Qualifying

Several alternative energy companies, qualifying cogeneration facilities (QFs) and electric power groups have asked FERC to reject a request by utilities located in the Southwest Power Pool (SPP) to be relieved of their obligation to enter into new contracts to purchase electricity from QFs or small power producers under the Public Utilities Regulatory Policies Act of 1978 (PURPA).

FERC Tuesday granted Tennessee Gas Pipeline a waiver of its prior-notice cost limits for an offshore Louisiana lateral project, qualifying it for the higher cost ceiling under the agency’s blanket certificate regulations that went into effect after the project was authorized. The El Paso pipeline sought the waiver as the cost of the project jumped to $35.8 million (and is expected to climb further) from the original cost estimate of $10.6 million.

The power industry appears to be responding “with greater vigilance” to ensure compliance with FERC’s qualifying facility (QF) ownership requirements under the Public Utility Regulatory Policies Act (PURPA) of 1978, a FERC staff member told commissioners last Tuesday.

Pacific Gas & Electric Co. signed five-year agreements with 131 of its qualifying facilities (QFs) last week, ensuring the utility and its customers will receive a reliable supply of electricity at an average energy price of 5.37 cents/kWh. The contracts represent nameplate capacity of 2,950 MW compared to PG&E’s total QF contract nameplate capacity of 4,400 MW. On an average annual basis, the company receives 2,400 MW from all of its QFs, and the 131 QFs represent 1,600 MW of the total amount.

California officials last week announced a deal with its small qualifying facility (QF) generators and progress in creating what its governor is calling a “pincer movement” between Sacramento and Washington, D.C., to force lower wholesale prices. Gray Davis was ebullient in claiming a “day of accounting” is coming for merchant generators in which they either take heavy discounts on monies owed them, or substantial decreases (federal price caps) in power prices going forward.

California officials Wednesday announced a deal with its small qualifying facility (QF) generators and progress in creating what its governor is calling a “pincer movement” between Sacramento and Washington, D.C., to force lower wholesale prices. Gray Davis was ebullient in claiming a “day of accounting” is coming for merchant generators in which they either take heavy discounts on monies owed them, or substantial decreases (federal price caps) in power prices going forward.

Despite a negative ruling earlier in the month, small energy generators, so-called qualifying facilities (QFs), continue to pursue relief from regulated rates of Pacific Gas and Electric Co. through the federal bankruptcy court judge in San Francisco who is overseeing the utility’s Chapter 11 proceedings. Separately, the PG&E utility is meeting with individual QFs to try to negotiate deals that will allow them to cover their costs of generation at minimum.

Looking to ensure that the maximum amount of qualifying facility (QF) power is available to the California energy market this summer, FERC last week ruled that when QFs in the state sell excess power or make sales to third parties under court authorization, they should be allowed to request interconnection and transmission service from utilities in California. The Commission proposed ordering California utilities to provide interconnections to state QFs under a key section of the Federal Power Act.

Responding to concerns voiced by several Texas qualifying facilities (QFs), FERC last week affirmed that any company that meets the definition of electric utility under the Public Utility Regulatory Policies Act of 1978 (PURPA) following restructuring in the Lone Star state will continue to have an obligation to purchase power from QFs.