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Former FERC Chair slams Proposed Decision on California community solar in national trade group’s opening comments

Comments shut down assertion that community solar conflicts with federal law

Sacramento, Calif. — On Monday, the Coalition for Community Solar Access (CCSA) directly addressed the California Public Utilities Commission’s (CPUC) proposed decision (PD) weighing the future of the state’s community solar program. In comments filed with the CPUC, the organization characterized the PD as misguided and misinformed, and dismantled the false assertion that community solar conflicts with federal law. 

Led by Attorney Norman Bay, former Chair of the Federal Energy Regulatory Commission (FERC) and Co-Chair of the Energy and Commodities Practice Group at Willkie Farr & Gallagher LLP, the group’s comments demonstrate that CCSA’s Net Value Billing Tariff (NVBT), and community solar more generally, do not violate Federal law.

“One thing is clear: FERC has never invalidated a state community solar program,” said Bay. “As a legal and policy matter, FERC has refrained from asserting jurisdiction over community solar. States have exclusive jurisdiction over retail rates, and community solar quintessentially involves state retail rate design and state energy policy. Further, the Inflation Reduction Act shows that Congress intended to promote community solar, not to pre-empt it.”

In CCSA’s comments to the PD, Bay further explains why community solar does not violate federal law, “For FERC to assert jurisdiction, three requirements must be met. There must be (1) a sale, (2) at wholesale, (3) in interstate commerce. If any one of those three requirements is not met, FERC does not have jurisdiction. Here, none of those requirements is met. First, the power flow from the community solar facility to the IOU is not a sale. Second, the IOU engages in a retail sale with the subscriber. Third, the subscriber’s credit is netted against the bill, so there is no sale, let alone a wholesale sale in interstate commerce.”

Bay goes on to cite various cases where FERC has refrained from asserting jurisdiction over state virtual net metering programs and community solar including EnergyMark, where FERC declined to assert jurisdiction over community solar projects in New York Independent System Operator (NYISO) territory and in Southern Maryland Electric Cooperative, where they denied a petition for declaratory order that asked FERC to preempt a Maryland community solar program. 

“The PD fundamentally misinterprets federal law and ignores FERC’s long-standing and deliberate precedent of deferring to more than 20 states deploying community solar operating under similar models to the NVBT for over a decade,” said Jeff Cramer, CEO of CCSA. “For everyone scratching their heads over this PD, this is not a statement of fact or legally binding precedent and it has no impact on community solar programs operating in other states.” 

Meanwhile, Congress and the federal government continue to reiterate its support for community solar.  In February, the Department of Energy (DOE) reaffirmed the federal government’s commitment to community solar by challenging the community solar industry to meet a target of 20 gigawatts (GW) of community solar by 2025. Additionally, Congress passed the Inflation Reduction Act which creates multiple programs to spur the growth of community solar including the Low-Income Communities Bonus Credit Program (“LICBC”) and the Solar for All Program, a $7 billion grant competition to create new or to expand existing state community solar programs.

Over the past decade, the number of states that have enacted policies to support third-party shared or community solar has expanded from just a few to 22 states, including Washington, D.C. A collective 6.6 gigawatts (GW) of generation capacity has been installed to date, and Wood Mackenzie’s most recent US community solar market outlook predicts that there will be 14 GWdc power installed across the country by the end of 2028. However, that projection would be under serious threat should the CPUC adopt the flawed PD. 

Opening comments by all interested parties were due March 25, with reply comments due April 1. The CPUC Commissioners may vote on a final decision as early as April 18, but the Commission does not have to hold a vote on that date. 

“We urge the Commission to reject the PD in its entirety or to modify it significantly,” said Cramer.  “We still have time to get this right and create a program that spurs development of local, clean energy projects that foster a more equitable energy future.”