Federal District Court finds the CPUC’s Re-MAT procurement program is not PURPA-compliant

Update: on December 15, 2017, in response to the Federal District Court decision, the CPUC’s Executive Director issued an order, effective immediately, prohibiting PG&E, SCE and SDG&E from (1) signing any new Re-MAT contracts; (2) holding any new Re-MAT program periods; and (3) accepting any new Re-MAT applications. The order will remain in effect pending further Commission action or court order.

On December 6, 2017, the US District Court, Northern District of California, granted Winding Creek Solar’s motion for summary judgment, in its suit against the CPUC, finding that CPUC's Renewable Market-Adjusting Tariff ("Re-MAT") program violated PURPA in two ways: (1) the CPUC’s imposition of caps on Re-MAT program participation violated PURPA’s "must-take obligation"; and (2) the varying Re-MAT contract prices, and arbitrary adjustments to those prices, did not satisfy PURPA and FERC’s definition of "avoided costs".

In 2013, the CPUC approved the implementation of utility Re-MAT programs that provided a feed-in tariff option for renewable generators sized up to 3 MWs. Each IOU operated its own Re-MAT program, with differing tariff prices based on type of product (i.e., baseload, peaking, etc) and the utility purchasing the product. Tariff prices varied over time and could be adjusted up or down in response to generator interest and costs to construct and operate generation facilities. The CPUC capped statewide participation in the utility Re-MAT programs at 750 MWs, with each utility allocated a portion of that overall cap.

PG&E offered Re-MAT contracts based initially on a random selection of initial applicants and then on a first-come, first-served basis. During PG&E’s first Re-MAT program period, the offer price was $89.23/MWh. Winding Creek Solar could not participate in that first Re-MAT program period because it was not placed high enough in the initial queue. Although Winding Creek Solar subsequently was offered Re-MAT contracts at lower prices, it declined those offers and, instead, sued the CPUC arguing, among other issues, that the CPUC Re-MAT program, as designed, violated PURPA and FERC’s regulations implementing PURPA.

Although the Court found in Winding Creek Solar’s favor, the Court denied Winding Creek Solar's request for an order that the CPUC award Winding Creek Solar a contract for $89.23/MWh, finding that it did not have the jurisdiction to determine relief, which must be determined in state court.

Contact: Ron Liebert