• FERC and Idaho PUC Sign Memorandum of Agreement to Resolve PURPA Litigation
  • January 10, 2014 | Authors: Peter S. Glaser; Kevin C. Greene; Daniel L. Larcamp; Clifford S. Sikora; Lara L. Skidmore
  • Law Firms: Troutman Sanders LLP - Washington Office ; Troutman Sanders LLP - Atlanta Office ; Troutman Sanders LLP - Washington Office ; Troutman Sanders LLP - Portland Office
  • On December 24, 2013, FERC and the Idaho Public Utilities Commission (“Idaho PUC”) entered into a Memorandum of Agreement (“MOA”) to resolve a complaint FERC filed against the Idaho PUC for alleged violations of the Public Utility Regulatory Policies Act of 1978 (“PURPA”). The MOA states that FERC will file a Joint Stipulation for Voluntary Dismissal (“Joint Stipulation”) with the United States District Court for the District of Idaho (“Court”), and withdraw the complaint it filed against the Idaho PUC.

    FERC originally filed the complaint with the Court after the Idaho PUC rejected power purchase agreements (“PPAs”) from Qualifying Facilities (“QFs”) on two separate occasions after determining that the PPAs exceeded the Idaho PUC’s published avoided cost rates for QFs. The Idaho PUC’s rejections were the result of a recent rule change that lowered the avoided cost rate eligibility cap for QFs. The Idaho PUC stated in both rejection orders that, to be eligible for the previous avoided cost rates, the PPAs had to be signed by all parties prior to the Idaho PUC’s rule change. None of the rejected PPAs were signed by all parties prior to the rule change. After their respective PPAs were rejected by the Idaho PUC, the affected QFs then filed two separate petitions for enforcement with FERC, alleging that the Idaho PUC’s actions violated PURPA.

    FERC granted the petitions, holding that the Idaho PUC’s orders rejecting the PPAs were inconsistent with PURPA and FERC regulations because the Idaho PUC “limit[ed] the circumstances under which a legally enforceable obligation arose, [and] made a fully-executed contract a condition precedent to a legally enforceable obligation.” FERC also gave notice that it intended to initiate an enforcement action against the Idaho PUC. On March 22, 2013, FERC filed its complaint against the Idaho PUC for failure to adhere to PURPA.

    On December 27, 2013, the Court approved the Joint Stipulation and dismissed the matter.