Locke Lord QuickStudy: FERC Clarifies That the 80 MW Threshold for a Small Power Production QF Is Measured ‎Based on the Maximum Output That Can Be Delivered, Creating Optionality for Hybrid ‎Solar and Storage Facilities That Have a Nameplate Capacity Greater Than 80 MW

Under Public Utility Regulatory Policies Act of 1978 (“PURPA”)‎¹‎ and section 292.207(b) of the ‎Commission’s regulations, a small power production Qualifying Facility (“QF”) cannot exceed ‎‎80 megawatts (“MW”) at a single site.‎²

Broadview Solar, LLC (“Broadview”) is developing a combined solar photovoltaic (“PV”) and ‎battery storage facility ‎in Yellowstone County, Montana‎. The facility includes a coupled array ‎of solar PV panels with a gross capacity of 160 ‎MW of direct current (“DC”) electricity and a ‎battery energy storage system with the ‎capacity to discharge 50 MW of DC electricity for up to ‎‎4 hours. The facility also includes 20 inverters with a maximum output of 82.548 MW of AC ‎electricity‎. After accounting for facility loads and losses totaling 2.548 MW, the maximum net ‎output of the facility is 80 MW of AC electricity. ‎

Broadview filed three notices of self-certification and one application to the Commission for ‎QF certification of the facility. In September 2020, the Commission denied Broadview’s QF ‎certification application. In reaching that decision, the Commission focused on the nameplate ‎capacity of the solar PV array rather than the combined maximum net output of the Facility that ‎can be provided to the point of interconnection. The maximum nameplate output of the solar ‎panels was 160 MW, far exceeding the 80 MW statutory limit for QFs, thus, the Commission ‎denied Broadview’s application. ‎

Last week, the Commission reversed this decision, in a 3-2 decision, finding that its analysis of ‎the term “power production capacity” as it relates to QF certification should be measured on ‎what the facility can actually produce for sale to the interconnected electric utility. The ‎Commission emphasized that PURPA requires the Commission to consider the output of the ‎facility as a whole, rather than simply focusing on the output of one of portion of the facility, ‎such as the solar PV panels.‎

Commissioner Danly dissented, reiterated his view that PURPA requires the Commission to ‎consider the power production capacity of a facility, not its delivery capacity to the grid. ‎Commissioner Danly criticized the Commission’s findings as introducing a new standard that ‎deviates from Commission precedent. A majority of Commissioners disagreed, finding that ‎four decades of longstanding precedent have consistently measured QF power production ‎capacity at the point of interconnection.‎

Moving forward, this decision signals that the Commission will take a holistic view of a ‎facility’s operations in determining its power production capacity for QF certification purposes. ‎This development creates optionality for hybrid facilities pairing solar PV panels with battery ‎energy storage systems, as long as the output of the facility at the point of interconnection is no ‎greater than 80 MW. It is also evidence of the Commission’s continued efforts to incorporate ‎hybrid and paired facilities into its existing regulatory framework.‎

A copy of the Commission’s order can be found here.

For more information on this development, please contact Bruce Grabow at ‎bgrabow@lockelord.com, 202-220-6991.

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^{1 16 U.S.C. §§ 796(17), 824i, 824a-3.‎
2 16 U.S.C. § 796(17)(A)(ii); 18 C.F.R. § 292.204(a)(1) (2020).‎}