Broadview Appellate Victory Offers Strong Support for Renewables Projects

American Lawyer recognized the win in its Litigators of the Week column →

• In a case of importance to the renewable energy sector, Broadview secured an appellate win this week that increases flexibility for financing and building hybrid renewable-plus-storage projects capable of delivering clean, reliable power.
• The case raised a key question under the Public Utility Regulatory Policies Act (PURPA): whether a solar facility enhanced with battery storage could still qualify as a "small power production facility" subject to the statute's 80 MW cap if the nameplate capacity size of the facility is larger than the 80 MW cap but the actual amount of energy capable of being delivered is below the cap. Initially, FERC said no, but later reversed course, persuaded by Orrick's argument that the cap applies to total output to the grid, not component capacity.
• Utilities sought review in the D.C. Circuit first, and then the Supreme Court following Loper Bright and the end of Chevron deference. On remand, the court adopted again Orrick's argument that the statutory cap must be measured by the facility's maximum power that can be transmitted to the grid.
• The opinion affirms FERC's approval of Broadview's innovative solar facility - which combines 160 MW of direct current (DC) solar panels with batteries that can discharge 50 MW of DC for up to an additional four hours a day - as compliant with PURPA, since it never injects more than 80 MW to the grid.

What does this mean for the renewable energy sector? It unlocks a series of advantages for developers, investors and renewable power product facilities, including:

• It enables project sponsors to increase the nameplate capacity of renewable projects and co-locate substantial battery capacity without necessarily forfeiting PURPA qualifying status. For solar developers, this structural flexibility allows project owners the potential to generate far more solar energy during peak irradiance hours, store it on-site, and dispatch and sell power into the grid over an extended portion of the day while maintaining Qualifying Facility status.
• Second, because the project still qualifies as a Qualifying Facility under PURPA, utilities remain obligated to purchase its output at the utility's avoided-cost rate or under an existing applicable tariff.
• Third, the court's reasoning, rooted in FERC's long-standing "send-out" test (i.e., measuring the maximum power production capacity of a Qualifying Facility by the amount of MW it can inject into the transmission grid), provides a clear and durable standard that developers can rely on when designing future projects.

Orrick Supreme Court and Appellate lawyers Bob Loeb, Robert Manhas, and Jeremy Peterman led the appeal for Broadview, with critical support from Energy and Infrastructure attorneys Cory Lankford and Paul Zarnowiecki.