FERC Administrative Law Judge (ALJ) H. Peter Young has ordered several Enron-affiliated wind farm projects and Southern California Edison Co. to file a status report by the end of next week on their efforts to complete a settlement that would resolve assertions made by Edison that the projects failed to comply with the Commission’s regulations for qualifying facility (QF) status.

The wind farm projects and Edison earlier this month reported to Young that they were closing in on such a settlement and have entered into a memorandum of understanding (MOU) to settle their disputes involving QF compliance and other matters.

FERC in late December set an ALJ hearing to unravel the tangled ownership and status of five wind power companies with QF status that were owned and then spun off into special purpose entities by Enron Corp. in order to retain QF status for the wind farms after Enron acquired Portland General Electric.

The order for a hearing issued last month by the Federal Energy Regulatory Commission followed up on a complaint by Edison that the wind power projects should not have continued their QF status as favored power suppliers at higher rates because they were, in fact, still controlled by Enron.

Rules set by FERC under the Public Utility Regulatory Policies Act (PURPA) prohibit affiliates of electric utilities or electric utility holding companies from having more than a 50% ownership stake in a QF.

The Commission already had set for hearing in October the questionable status of three of the systems, Zond Windsystems, Victory Garden and Sky River, whose ownership had been transferred in 1997 to Enron’s now infamous “RADR” partnerships (see NGI, Oct. 28, 2002).

FERC in December agreed to consolidate the earlier case with Edison’s petition for a declaratory order on Cabazon Power Partners and a second unit of Zond Windsystems.

The MOU required Edison and the Enron affiliates to seek a short stay of the proceedings before Young to allow sufficient time for the finalization of definitive settlement agreements.

The parties, therefore, asked Young to suspend the proceedings until Jan. 15. Edison and the Enron affiliates said that taking this action would extend the deadlines for any outstanding discovery while further talks are held between Edison and the Enron affiliates and definitive agreements are drafted.

The ALJ responded to the Jan. 2 pleading in an order issued on Tuesday. “Consistent with their request, the parties are directed to provide a settlement status report to the presiding judge via conference call on or before Jan. 16, 2003,” Young wrote.

At the same time, the ALJ pointed out that he already suspended the procedural schedule in the proceedings through a decision issued on Jan. 3, making the Edison and Enron plea for a suspension of that schedule moot. Among other reasons, Young suspended the schedule in order to ensure that “all consolidated participants were afforded an opportunity to address a vigorously contested issue with respect to whether the QFs bear the burden of proof in these proceedings.”

It now appears possible “that an order determining the burden of proof in these proceedings may be unnecessary and would, if issued, constitute an advisory opinion,” wrote Young. “This possibility notwithstanding, memoranda of law addressing this issue may be filed in accordance with my Jan. 3, 2003 order.”

If needed, a modified procedural schedule will be established in a subsequent order following a prehearing conference, though not necessarily in an order determining the burden of proof, the ALJ said.

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