California feed-in tariff not compliant with PURPA, federal court rules

Dive Brief:

A federal district court has concluded two aspects of California’s Renewable Market-Adjusting Tariff are in conflict with the Public Utility Regulatory Policies Act and federal regulation because it is not based on avoided cost and includes a statewide cap of 750 MW.
Winding Creek Solar sued the California Public Utilities Commission, arguing the renewable tariff program’s 750 MW cap was preempted by PURPA's purchase requirements and the pricing was not consistent with the Federal Energy Regulatory Commission's avoided cost structure requirements.
California may appeal the decision to the Ninth Circuit, according to the State Power Project's analysis of the case. A copy of the district court's decision is located here.

Dive Insight:

The U.S. District Court for Northern California sided with Winding Creek Solar, finding that California's Re-MAT program did not align with PURPA or federal regulations, but stopped short of offering the developer all it had asked for.

Winding Creek had asked the court to find that it is entitled to a contract with Pacific Gas and Electric under the Re-MAT program at the initial offering price of $89.23/MWh.

"That goes too far," Judge James Donato concluded in his order. "There is a difference between an implementation claim and an as-applied challenge."

But Donato did say the case was relatively straightforward. "It does not require significant legal analysis to conclude that CPUC’s imposition of caps in the Re-MAT program violates the must-take obligation," he wrote.

On the issue of price formation, Donato found the prices generated by the Re-MAT program's reverse auction "do not satisfy the definition of ‘avoided costs’ in FERC’s regulations.” Lawyers for the CPUC argued that the standard contract offer was available to the solar developer and satisfied the requirements of PURPA.

The case played out since 2006 and included three rounds of motions to dismiss, after which the parties filed cross-requests for summary judgment. Those cross-requests resulted in complex briefs that also included an amicus brief submitted by PG&E. Both sides presented witnesses, expert testimony and filed substantial post-trial briefs.