As we previously blogged, the cooperatives argued in their petition that any sales of excess generation purchased through the Pilot Program constitute wholesale sales of electricity under the exclusive jurisdiction of the Federal Power Act and PURPA, and thus must comply with the avoided cost standards set by PURPA. The cooperatives take issue with a provision in the Maryland Public Service Commission’s (MPSC) regulations instituting the Pilot Program governing the purchase of excess generation, claiming that it “sets payments potentially at a level other than the actual avoided costs at the time of delivery,” thus violating PURPA. The simple fix, they request, is for FERC to order a revision to the MPSC regulations to harmonize the state regulations with PURPA so that any purchases of excess generation made under the Pilot Program occur at a rate less than or equal to a utility’s avoided cost.
Without dissecting the merits of the cooperatives’ petition, FERC dismissed the petition as “premature” for several reasons: (1) Maryland’s Pilot Program provides for “voluntary” election to the program, and the two cooperatives have not indicated whether or not they are even participating – as other utilities have – thus rendering their concerns speculative; and (2) the Pilot Program requires the filing of a compliance tariff through an MPSC proceeding, which the cooperatives have yet to file. FERC concluded that “the Commission’s issuance now of an order on the merits of the Petition could, in this latter circumstance where there are available state fora, inappropriately interfere with the Maryland Commission’s and any state court’s efforts to address the Cooperatives’ concerns at the state level.”