On January 21, 2016, FERC issued two separate orders largely approving the termination of the Public Utilities Regulatory Policies Act (“PURPA”) mandatory purchase obligation for the Entergy Operating Companies (“Entergy”) and Arkansas Electric Cooperative Corporation (“Arkansas Coop.”). Both orders were issued in response to applications submitted under Section 210(m) of PURPA, which provides utilities with a method for petitioning FERC to terminate the obligation of a utility to purchase a qualifying facility’s (“QF”) power under PURPA.
In the Entergy proceeding, Entergy requested termination of the mandatory purchase obligation on a service territory-wide basis for all QFs with a net capacity in excess of 20 MW. Entergy noted that its operating companies are transmission-owning members of the Midcontinent Independent System Operator, Inc. (“MISO”) and, because FERC’s PURPA regulations establish a rebuttable presumption that QFs over 20 MW have nondiscriminatory access to the MISO markets, Entergy argued that its companies satisfied the requisite criteria in FERC’s PURPA regulations for terminating the mandatory purchase obligation. FERC generally agreed and terminated the purchase obligation from all QFs over 20 MW, effective October 23, 2015. The lone exception to FERC’s termination decision was for the output from a QF jointly owned by Dow Chemical Company and Union Carbide Corporation, which FERC determined had presented sufficient evidence regarding persistent transmission constraints that prohibited the QF from accessing markets outside of the congested area, and therefore rebutted the presumption that it had access to the MISO markets.
In the Arkansas Coop. proceeding, Arkansas Coop. sought termination of the mandatory purchase obligation on behalf of itself and its seventeen electric-distribution cooperative members on grounds identical to those in the Entergy proceeding—namely, that QFs over 20 MW have nondiscriminatory access to the MISO markets. FERC agreed and granted Arkansas Coop.’s application, effective November 12, 2015.