D.C., denied claims by Connecticut state utility regulators that FERC action approving the installed capacity requirement under ISO New England’s Forward Capacity Market was an illegal federal intrusion on state regulation of generation and resource adequacy.

The court likened FERC’s order as more a rate-setting action, in the nature of a peak-demand forecast, since the ICAP target affects the market-clearing capacity price, as set via the FCM’s bidding auction.

It also cited 30-year-old legal precedent from the 1970s that FERC had jurisdiction over deficiency charges imposed by NEPOOL on member utilities that fell short of required capacity. As the court put it, “this particular camel has long since entered—indeed, ransacked—the tent.”  Conn. DPUC v. FERC, June 23, 2009, 569 F.3d 477 (D.C.Cir.).