Winding Creek Solar, LLC v. Peterman, No. 17-17531 (9th Cir. 2019)
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The Ninth Circuit affirmed the district court's judgment for plaintiffs in an action brought under the Public Utility Regulatory Policies Act (PURPA) against Commissioners of the California Public Utilities Commission. In order to regulate terms under which electric utilities purchase power from Qualifying Cogeneration Facilities (QFs), the Commission established the Renewable Market Adjusting Tariff (Re-MAT) program.
The panel held that Re-Mat violates PURPA's requirements, because it caps the amount of energy utilities are required to purchase from QFs and because it sets a market-based rate, rather than one based on the utilities' avoided cost. Because California did not offer a PURPA-complaint alternative, the panel held that PURPA preempts Re-Mat. Finally, the district court did not abuse its discretion by fashioning equitable relief when it declined to award plaintiffs preferred remedy of a particular contract.
Court Description: Public Utilities. The panel affirmed the district court’s judgment after a bench trial and summary judgment in favor of the plaintiff in an action brought under the Public Utility Regulatory Policies Act against Commissioners of the California Public Utilities Commission. PURPA requires electric utilities to buy all the power produced by alternative energy generators known as Qualifying Cogeneration Facilities (“QFs”) and to pay the same rate they would have if they had obtained that energy from a source other than the QFs. QFs are guaranteed their choice of this “avoided cost” rate as calculated either at the time of contracting or the time of delivery. Plaintiff was a QF that wanted to develop a solar generating facility in California. To regulate the terms under which electric utilities purchase power from QFs, the CPUC established the Renewable Market Adjusting Tariff (“Re-MAT”) program. The panel held that Re-MAT violated PURPA’s requirements because it capped the amount of energy utilities were required to purchase from QFs and because it set a market-based rate, rather than one based on the utilities’ avoided cost. California did not offer a PURPA-compliant alternative. The panel held that, with no PURPA-compliant program available, PURPA preempted Re-MAT.
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