In an October 30, 2017 letter to the then-Chairman of the Federal Energy Regulatory Commission (FERC), 17 members of the U.S. House of Representatives1 urged FERC to "update" its regulations implementing the Public Utility Regulatory Policies Act of 1978 (PURPA).2 Specifically, the House members "encourage[d] FERC to . . . undertake needed modernization to [FERC's] PURPA one-mile rule regulations," which apply to determine whether an electricity generating facility seeking status as a small power production qualifying facility (QF) satisfies the size criteria set out in PURPA and FERC's regulations. They further indicated that the House Energy and Commerce Committee is considering "additional reforms" to PURPA, arguing that over the past 40 years, "the development of competitive wholesale electricity markets, which enable [QFs] under PURPA to reach more willing buyers, and the declining costs for natural gas and renewable energy resources," among other changes in energy markets, have "changed both the economics of development, as well as the impact of an increasing amount of QF output being placed on the transmission grid."

Former FERC Chairman Neil Chatterjee responded to the House members' letter on November 29 that "[t]he energy landscape that existed when PURPA was conceived was fundamentally different than it is today; solar and wind power were fledgling technologies, there was no open access to wholesale electricity markets, and natural gas was in scare supply. None of those things are [sic] true today. In light of such changes, I believe that the Commission should consider whether changes in the existing regulations and policies could better align PURPA implementation with modern realities." Chatterjee reminded the House members that FERC held a technical conference in 2016 to examine issues related to PURPA and further observed that "[o]ne particular area where many parties have indicated a need for a different approach is the 'one-mile rule' for qualifying facilities." Chatterjee assured the members that he will keep their concerns in mind and indicated that the letter will be placed in the public record of the pending proceeding.

On the same day that Chatterjee sent his response, one of the signatories to the October 30 letter, Rep. Tim Walberg (R-MI), introduced a bill (H.R. 4476) into the House "to modernize [PURPA] and for other purposes." H.R. 4476 not only specifies revisions to FERC's "one-mile rule," it also proposes major revisions to PURPA itself that would further circumscribe the ability of small power production QFs to obtain the benefits granted by PURPA and FERC's regulations implementing PURPA; in particular, the requirement that electric utilities purchase the output of QFs at "avoided cost" rates.

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Footnotes

1 Tim Walberg (R-MI), Fred Upton (R-MI), Joe Barton (R-TX), Marsha Blackburn (R-TN), Robert E. Latta (R-OH), Gregg Harper (R-MO), David B. McKinley (R-WV), Morgan Griffith (R-VA), Bill Johnson (R-OH), David Loebsack (D-IA), Larry Bucshon (R-IN), Bill Flores (R-TX), Markwayne Mullin (R-OK), Kevin Cramer (R-ND), Kurt Schrader (D-OR), Billy Long (R-MO) and Richard Hudson (R-NC).

2 16 U.S.C. § 824a-3

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