Overview
The Broadview qualifying facility (QF) status saga continues. The D.C. Circuit will be re-examining whether a solar-plus-battery project can qualify as a small power producer (SPP) under the Public Utility Regulatory Policies Act (PURPA) when it has a capacity exceeding the 80 MW statutory limit but only ever sends 80 MW to the grid at any given time.
The legal quagmire over Broadview and its QF status has been well documented on this blog, from FERC's Initial Order denying the facility SPP qualifying facility (QF) status; FERC's Order on Rehearing reversing course; FERC's Second Order on Rehearing reaffirming that Broadview is a SPP QF; to the D.C. Circuit’s 2023 decision in SEIA v. FERC, holding that PURPA was ambiguous and that FERC's reasonable interpretation was entitled to Chevron deference. On July 2, 2024, the Supreme Court remanded a series of cases with pending petitions for writs of certiorari that relied heavily on the Loper Bright-abolished Chevron doctrine, including EEI v. FERC, an appeal of the SEIA decision.
The case's controversy centered on Section 210 of PURPA and Section 3(17)(A)(ii) of the FPA, which defines a "small power production facility" to mean a facility that "has a power production capacity which, together with any other facilities located at the same site (as determined by the Commission), is not greater than 80 megawatts." In SEIA, the D.C. Circuit invoked Chevron to determine that PURPA is ambiguous as to which "capacity" is relevant, that of Broadview's facility or the maximum 80 MW of AC power that would be "sent out" at any given time. As to Chevron's second step, the majority found FERC’s interpretation reasonable and consistent with PURPA’s legislative history and purpose.
While Judge Walker of the D.C. Circuit concurred that PURPA does not expressly define the relevant terms, but his dissent cautioned that "[o]n the D.C. Circuit, Chevron maximalism is alive and well." The dissent argued that a court must use every tool of statutory interpretation before declaring a statute to be ambiguous and affording deference to an agency. Walker argued that Broadview should not have SPP QF status because it can produce more than 80 MW of power at a given time.
Presumably, the expectation from the Supreme Court is that FERC’s Initial Order should be reinstated. The appellate court's majority could still find that PURPA is ambiguous and attempt to rely on another variety of agency deference, such as Skidmore v. Swift & Co., 323 U.S. 134 (1944), but the definition small power production facility hardly seems ambiguous. The number in the statute is 80 MW and Broadview’s capacity is far greater.
Indeed, this PURPA case addresses one of the few portions of PURPA where Congress did not grant FERC a broad delegation of power. Many PURPA provisions give FERC substantial freedom, including the portion of the definition of small power production facility that indicates the "located at the same site" qualifier is to be "determined by the Commission." As the concurrence in the appellate decision on FERC's Order No. 872 explained: "Congress expressly granted FERC the authority to 'determine' what counts as the 'same site' for purposes of the 80-megawatt limit. [] Indeed, Congress didn't use 'same site' in the ordinary sense here; otherwise, it would not be necessary to specify that FERC got to choose what it means." In contrast, FERC was given no "choice" as to what 80 MW means. We expect
