On September 5, 2023, a decision by the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit) underscored the Public Utility Regulatory Policy Act’s (PURPA) empowering provisions for Federal Energy Regulatory Commission (FERC).
For legal context, the PURPA was established to encourage growth and involvement of small-scale renewable generating systems. The decision, released in Solar Energy Industries Association v. FERC, ruled that the PURPA provisions grant the FERC a substantial range of discretion evaluating the necessary implementation rules for continued development of these qualifying facilities.
This noteworthy decision bolsters the role of FERC in shaping the future of renewable energy systems. The Ninth Circuit, though proactively upholding the FERC’s discretion, did not vacate FERC’s decision. Importantly, it did however remand the decision back to FERC on the basis of an overlooked National Environmental Policy Act (NEPA) review.
The ruling emphasises the importance of proper NEPA review, not merely as a procedural requisite, but as a critical determiner in assessing the environmental implications of renewable energy projects. This serves to highlight that any expansion of small-scale renewable energy generation should not compromise an assessment of environmental impact.
As legal professionals, we are reminded of the importance of due diligence in environmental matters, even in cases that prima facie, support the broader goals of environmental sustainability. This decision is a reaffirmation of the complex legal landscape that governs energy generation, regulation, and environmental impact, and the intricate balance that needs to be maintained therein.