Today was a big day for the solar power industry at the Federal Energy Regulatory Commission (FERC).
In its monthly open meeting, FERC announced two decisions that significantly impact the industry — one involving PURPA and the other related to PJM’s Minimum Offer Price Rule (MOPR).
First, FERC reversed its Broadview Solar decision issued in September 2020, which prior decision overturned decades of precedent related to the method for determining the net output of qualifying facilities under PURPA. That September decision provided that qualifying facilities could not take into account devices that can limit their output, such as inverters, in determining their net output. And that meant, in Broadview Solar’s case, that a solar power qualifying facility with greater than 80 MW of solar panel capacity, but only 80 MW of inverter capability, would not be eligible for qualifying facility status. But today FERC reversed that decision, finding that a qualifying facility’s net output should reflect the facility’s design and its actual capabilities (not theoretical ones).
Next, FERC responded to a petition for declaratory order in which an applicant sought confirmation that local property tax relief that is available to solar power facilities as Pollution Control Equipment (Va. Code Ann. Sec. 58.1-3660) is not a State Subsidy that would subject the applicant to the expanded MOPR in the forthcoming PJM Base Residual Auction. Just a few months ago, PJM had determined that the very same tax relief would cause recipients to be subject to the MOPR. But FERC disagreed and as a result solar power project owners may utilize this tax relief in Virginia without consequence in PJM’s capacity auctions.
The orders in these proceedings have not yet been released, and we will provide further updates as needed once they are available for review.