be met through the utility's self-build or purchase options.\361\
---------------------------------------------------------------------------

    \361\ Id. P 423.
---------------------------------------------------------------------------

    196. The Commission affirmed that, when capacity is not needed, the
avoided capacity cost rate can be zero.\362\ The Commission described
how competitive solicitations conducted pursuant to the rules adopted
in the final rule that are held whenever capacity is needed provide QFs
a level playing field on which to compete to sell capacity. The
Commission explained that this approach further shields purchasing
electric utilities from situations like those explained by Xcel, where
QFs could simply sit out the competitive solicitation process (or
participate but not have their bids accepted), but then seek to sell
capacity

to the purchasing electric utility and to receive a separate higher
administratively-determined avoided cost rate including an avoided cost
capacity rate, and even potentially displace non-QF competitive
solicitation winners.\363\ The Commission found that this approach
benefits ratepayers because allowing QFs to compete in properly
conducted, competitive solicitations that are held whenever capacity is
needed allows the purchasing utility to obtain needed capacity
efficiently. The Commission clarified, however, that the competitive
solicitation is not to be a means to determine a QF's right to put as-
available energy to the utility. Rather, the competitive solicitation
can be the means to determine what, if any, rate the QF will be paid
for capacity.\364\
---------------------------------------------------------------------------

    \362\ City of Ketchikan, 94 FERC at 62,061 (``[A]voided cost
rates need not include the cost for capacity in the event that the
utility's demand (or need) for capacity is zero. That is, when the
demand for capacity is zero, the cost for capacity may also be
zero.'').
    \363\ See Xcel Comments, Docket No. RM19-15-000, at 2-3, 9-10
(Dec. 3, 2019).
    \364\ Order No. 872, 172 FERC ] 61,041 at P 424.
---------------------------------------------------------------------------

    197. The Commission clarified that competitive solicitations must
also be conducted in accordance with the Allegheny principles under
which the Commission evaluates a competitive solicitation: (1)
Transparency, a requirement that the solicitation process be open and
fair; (2) definition, a requirement that the product, or products,
sought through the competitive solicitation be precisely defined; (3)
evaluation, a requirement that the evaluation criteria be standardized
and applied equally to all bids and bidders; and (4) oversight, a
requirement that an independent third party design the solicitation,
administer bidding, and evaluate bids prior to selection.\365\
---------------------------------------------------------------------------

    \365\ Allegheny Energy, 108 FERC ] 61,082 at P 18.
---------------------------------------------------------------------------

    198. The Commission also revised the proposed language in 18 CFR
292.304(d)(8)(i) to clarify that participants must be provided with
substantial and meaningful information regarding transmission
constraints, levels of congestion, and interconnections, subject to
appropriate confidentiality safeguards. The Commission found that it is
important that all participants in the competitive solicitation have
access to these data as a necessary predicate for a nondiscriminatory
competitive solicitation process and that requiring that this
information be provided will help ensure that a competitive
solicitation is open and transparent.\366\
---------------------------------------------------------------------------

    \366\ Order No. 872, 172 FERC ] 61,041 at P 431.
---------------------------------------------------------------------------

    199. The Commission also clarified that the requirement that the
competitive solicitation process be open and transparent includes that
the electric utility provide the state commission, and make available
for public inspection, a post-solicitation report that: (1) Identifies
the winning bidders; (2) includes a copy of any reports issued by the
independent evaluator; and (3) demonstrates that the solicitation
program was implemented without undue preference for the interests of
the purchasing utility or its affiliates. The Commission found this
post-solicitation report requirement to be consistent with the
requirement that competitive solicitations be open and transparent, not
only to ensure that utilities are not discriminating against QFs, but
also to help all stakeholders and the public at large better understand
the utility's competitive solicitation processes and thus to be
confident in the fairness of the process and of the results.\367\
---------------------------------------------------------------------------

    \367\ Id. P 432.
---------------------------------------------------------------------------

