By Wayne Barber

The D.C. Circuit Court of Appeals on Tuesday declined to overturn a FERC decision requiring Portland General Electric to purchase the full output of an Oregon wind power project under the Public Utilities Regulatory Policies Act.

The three-judge panel also rejected a claim by PáTu Wind Farm that PGE was required to accept the wind producer’s power through dynamic scheduling.

The court dismissed the utility’s petition for lack of jurisdiction and denied PáTu’s argument on its merits.

The case centered on a 2015 FERC ruling in which the commission determined that PGE must purchase all of the six-turbine, 9-MW wind farm’s power under a power purchase agreement between the two parties set out under PURPA.

Because PáTu, located in rural Oregon, is not directly linked to PGE’s grid, it sells power to the utility under the state Public Utility Commission’s approved PPA for “off-system” generators.

In order to transmit power to PGE’s grid, PáTu obtains transmission services from the Wasco Electric Cooperative and the Bonneville Power Administration. Wasco wheels PáTu’s power to BPA, which in turn transmits the energy to PGE’s Troutdale substation, the PPA’s designated point of delivery.

“Before the ink had dried on the power purchase agreement, the parties locked in a dispute over the nature of Portland’s purchase obligation,” the court said.

Believing it had purchased a firm product, PGE required PáTu to set day-ahead schedules under which the wind farm committed to delivering whole blocks of energy for each hour of the day. If PáTu overscheduled its deliveries, PGE paid the favorable avoided cost rates for the power delivered and required the wind farm to make up the difference by buying firm power from BPA, which was compensated at the lower market rate because it was not generated by PáTu.

On the other hand, if PáTu underscheduled, PGE only accepted and paid for only scheduled deliveries, forcing the wind farm to dispose of the excess at less-favorable rates, the D.C. Circuit noted.

PáTu contended that PGE could only buy all of its variable output through “dynamic transfer” — or scheduling in real time. PGE countered that, under its PURPA agreement, the wind farm was a customer of the utility’s merchant arm, not a transmission customer, and was therefore ineligible for dynamic scheduling.

In December 2011, PáTu filed a complaint with the PUC. The regulator saw nothing in the PPA requiring PGE to utilize dynamic scheduling, concluding that the utility must purchase all power PáTu generates and delivers.

But drawing a distinction between power “produced” and power “delivered,” the PUC appeared to leave PGE free to refuse to purchase any power produced in excess of what PáTu scheduled.

PáTu appealed to the Oregon Court of Appeals, which affirmed the PUC’s decision without opinion. The wind farm owner then filed a complaint with FERC, arguing that PGE must buy all of its output, scheduled or not, and that dynamic scheduling was the only way to accomplish that result.

FERC concluded that the PPA and PURPA regulations required PGE “to accept PáTu’s entire net output … delivered to Portland,” the D.C. Circuit noted.

FERC rejected PáTu’s specific request for dynamic scheduling, explaining that it has never required a utility to use any particular method to carry out its purchase obligation. It nonetheless clarified that, contrary to what the PUC had suggested, PGE could not escape its PURPA obligation by imposing overly rigid scheduling requirements or by refusing to purchase all power that PáTu produces.