On July 16, 2020, the Federal Energy Regulatory Commission (FERC) issued a final order in a 3-1 vote to finalize its updates to the Public Utility Regulatory Policies Act (PURPA), a 1978 law to reduce demand and promote greater use of domestic energy and renewable energy.[1] FERC stated that the updates are an effort to preserve competition and give states more flexibility in executing PURPA. One of the biggest changes allows states to set the rates paid to qualifying facilities at a variable wholesale rate rather than a fixed cost, meaning that the price will vary with the markets. Utilities and state regulators have expressed frustrations in the past with paying fixed rates to qualifying facilities, arguing that it prevents more efficient and cost-effective renewable facilities from competing.

FERC also changed how proposed projects qualify for PURPA financing rules, reducing the upper limit for facilities from 20 MW to 5 MW. This essentially means that utilities are no longer obligated to purchase from qualifying renewable facilities above that threshold. Another modification FERC made was to change the one-mile rule to prevent facilities 10 or more miles apart from aggregating as a single project. Facilities under 10 miles apart can still choose whether to aggregate. The change to the one-mile rule is one that Commissioner Richard Glick, who dissented to the other changes, sees as reasonable.

[1] https://www.ferc.gov/news-events/news/ferc-modernizes-purpa-rules-ensure-compliance-reflect-todays-markets