Opinion ID: 185132
Heading Depth: 2
Heading Rank: 2

Heading: Procedural Background: Petition to Revoke Claremont's QF Status

Text: 13 Wheelabrator Claremont Company (hereinafter Claremont) operates an SPP facility in Claremont, NH. In 1983 the New Hampshire Public Utilities Commission approved a settlement agreement among Connecticut Valley, Claremont (through its predecessor in interest), and the NHPUC's own staff. See In re New Hampshire/Vermont Solid Waste Project, DR 82-343, Order No. 16,232, 68 NHPUC 96. The settlement, as embodied in a contract executed between Connecticut Valley and Claremont and approved by the NHPUC in 1984, provided that Connecticut Valley would purchase the entire electrical output of Claremont's proposed SPP facility for 20 years at Connecticut Valley's full avoided cost (of nine cents per kWh, adjusted for inflation) while simultaneously providing Claremont with its needs for electricity in its operations, at Connecticut Valley's consolidated tariff rate, which has proven to be less than the adjusted contract rate. Claremont applied to the Commission for QF certification, representing that its output would be 4.5 MW but it did not specify whether that was its gross or net output. The Commission certified the Claremont facility as a QF in 1986, and in 1987 Claremont began selling to Connecticut Valley its gross electrical output of 4.5 MW. 14 In 1993 Claremont, in response to an inquiry from the NHPUC, reported that its gross output was 4.5 and its net output 3.9 MW. Connecticut Valley then asked the NHPUC to investigate whether Claremont qualified as a QF in view of its having sold its gross output. Instead, the NHPUC, noting that the FERC has exclusive jurisdiction over the decertification of a QF, ordered Connecticut Valley to petition the Commission for revocation of Claremont's QF status. See In re Connecticut Valley, DR 93-196, Order No. 21,000 (NHPUC Oct. 18, 1993). 15 Connecticut Valley duly filed a complaint with the Commission seeking revocation of Claremont's QF status based upon Claremont's sales of gross output and its alleged misrepresentations to the Commission in applying for QF status. Connecticut Valley further requested that, once Claremont's QF status was revoked, the Commission take jurisdiction over Connecticut Valley's contract with Claremont pursuant to SS 205-206 of the FPA and either rescind the contract and retroactively determine just and reasonable rates for past sales, or at least prospectivelyreform the contract so that Connecticut Valley need purchase only Claremont's net output. 16 Although the Commission agreed with Connecticut Valley that Claremont could not be a QF because its gross sales took it outside the rule of S 3(17)(C)(ii), the Commission denied Connecticut Valley any relief. See Connecticut Valley Elec. Co. v. Wheelabrator Claremont Co., 82 FERC p 61,116, at 61,422 (1998). The Commission explained that the statute is ambiguous and could be read to allow gross sales by a QF.Not until Turners Falls, the Commission concluded, had it made clear that gross sales would violate S 3(17)(C)(ii) and thus preclude QF status. See id. at 61,418. Noting, however, that many QFs had in good faith entered into long-term contracts for the sale of their gross output, and not wanting to upset their settled expectations, the Commission adopted a remedial policy that was only partially retroactive: We will ... revoke the QF status of any facility which sells in excess of its net output pursuant to a contract entered into after the date of issuance of Turners Falls. Id. at 61,420. Because the Claremont contract predated Turners Falls, the Commission declined to revoke Claremont's QF status or to take any other remedial action. See id. at 61,422. 17 Connecticut Valley petitioned for rehearing, arguing that S 3(17)(C)(ii) is not ambiguous and therefore the Commission should have decertified Claremont or provided Connecticut Valley some alternative relief for Claremont's acknowledged violation of the statute. The Commission denied rehearing, 83 FERC p 61,136 (1998), and Connecticut Valley petitioned this court for review of both Commission orders.