    200. The Commission declined to be overly prescriptive as to what
constitutes an ``independent administrator,'' responsible for
administering the competitive solicitation. The Commission clarified
that the independent administrator must be an entity independent from
the purchasing electric utility in order to help ensure fairness.
Whether called an independent administrator or a third-party
consultant, the Commission stated that the substantive requirement is
that the competitive solicitation not be administered by the purchasing
electric utility itself or its affiliates, but by a separate, unbiased,
and unaffiliated entity not subject to being influenced by the
purchasing utility.\368\
---------------------------------------------------------------------------

    \368\ Id. P 435.
---------------------------------------------------------------------------

    201. The Commission declined to add any additional requirements for
competitive solicitations, given that states may be in the best
position to consider their particular local circumstances. The
Commission found that the guidelines adopted in the final rule, in
conjunction with the Allegheny principles and other clarifications,
provide an adequate framework for competitive solicitations to be
conducted efficiently, transparently and in a nondiscriminatory
manner.\369\
---------------------------------------------------------------------------

    \369\ Id. P 437.
---------------------------------------------------------------------------

    202. Regarding facilities not designed primarily to sell
electricity to the purchasing electric utility, such as waste-to-power
small power production facilities and cogeneration facilities, the
Commission found that an exemption from competitive solicitation
processes is unnecessary. The Commission did not exempt small power
production facilities from the competitive solicitation process and was
not persuaded that such an exemption is appropriate given that
exempting large classes of small power producers could frustrate the
price discovery function of the competitive solicitation. The
Commission clarified, however, that QFs with capacity of 100 kW or less
already are entitled to standard rates regardless of whether they
compete in a competitive solicitation, and the final rule did not
change that regulation.\370\
---------------------------------------------------------------------------

    \370\ See 18 CFR 292.304(c).
---------------------------------------------------------------------------

i. Requests for Rehearing
    203. Northwest Coalition argues that allowing states to use
competitive solicitations to be the exclusive means of securing a long-
term PPA to sell energy and/or capacity is arbitrary, capricious, and
not in accordance with law.\371\
---------------------------------------------------------------------------

    \371\ Northwest Coalition Request for Rehearing at 39.
---------------------------------------------------------------------------

    204. Northwest Coalition notes that PURPA section 210(a) requires
that the Commission's rules must ``encourage'' QFs and must ``require
electric utilities to offer to . . . purchase electric energy from such
facilities.'' \372\ Northwest Coalition argues that, while the term
``electric energy'' is not defined in the statute, the phrase's context
within the statutory scheme unambiguously confirms that electric energy
includes both energy and capacity, meaning that the Commission's rules
must require utilities to purchase energy and capacity made available
by QFs.\373\ Northwest Coalition asserts that, following the enactment
of PURPA, the Commission interpreted this language in Order No. 69 to
mean that the statutory phrase ``electric energy'' must include both
energy and capacity.\374\ Northwest Coalition contends that the final
rule does not provide any basis to change the Commission's longstanding
interpretation of PURPA section 210(a) that requires electric utilities
to purchase all energy and capacity made available by QFs.\375\
---------------------------------------------------------------------------

    \372\ Id. at 40 (citing 16 U.S.C. 824a-3(a)(2)).
    \373\ Id.
    \374\ Id. at 40-41.
    \375\ Id. at 41.
---------------------------------------------------------------------------

    205. Northwest Coalition relies on the U.S. Court of Appeals for
the Ninth Circuit's invalidation of the California Commission's Re-Mat
competitive solicitation program, which found that under the Re-Mat
program, ``a utility could purchase less energy than a QF makes
available, an outcome forbidden by PURPA.'' \376\ Northwest Coalition
argues that, because the same problem exists with the final rule's
exclusive use of competitive solicitations to offer to buy capacity
from QFs, allowing states

to refuse to require electric utilities to offer to purchase capacity
from QFs violates the statutory requirement that utilities offer to
purchase all capacity made available from QFs.\377\
---------------------------------------------------------------------------

    \376\ Id. at 41-42 (citing Winding Creek Solar LLC v. Peterman,
932 F.3d at 865).
    \377\ Id. at 42.
---------------------------------------------------------------------------

    206. Northwest Coalition asserts that PURPA section 210(a) requires
that the Commission design its rules implementing the statutory must-
purchase obligation in such a manner that those rules will encourage
the development of QFs, adding that allowing utilities to evade the
mandatory purchase obligation through the exclusive use of competitive
solicitations that utility-owned resources commonly win is inconsistent
with statutory requirements.\378\
---------------------------------------------------------------------------

