Of Counsel Eric Christensen (Seattle) was quoted in a July 30 article in Law360 titled "9th Circ. Finds Faults In Calif. Green Energy Payment Scheme." The article focuses on the U.S. Court of Appeals for the Ninth Circuit's July 29 decision in Winding Creek Solar LLC v. Peterman et al. regarding the California Public Utilities Commission (CPUC)'s Renewable Market Adjusting Tariff (Re-MAT) program, which provides a mechanism for utilities to purchase power from alternative generators like solar companies.

Winding Creek argued in a lawsuit that the Re-MAT program was too constrained, and the Ninth Circuit panel agreed. The unanimous panel held that the program's cap on the amount of energy that utilities must purchase from alternative generators violates the Public Utility Regulatory Policies Act of 1978 (PURPA), affirming a lower court decision. Since, according to the opinion, PURPA requires that all of an alternative generator's energy be purchased by utilities, the cap is not in compliance with federal law since a utility could purchase less energy than an alternative generator makes available. 

Further, PURPA requires that alternative generators be offered a price derived from the amount the utility would have paid for a different generator's electricity or the amount the utility would have had to expend by producing the power itself, calculated either at the time of delivery or time of contract by choice of the alternative generator. The Re-MAT program deprived alternative generators of this choice, determining the price instead via auctions. 

Eric, who represents Winding Creek, noted that the decision was a victory for renewable power producers. "It is really important that the court reaffirmed the primacy of PURPA," he said. "From a financing perspective for a project like this it is really important to have a fixed-price, long-term contract option. And the opinion is a really strong endorsement of our view of that."

The opinion strongly upholds the core principles of PURPA and makes clear that it will continue to play a major role in the expansion of renewable energy, especially for smaller projects that depend on PURPA to obtain access to electric power markets. This could have an impact throughout the circuit, including in states that don't offer as many renewable energy incentives as California. "Robust PURPA programs in these states will certainly offer an option for renewable developers to get projects in the ground that otherwise might not occur," Eric said.

Click here for B&D's complete discussion of this development.

Click here for the full Law360 article (subscription required).