[co-author: Steven Boughton]
On March 24, 2022, FERC denied a petition filed by Irradiant Partners, LP (“Irradiant” or “Petitioner”) seeking waiver of the Commission’s Qualifying Facility (“QF”) filing requirement for its acquisition and recertification of 185 QFs. The Commission held that the recertification requirement—even at this scale—was not unduly burdensome, citing mitigating factors and emphasizing the particular importance of having up-to-date ownership information to assist FERC in monitoring for discrimination.
Petitioner Irradiant provided that in October 2021, it acquired a controlling ownership interest in approximately 185 small power production QFs, for which the prior owners submitted self-certification Form No. 556s, despite the fact that the facilities are not yet operational and do not yet have a rate schedule on file with the Commission. Irradiant also acknowledged that its recent acquisition caused its equity ownership position in the facilities to exceed 10%, thus triggering a material change requiring filing for recertification for each of the 185 QFs. However, Petitioner sought a waiver of the filing requirement because it would be unduly burdensome and consume between 350-500 hours to complete the filing for each QF. Furthermore, Irradiant stated that the facilities are not yet operational, obviating the need for QF status, and most will be 20MW or less when operational, making them exempt from section 205 of the Federal Power Act.
In denying Irradiant’s petition, FERC stated that it evaluates waiver from the filing requirement on a case-by-case basis where good cause is shown. FERC declined to waive the recertification requirement under the specific circumstances of this case and emphasized the particular importance of up-to-date ownership information, which allows FERC to effectively monitor for potential discrimination and determine whether the QFs should continue to qualify for exemptions from parts of the Federal Power Act.
FERC also found several specific factors relevant to its determination. First, the Commission underscored that a small power production facility is not required to certify QF status until it makes a jurisdictional sale. As such, Petitioner could allow the QF status of its facilities to lapse and then “re-obtain” QF status by filing each certification by the time each makes its first jurisdictional sale. Second, FERC found the filing burden to be overstated given that small power production facilities submit less information than cogeneration facilities, most of which can be copied from prior forms. Further, the Commission held in Order No. 872-A that 90-120 hours would not be an unreasonable burden. Finally, FERC reminded Petitioner that although most of its facilities (i.e. those 20MW or less) would be exempt, such exemption is only available to facilities certified as QFs. Maintaining this certification requires a filing upon a material change to prior certification.
Of note to QFs seeking recertification, FERC acknowledged that its regulations “do not explicitly state when a QF must file for recertification to reflect a material change.” However, it stated that a recertification is required “when a material change is made” and that the Commission will evaluate the timeliness of recertification filing on a case-by-case basis. Should filers doubt when to timely file for recertification, FERC suggested they could file before a material change is made, to the extent the change is foreseeable. Though the Commission made clear that it was not requiring such advanced filings.
FERC’s order is available here.
