FERC Clarifies Jurisdiction Over Interconnection Agreements Between a Qualifying Facility and a Public Utility
On November 3, 2010, the Federal Energy Regulatory Commission (FERC) denied the petition of a public utility seeking clarification that FERC has jurisdiction over interconnection agreements between a Qualifying Facility (QF) and a public utility only if the QF actually sells its output to a third party. In the same matter, an intervener sought clarification that interconnection agreements with QFs do not have to be filed with FERC as long as the host public utility purchases all of the QF?s power.
FERC acknowledged that where all output from the QF is sold to the public utility, the state regulatory body retains jurisdiction. In denying the petition, however, FERC concluded that under its Order No. 2003 and other precedent, FERC jurisdiction exists where a QF has the right to sell any of its output to a third party. In so holding, FERC stated that ?we will not limit our jurisdiction over QF interconnection agreements exclusively to instances where actual sales of output [to third parties] are occurring. . . .? Florida Power & Light Co., 133 FERC ?61,121, at P 23 (2010).
In light of this order, existing interconnection agreements between public utilities and QFs should be reviewed to determine whether the agreements need to be filed with FERC. To assist with that review, FERC addressed several scenarios to determine whether the scenarios trigger a requirement to file the interconnection agreement with FERC, including, but not limited to:
- QF sales of output to the utility on an ?as available? basis
- New or existing QFs that plan to sell output to third parties
- The expiration of a firm contract requiring the utility to purchase all of the QF's output
- Agreements releasing the utility from its obligation to purchase all of the QF's full output
- Explicit affirmations (or prohibitions) of the QF?s right to make sales to third parties
- Cases where the utility is not given notice that third-party sales of output are occurring or are planned