On November 19, 2009, the Federal Energy Regulatory Commission (“FERC” or the “Commission”) issued a declaratory order confirming that sales by a developer of on-site solar generating projects (“PPA Provider”) to end-use customers do not constitute the sale or transmission of electric energy under FERC’s control. Therefore, FERC does not have jurisdiction over those sales and solar energy providers are not subject to associated FERC rules regarding jurisdictional rates.

 SunEdison, which finances, installs, owns, and operates photovoltaic facilities at customer locations, filed the original petition.  Through subsidiaries, SunEdison finances, installs, owns or controls, operates and maintains these facilities.  SunEdison then sells the electric energy output to the on-site end-use customer. 

 The Commission has previously stated that it does not assert jurisdiction in a net-metering situation in which an end-use customer is also the owner of the generator and receives a credit against its retail power purchases from the selling utility. Only if the end-use customer participating in the net metering program produces more energy than it needs over the applicable billing period, and thus is considered to have made a net sale of energy to a utility over the applicable billing period, has the Commission asserted jurisdiction.

 In this case, the entities that own the generating facilities will not be the participants in the net metering program, but will sell their output to the net metering program participants.  SunEdison argued that there is no sale of electric energy at wholesale in interstate commerce for the purposes of section 201 of the Federal Power Act (“FPA”) because its power sales agreements require that each of SunEdison’s on-site end-use customers purchase one hundred percent of the electrical output of a SunEdison Retail Operations facility.  The Commission agreed, stating that where the net-metering participant (i.e., the end-use customer that is the purchaser of the solar-generated electric energy from SunEdison) does not, in turn, make a net sale to a utility, the sale of electric energy by SunEdison to the end-use customer is not a sale for resale, and FERC’s jurisdiction under the FPA is not implicated. 

 Sun Edison also sought certain waivers from the Commission’s regulations implementing PUHCA 2005. Because qualifying facility (“QF”) status is easy to establish, and because QFs are already exempt from the PUHCA 2005 regulations from which Sun Edison seeks waiver, the Commission denied the request for waiver.

 The Commission’s Order is available at: http://www.ferc.gov/whats-new/comm-meet/2009/111909/E-29.pdf.