On October 25, 2022, FERC declined to act on a petition for enforcement against California’s rules for solar installations implemented pursuant to the Public Utility Regulatory Policies Act (“PURPA”). As a result, ongoing federal litigation against the California rules will continue.
The litigation, dating back to 2011 in the U.S. District Court for the Central District of California, centers on the avoided-cost rates that small renewable power generators, including residential solar systems, can receive under PURPA. Under PURPA, incumbent electric utilities are required to purchase electricity from qualifying facilities with a capacity of 80 MW or less at rates that they would have charged for their own generation (so-called “avoided-cost” rates). Currently, the net metering rules of the California Public Utilities Commission (“CPUC”) allow for companies to use their own utility-supplied metering devices to net their retail usage against a solar facility’s wholesale production. A stakeholder group, CAlifornians for Renewable Energy (“CARE”), has maintained that, among other things, the CPUC’s net metering rules permit retail customers to use utility-provided meters to net their retail usage against a solar facility’s generation, thereby reducing compensation to rooftop solar generators by investor-owned utilities. The CARE litigants sought to amend their federal complaint but were required to first petition FERC for enforcement relief under PURPA. The CARE petitioners did so on August 26, 2022.
In their August petition, CARE argued that the CPUC and California investor-owned utilities violated the avoided-cost mandate under PURPA through the CPUC’s implementation of its net metering rules. In its Notice of Intent Not to Act, FERC explained that the “decision not to initiate an enforcement action means that petitioners may themselves bring an enforcement action against the California Commission in the appropriate court.” Accordingly, the Notice will enable CARE and the other members to further amend their complaint and continue with the ongoing federal litigation in California.
The CARE litigation is CARE et al. v. CPUC et al. (Case No. 2:11-cv-04975-JWH) before the U.S. District Court for the Central District of California.
A copy of FERC’s Notice can be found here.