On April 18, 2019, FERC granted Sunrun, Inc.’s petition for declaratory order and request for waiver of the Public Utility Regulatory Policies Act (“PURPA”) Qualified Facility (“QF”) certification requirements for certain of its residential solar photovoltaic (“PV”) systems.  Specifically, FERC granted Sunrun limited waivers of: (1) the QF certification requirement for Sunrun-financed residential rooftop solar PV systems under 20 kW where such systems, though separately interconnected, may aggregate to over 1 MW within a one-mile radius; and (2) the requirement in Item 8a of the QF self-certification Form No. 556 to identify related PV systems of 20 kW or less located within a one mile radius.  FERC’s order noted its intention to ease administrative burdens on both Sunrun and itself, and affirmed that certain certification filing exemptions available to QFs under 1 MW can persist as Sunrun expands and its financed PV systems aggregate to over 1 MW within a one-mile radius.

Sunrun’s petition for declaratory order addressed the interplay between its business model and two FERC regulations related to QF certification.  Sunrun installs residential PV systems for homeowners, and through its financing model, often retains ownership of such systems. Sunrun claims that it has so far installed over 200,000 systems in 22 states and the District of Columbia, totaling 1,360 MW of capacity.  While FERC regulations generally require facilities seeking QF status to file a Form No. 556 self-certification or apply for Commission certification, the regulations exempt from this requirement facilities with a net power production capability of 1 MW or less.  As FERC noted in the April 18 order, this exemption is intended to encourage small power production by eliminating administrative burdens.  Similarly, under what is commonly referred to as FERC’s “one mile” rule, a small power production QF located within one mile of another small power production QF that has the same owner and uses the same energy resource is considered to be the same facility.  FERC has in the past applied this “one mile” rule to determine whether a QF that is 1 MW or less should be exempt from the QF certification requirement.

In its petition for declaratory order, Sunrun stated that 99.5% of its PV systems have a nameplate capacity below 20 kW, which has allowed the company to thus far utilize the “under 1 MW” exemption to FERC’s QF certification requirement.  However, Sunrun argued that without waiver, the PV systems that it owns as a cluster would be deemed to be owned by the same person for purposes of the one-mile rule, thereby triggering the QF certification requirement.  Sunrun also noted its intent to pursue emerging wholesale market opportunities for distributed energy resources.  Accordingly, Sunrun requested waivers of the QF certification filing requirement generally and of a separate requirement in Item 8a of the QF self-certification Form No. 556 to identify all of facilities with similarly-owned generating equipment located within one mile of a particular QF.

In granting Sunrun’s petition and waiver requests, FERC noted that such waivers were consistent with similar waivers and with the purpose of the 1 MW filing exemption.  FERC agreed that given the growing number of PV systems of 20 kW or less in Sunrun’s portfolio, requiring Sunrun to file a new Form No. 556 every time a client elected Sunrun financing or exercised its option to purchase the PV system would result in significant administrative burdens without obvious benefit, as would requiring Sunrun to continuously update the Form No. 556 with this information for systems over 20 kW.

FERC also rejected calls from Edison Electric Institute (“EEI”) and the National Rural Electric Cooperative Association (“NRECA”) to dismiss or postpone Sunrun’s waiver requests.  EEI and NRECA protested Sunrun’s petition on procedural grounds, and argued that the petition improperly implicated broad policy issues relating to PURPA implementation and distributed energy resource aggregation.  FERC concluded that the petition presented limited, fact-specific issues that did not implicate broader PURPA reform or distributed energy resource proceedings currently underway.  FERC also noted that any eventual requirements governing wholesale distributed energy resource aggregation would apply to any future Sunrun aggregation efforts, regardless of this narrow petition order.

FERC’s April 18 order is available here.