    \378\ Id.
---------------------------------------------------------------------------

    207. Northwest Coalition contends that the final rule arbitrarily
fails to acknowledge the Commission's own precedent and therefore does
not constitute reasoned decision making.\379\ Northwest Coalition
points to Hydrodynamics, in which the Commission rejected the ``Montana
Rule,'' which imposed a ``competitive solicitation process as the only
means by which a QF greater than 10 MW can obtain long-term avoided
cost rates.'' \380\ Northwest Coalition also points to Windham Solar
LLC, in which the Commission confirmed that it has held ``a state
regulation to be inconsistent with PURPA and the PURPA regulations `to
the extent that it offers the competitive solicitation process as the
only means by which a QF . . . can obtain long term avoided cost
rates.' '' \381\ Northwest Coalition argues that, under Commission
precedent, ``regardless of whether a QF has participated in a request
for proposal, that QF has the right to obtain a legally enforceable
obligation.'' \382\ Northwest Coalition claims that the final rule's
reasoning for allowing states to use competitive solicitations as a
substitute for long-term PURPA contracts does not acknowledge these
precedents or explain how the use of competitive solicitations could
still comply with the statute.\383\ Northwest Coalition argues that,
aside from generally averring it expects competitive solicitations will
be fair with the newly adopted criteria, the final rule does not cite
evidence suggesting that competitive solicitations will provide an
adequate mechanism for QFs to sell energy and capacity or any other
basis to overrule Commission precedent and therefore is arbitrary and
capricious.\384\
---------------------------------------------------------------------------

    \379\ Id.
    \380\ Id. at 43 (citing Hydrodynamics, 146 FERC ] 61,193 at P
33).
    \381\ Id. (citing Windham Solar, 156 FERC ] 61,042, at P 5
(2016) (Windham Solar)).
    \382\ Id. (citing Windham Solar, 156 FERC ] 61,042 at P 5).
    \383\ Id. at 43-44.
    \384\ Id. at 44.
---------------------------------------------------------------------------

    208. Northwest Coalition asserts that the final rule relies on
insufficient evidence to conclude that exclusive use of competitive
solicitations will encourage QFs.\385\ First, Northwest Coalition
contends that the Commission's decision fails to address multiple
commenters' concerns with inherent bias in utility-run competitive
solicitations and the difficulty and complexity of designing
competitive solicitations that are fair to independent bidders,
especially in regions with vertically integrated utility structures
like the Pacific Northwest.\386\ Northwest Coalition argues that, given
the evidence submitted concerning competitive solicitations in the
Northwest, the Commission is required to conduct a more meaningful
investigation and inquiry into the subject before it could rationally
conclude that it has now developed bidding criteria that would suffice
to justify denial of an LEO to any QF.\387\
---------------------------------------------------------------------------

    \385\ Id.
    \386\ Id. (citing NIPPC, CREA, REC, and OSEIA Comments, Docket
No. RM19-15-000, at 13-25, 66-67 (Dec. 3, 2019)).
    \387\ Id. at 44-45.
---------------------------------------------------------------------------

    209. Northwest Coalition claims that the Commission fails to
explain why it rejected more restrictive criteria proposed by parties
but not included in the final rule. As an example, Northwest Coalition
points to the Commission's failure to discuss in the final rule its
additional proposed criteria for any RFP process to overcome inherent
utility-ownership bias: (1) Require that the RFP include no utility-
ownership options; or (2) if utility-owned generation may result, the
RFP must be (i) administered and scored (not just overseen by an
independent evaluator) by a qualified independent party, not the
utility, (ii) any utility or affiliate ownership bid must be capped at
its bid price and not allowed traditional cost plus ratemaking
treatment, and (iii) the product sought, minimum bidding criteria, and
detailed scoring criteria must be made known to all parties at the same
time, i.e., the utility or affiliate may not have an informational
advantage in the RFP. Northwest Coalition asserts that, while the final
rule adopted a requirement for independent third-party design and
administration of the RFP, it rejected the rest of its proposals
without discussion.\388\
---------------------------------------------------------------------------

