D.C. Circuit Court Affirms FERC Order in Wind Farm Complaint Against PGE

On April 25, 2017, the U.S. Court of Appeals for the D.C. Circuit (Circuit Court) dismissed petitions for review by PáTu Wind Farm (PáTu) and Portland General Electric Company (PGE) appealing Federal Energy Regulatory Commission (FERC) orders requiring PGE to purchase the full net output delivered by PáTu and rejecting PáTu’s request that PGE accept the power through specific transmission arrangements called dynamic transfer.  

PáTu entered into a power purchase agreement with PGE to sell the output of its 9 megawatt (MW) wind project in April 2010 as a mandatory purchase under the Public Utility Regulatory Policies Act (PURPA). PáTu’s wind plant is considered “off system” generation that needed to wheel its power across Northern Wasco Public Utility District’s and Bonneville Power Administration’s transmission system to reach PGE. PGE required PáTu to schedule its power in whole MW blocks of power, which is impossible for a variable wind generation. Given PáTu’s inability to match output to scheduled power, PGE paid higher contract prices for all power delivered that was less than scheduled, but when PáTu delivered more power than it scheduled, then PGE required PáTu to buy power from BPA and was paid a lower market rate. PáTu requested that PGE purchase its variable output through a form of real time scheduling called “dynamic transfer” instead, but PGE refused.

The case has a long and contentious history that was formally initiated with a complaint filed by PáTu against PGE in December 2011 before the Oregon Public Utility Commission (Oregon Commission). The Circuit Court explained that “[b]efore the ink had dried on the power purchase agreement, the parties locked in a dispute over the nature of Portland’s purchase obligation.” The dispute was first litigated before the Oregon Commission and the Oregon Court of Appeals. The Oregon Commission determined that the contract did not specify the form of delivery and concluded that it did not have the jurisdiction to address the issue of the appropriate transmission arrangements that PáTu needed to wheel its power to PGE. The Oregon Court of Appeals affirmed the Oregon Commission’s decision without issuing an opinion.

PáTu sought relief from FERC, which concluded over multiple orders that PGE was required to accept all of PáTu’s net output. FERC decided that PURPA requires PGE to purchase PáTu’s entire net output and that PGE cannot impose overly rigid scheduling requirements or otherwise refuse to purchase a project’s entire net output. FERC, however, rejected PáTu’s request for dynamic transfer scheduling and allowed PGE to use a different method to pay for PáTu’s energy.

The Circuit Court approved FERC’s decision, concluding that: 1) it did not have jurisdiction to review the PURPA claims because FERC’s order was only declaratory; 2) it would only have jurisdiction to review the case if it was first brought before a lower court; and 3) PáTu had failed to support its claim that FERC should require PGE to use dynamic transfer because this type of claim, under the Federal Power Act, only applies to the relation between a transmission customer and transmission provider relationship, which was different than the relationship between PáTu and PGE because PáTu was not PGE’s transmission customer.



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