Generating Debate: D.C. Circuit Affirms that AC Output Determines FURPA Eligibility, While Dissent Decries Chevron Maximalism

Summary

On February 14, 2023, a divided D.C. Circuit panel affirmed FERC's March 2021 ruling that the power output capacity of a generating facility – not the nameplate capacity of its component parts – determines its eligibility as a Qualifying Facility ("QF") under the Public Utilities Regulatory Policy Act of 1978 ("PURPA"). Although the opinion enhances opportunities for clean energy generation and storage, developers should remain cautious as the D.C. Circuit's decision may not be the last word on the issue. A lengthy dissenting opinion from a former clerk of Justice Kavanaugh decries the Chevron doctrine on which the majority opinion relies, raising the distinct possibility of rehearing en banc or Supreme Court review.