Opinion ID: 2176100
Heading Depth: 1
Heading Rank: 1

Heading: purpa rights

Text: The parties appear to agree that the relevant law in determining whether Ryegate has a right to Docket No. 4933 rates is contained in regulations issued by the Federal Energy Regulatory Commission with respect to Small Power Production and Cogeneration. See 18 C.F.R. §§ 292.101-292.602 (1990). The operative section of these regulations is § 292.304(d), which provides: Purchases as available or pursuant to a legally enforceable obligation. Each qualifying facility shall have the option either: (1) To provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility's avoided costs calculated at the time of delivery; or (2) To provide energy or capacity pursuant to a legally enforceable obligation for the delivery of energy or capacity over a specified term, in which case the rates for such purchases shall, at the option of the qualifying facility exercised prior to the beginning of the specified term, be based on either: (i) The avoided costs calculated at the time of delivery; or (ii) The avoided costs calculated at the time the obligation is incurred. The two rate options contained in § 292.304(d)(2) correspond to the rate options available under the VPX letter of intent. The second option is for the rates specified in Docket No. 4933. These rates are available as a matter of federal law, however, only as of the date Ryegate incurs a legally enforceable obligation for the delivery of energy or capacity over a specified term. § 292.304(d)(2). The question under federal law reduces to whether Ryegate incurred such an obligation when it signed the VPX letter of intent. The obligation specified in the federal regulation is Ryegate's obligation to deliver energy over a specified term. See Snow Mountain Pine Co. v. Maudlin, 84 Or. App. 590, 599, 734 P.2d 1366, 1370-71 (1987). We have examined carefully the letter of intent in the context of the entire Vermont scheme to implement PURPA and the VPX producer's guide. The letter clearly binds VPX as a matter of allocation of the power purchase obligations and rates available to it. Nowhere, however, has Ryegate assumed a legally enforceable obligation to deliver any energy to VPX and through it to the utilities and consumers in the state. At best, Ryegate has obligated itself to go through a number of development and regulatory steps that may lead to an obligation to deliver energy, if all goes well. Ryegate appears to make three arguments to respond to the wording of the regulation. First it notes that the failure to find it is entitled to Docket No. 4933 rates undermines the intent of FERC to ensure that a qualifying facility which has obtained the certainty of an arrangement is not deprived of the benefits of its commitment as a result of changed circumstances. 45 Fed.Reg. 12224 (1980). The FERC intent is applicable, however, only when there is the certainty of an arrangement as defined in the regulation. Having never provided that certainty, Ryegate has no entitlement to be immune from changed circumstances. The second argument is that the PSB violated PURPA by not providing Ryegate a legally binding obligation to sign. We find nothing in the federal law that imposes that obligation on the PSB. Nor has Ryegate made any showing that it was prepared to sign such an agreement. Ryegate can obtain the benefit of federal law only by tendering an agreement that obligates it to provide power. Snow Mountain Pine Co., 84 Or.App. at 600, 734 P.2d at 1371. Third, Ryegate argues that the PSB violated PURPA by terminating the availability of Docket No. 4933 rates without creating an alternative, thus taking away its rights to rates calculated on avoided costs on the date it incurs its obligation to provide power. Apparently there was a gap between April 30, 1988the date by which a project had to be in operation to qualify for Docket No. 4933 ratesand the date on which the PSB issued a new rate order. Nothing in the record indicates that Ryegate tendered a legally binding obligation to deliver power during that gap. Further, there is no indication that the PSB was unwilling to calculate rates on a case-by-case basis during the gap period. We see no violation of Ryegate's rights under PURPA.