FERC Affirms QF Self-Certification for a Hybrid Solar and Battery Project, Prompting Dissent from Commissioner Danly

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On December 17, 2021, FERC affirmed a Public Utility Regulatory Policies Act of 1978 (“PURPA”) qualifying facility (“QF”) self-certification for the Shields Valley Solar Facility (“Shields Valley”), a hybrid solar and battery project relying on inverters to limit its net power production capacity.  In doing so, FERC reiterated its finding in its Broadview Solar rehearing order that a QF owner can use MW net output at the point of interconnection, taking into account inverter losses and other components to produce electricity, in determining whether a facility meets the 80 MW statutory maximum for QF status.  Commissioner James Danly wrote separately in dissent explaining his view that Shields Valley plainly exceeds the statutory capacity limit for a QF.

The Shields Valley project will be comprised of 380,952 solar modules for a total DC nameplate capacity of 160 MW and a battery storage system with an expected capacity of 80 MW on the DC side of the solar array, along with 27 inverters that will result in a maximum net AC power production capacity to the point of interconnection of 80 MW—which is the upper limit for a facility to be considered a QF under PURPA.  The interconnecting utility, NorthWestern Corporation d/b/a NorthWestern Energy (“NorthWestern”) filed a protest arguing that Shields Valley does not qualify as a QF because the solar and battery facilities are separate power production facilities with capabilities that result in a power production capacity substantially larger than 80 MW QF size limit, even under the analysis FERC used in the Broadway Solar orders (see March 25, 2021 edition of the WER).

FERC rejected NorthWestern’s arguments as a collateral attack on Broadview Solar, confirming that facility configurations where the solar panels, battery storage system, and inverters together have a maximum net AC production capacity of 80 MW are eligible for QF certification as a small power production facility.  FERC found that Shields Valley can deliver a maximum of only 80 MW of AC electricity to NorthWestern’s system at any one point in time, and thus, consistent with Broadview Solar, the power production capacity of Shields Valley cannot and will not exceed 80 MW. Broadview Solar is on appeal at the United States Court of Appeals for the District of Columbia Circuit (see D.C. Circuit Nos. 21-1126, 21-1136, 21-1142, 21-1149, 21-1175).

Commissioner Danly wrote separately to reiterate his view that the actual power production capacity of the Shields Valley facility is not irrelevant merely because the facility is designed so as to be able to deliver no more than 80 MW to its interconnection at any given time.  Danly expressed the same position in his dissent in Broadview Solar, but also noted here that despite NorthWestern’s arguments to the contrary, he would find that batteries and other storage devices do not “produce” power and therefore should not be counted in the QF’s size limit.

A copy of the order is available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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