## Facts

- Several project companies planned battery-storage facilities that would store energy from renewable sources (primarily solar) and discharge stored energy to the electric grid for sale to an electric utility.
- The project companies self-certified their facilities with the Federal Energy Regulatory Commission (FERC) as “energy storage” qualifying facilities (QFs) under the Public Utility Regulatory Policies Act of 1978 (PURPA).
- Under Idaho’s PURPA implementation framework, “wind and solar” QFs were eligible for short-term (two-year) “as-available” contracts, while “other QFs” could obtain longer-term (20-year) published-rate contracts.
- The Idaho Public Utilities Commission (IPUC) initially treated the projects as “other QFs.”
- The utility petitioned the IPUC to treat the projects as “solar QFs” because the batteries would be charged primarily by solar energy; the IPUC granted the petition and reclassified the projects, limiting them to the short-term contract regime.
- The project companies sued the IPUC commissioners in federal court seeking declaratory and injunctive relief, alleging the reclassification exceeded the commission’s PURPA authority and conflicted with FERC’s jurisdiction and regulations.

## Issues

1. Whether a federal district court has jurisdiction under PURPA’s enforcement provisions to review and remedy a state commission order alleged to conflict with PURPA and FERC regulations.
2. Whether a state commission exceeds its PURPA implementation authority by reclassifying FERC-certified energy-storage QFs as “solar QFs” for contract eligibility purposes.
3. Whether the challenged reclassification and associated contract-term limitations were inconsistent with PURPA’s requirements and FERC’s regulatory scheme.

## Decision

- The court denied the utility’s motion to dismiss for lack of jurisdiction and denied defendants’ dismissal/summary-judgment requests.
- The court granted the project companies’ summary-judgment motion in part.
- The court held it had jurisdiction to enforce PURPA compliance where plaintiffs alleged the state commission’s orders conflicted with PURPA and FERC rules.
- The court concluded the IPUC’s reclassification of the energy-storage QFs as “solar QFs,” and the resulting limitation of contract rights, could not stand under PURPA and FERC’s framework.
- The court directed the commissioners to take necessary and appropriate action to give effect to the court’s rulings and entered judgment resolving the case.

## Legal Principles

- PURPA permits federal-court enforcement when a state commission’s implementation or application of PURPA is alleged to be inconsistent with PURPA and FERC regulations, not merely erroneous under state law.
- FERC has exclusive authority over QF status and the governing federal rules; state commissions implement PURPA primarily through avoided-cost rates and contract terms consistent with FERC’s regulations.
- A state commission may differentiate among QF types for implementation purposes only to the extent the differentiation is consistent with PURPA and FERC’s regulatory scheme and does not undermine federally recognized QF classifications.
- State implementation measures that effectively diminish federally conferred QF rights through conflicting reclassification exceed permissible PURPA implementation authority.

## Conclusion

The court exercised PURPA enforcement jurisdiction and required state corrective action after concluding that reclassifying FERC-certified energy-storage qualifying facilities as solar qualifying facilities to restrict contract eligibility conflicted with PURPA and FERC’s regulatory scheme.


Franklin Energy Storage One, LLC v. Kjellander, 2020 WL 265278 (D. Idaho Jan. 17, 2020)