Declaratory Order That Power Purchase Agreements Do Not Convey Renewable Energy Credits

In American Ref-Fuel Company, 105 FERC P 61,004 (2003), owners of waste-to-energy power plants sought a declaratory order that power purchase agreements entered into pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA) do not convey renewable energy credits (similar to alternative energy credits) to utility companies absent an express contractual provision to that effect. In concluding that the contracts did not convey the credits absent an express contractual provision, the Federal Energy Regulatory Commission (FERC)opined that renewable energy credits are created by the states; they "exist outside the confines of PURPA," and, therefore, PURPA does not address ownership of the credits. Id. at 61,007. According to FERC, states have the authority to determine who owns the renewable energy credits. Id. Further, it concluded that, "while a state may decide that a sale of power at wholesale automatically transfers ownership of the state-created renewable energy credits, that requirement must find its authority in state law, not PURPA." Id. at 61,007. Even the dissenting Commissioner in American Ref-Fuel opined that states created renewable energy credits and PURPA does not address who owns such credits. American Ref-Fuel, 105 FERC at 61,008 (Brownell, Commissioner dissenting). Commissioner Brownell would have dismissed the petition and left the appropriate state to determine who owned the renewable energy credits at issue. Id.