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The United States' Federal Energy Regulatory Commission (FERC) on May 31 refused to reconsider its ruling that over 1500 MW of wind capacity, authorised by the California Public Utilities Commission (CPUC) under its Biennial Resource Plan Update (BRPU), violated the Public Utility Regulatory Policy Act (PURPA) and must be thrown out.

Three weeks later, on June 21, the CPUC decided it would not challenge FERC on the BRPU, but instead instructed utilities to negotiate with bidders about reducing project size and costs. Though the CPUC indicated some renewables projects would go forward, yet to be determined is a decision on a petition by FloWind for a rehearing of the bids made under the controversial BRPU auction of renewables contracts (“uåX˜äŠÊ˜·³Ç, September 1994).

The FERC stated on May 31 that the BRPU "violated federal law when it failed to consider all sources of electric power generation in determining utilities' cost." FERC noted that the ruling did not limit the ability of individual states to earmark new capacity for wind or other renewable resources "as long as such actions do not result in rates above avoided costs."

"Not surprised," is the response by Jan Smutny-Jones, executive director of the Independent Energy Producers. The net effect of the ruling, he says, is that it will be more difficult to implement renewable energy policies. "PURPA was an important step in creating a competitive market. FERC is moving backwards in time," he comments. Smutny-Jones says the IEP is reviewing its options for challenges to this recent blow to independent power developers. "FERC decisions are not binding. They are not on solid legal ground," he points out.