Sending shock waves through the wind industry, the Federal Energy Regulatory Commission (FERC) ruled on February 22 that California's $15 billion auction of renewable energy contracts breaks federal law and should be tossed out. The draft order could mean that several hundred megawatts of proposed wind development in California is not only halted (or at least delayed), but that a precedent has also been set nationally. Within hours, the American Wind Energy Association (AWEA) vowed to appeal. In a draft ruling, FERC says the Biennial Resource Plan Update (BRPU) violates the Public Utility Regulatory Policies Act (PUPA). FERC also questions whether California ratepayers need additional capacity and said the California Public Utilities Commission (CPUC) had relied upon data several years old. Once FERC actually issues an order, expected within days of the draft, appeals must be filed within 30 days. The CPUC denied the BRPU is illegal, saying that FERC's draft may have "seriously disrupted" the carefully crafted BRPU and that FERC may have established a new federal standard "impossible to reconcile with state energy policy." The CPUC said it would decide whether to appeal. AWEA's Mike Marvin says, "This is a major power grab." Randy Swisher of AWEA also blasts the order: "Despite FERC's rhetoric about support for renewables and [integrated resource plans], this decision effectively closes the door to domestic markets for renewable energy." Hap Boyd of wind company Zond adds, "This is a blow to a balanced energy portfolio." But Southern California Edison -- which along with San Diego Gas & Electric had challenged the auction for illegally forcing it to buy power at rates higher than avoided cost -- welcoms the decision, adding that it will continue with its high environmental standards while bringing down the cost of electricity.
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Senior Renewable Energy Analyst (WindGEMINI Product Lead) DNV GL Bristol (City Centre), City of Bristol