OPUC Declines Jurisdiction over QF PPAs

On June 25, 2021, the Oregon Public Utility Commission (the Oregon Commission) dismissed the case brought against NewSun Energy (NewSun) by Portland General Electric (PGE) that sought to terminate the power purchase agreements (PPAs) of select qualified facilities (QFs). The primary dispute was over the timeline of the QFs to come online and be commercially viable. NewSun argued there was force majeure, or, unforeseeable and unpreventable circumstances which prevented the facilities from achieving their commercial operation dates. The Commission agreed concluded that case should be adjudicated in court and dismissed the case, without prejudice. 

In 2016, PGE entered into a standard renewable PPA with several QFs operated by NewSun. The PPAs included a scheduled commercial operation within 36 months of the effective date of its PPA. During the first half of 2019, the projects were not constructed, and failed to achieve commercial operation. The QFs identified events that included late interconnection agreements, lengthy litigation on a relevant case, as well as COVID-19 pandemic-related work stoppages.

On January 8, 2021, PGE filed a complaint against the NewSun QFs asking the Commission, under ORS 756.500, to review and interpret certain terms in the PPAs, and to issue an order declaring the ineffectiveness of each notice of force majeure, and the effectiveness of each notice of termination. In February 2021, the defendants filed a motion to dismiss asserting that the Commission lacked subject matter jurisdiction, as well as primary jurisdiction, to decide PGE’s complaint. Community Renewable Energy Association (CREA), Northwest & Intermountain Power Producers Coalition (NIPPC), and the Renewable Energy Coalition (REC) supported NewSun asked the Commission to dismiss the case on the grounds of lack of jurisdiction.

The Commission agreed, stating that they “deem[ed] the interpretation of the disputed standard PPA terms, in context of application of the facts in this dispute, to not require our specialized expertise and to not pose significant effects on other QFs, or to regulatory policy.” Because the matter at hand was not specific to QF PPAs, but rather a more typical contractual dispute, it did not require the expertise of the Commission.

NewSun was represented by Stoll Berne and Richardson Adams.

Sanger Law commented on behalf of CREA, NIPPC, and REC supporting NewSun’s Motion to Dismiss.

CREA supports business and economic opportunities through renewable energy development in a competitive environment. CREA supports use of free enterprise principles to create economically and environmentally responsible electric generation within the State of Oregon.

NIPPC represents electricity market participants in the Pacific Northwest, including independent power producers, electricity service suppliers, and transmission companies. NIPPC is committed to facilitating cost-effective electricity sales, offering consumers choices in their energy supply, and advancing fair, competitive power markets.

REC advocates for reasonable PURPA and interconnection policies on behalf of renewable QFs located in in Oregon, Idaho, Montana, Utah, Washington, and Wyoming.

These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.