    \388\ Id. at 45.
---------------------------------------------------------------------------

    210. Northwest Coalition contends that the final rule also ignores
the lack of reasonable enforcement for the proposed exclusive use of
competitive solicitations.\389\ Northwest Coalition argues that the
final rule established a process that only allows QF advocates to
challenge competitive solicitations after the fact, when it is too late
to correct the harm caused by the utility's reliance on the competitive
solicitation process as a basis to refuse to contract with QFs in the
interim.\390\
---------------------------------------------------------------------------

    \389\ Id. at 46.
    \390\ Id.
---------------------------------------------------------------------------

    211. Northwest Coalition asserts that the final rule relies on
insufficient evidence that small QFs and those primarily engaged in a
business other than power production (e.g., irrigation districts and
waste-to-power facilities) can succeed in the type of all-source
competitive solicitation identified in the final rule.\391\ Northwest
Coalition contends that the final rule summarily declines to adopt any
exceptions other than a statement that 100 kW and smaller QFs can still
obtain standard rates \392\ without a meaningful explanation, which
fails to encourage such QFs, in contravention of PURPA.\393\
---------------------------------------------------------------------------

    \391\ Id.
    \392\ Id. (citing Order No. 872, 172 FERC ] 61,041 at P 440).
    \393\ Id. at 46-47.
---------------------------------------------------------------------------

    212. Mr. Mattson asserts that a QF should not have to compete in a
competitive solicitation with coal and natural gas generators where the
utility is selling their excess energy.\394\ Mr. Mattson alleges that
requiring a QF to accept the competitive solicitation process to sell
its capacity is a violation of the ``constitutional law right to
contract.'' \395\ Mr. Mattson argues that QFs should have the right to
a capacity payment if a capacity reduction will occur and the right to
sell their capacity in the market.\396\
---------------------------------------------------------------------------

    \394\ Mr. Mattson Motion for Time, Reconsideration, and Request
Answers at 1.
    \395\ Id. at 1.
    \396\ Id. at 1.
---------------------------------------------------------------------------

    213. Public Interest Organizations contend that the competitive
solicitation provisions are arbitrary and capricious, unless the
Commission clarifies that the solicitation only sets the full avoided
energy costs for QFs when the utility procures all energy through
solicitation.\397\ Public Interest Organizations claim that the final
rule does not require a state or non-regulated utility which uses a
competitive solicitation process to determine the price for QF energy
and/or capacity rates to also determine that the price

reflects the utility's avoided cost.\398\ Public Interest Organizations
assert that 18 CFR 292.304(b)(8) not only requires that a utility
procure all capacity through competitive solicitations to satisfy its
capacity requirement but also assumes that such competitive
solicitation results reflect the full avoided energy cost without
similarly requiring the purchasing electric utility to acquire all
energy requirements through competitive solicitation.\399\ Public
Interest Organizations allege that QFs are discriminated against in
circumstances in which the competitive solicitation price is lower than
the cost of energy produced or acquired by the utility outside the
solicitation process.\400\ Public Interest Organizations argue that,
while the final rule appears to agree that out-of-market acquisitions
preclude competitive solicitation from setting the avoided cost price,
the regulation only imposes limitations on the use of competitive
solicitations in the capacity context.\401\
---------------------------------------------------------------------------

    \397\ Public Interest Organizations Rehearing Request at 10.
    \398\ Id. at 100.
    \399\ Id.
    \400\ Id.
    \401\ Id. at 101.
---------------------------------------------------------------------------

ii. Commission Determination
    214. We find no merit in the competitive solicitation arguments on
rehearing. As an initial matter, we emphasize that the competitive
solicitation framework adopted in the final rule: (1) Harmonizes the
Commission's precedent on competitive solicitations; (2) establishes
transparent and non-discriminatory procedural protections for and
encourages the development of QFs; and (3) provides price discovery
that may better determine a purchasing utility's avoided cost rates.
    215. We disagree with Northwest Coalition's arguments that the
final rule goes against Commission precedent in Hydrodynamics and
Windham Solar and essentially eliminates the mandatory purchase
obligation for QF capacity. In those cases, the Commission found the
states' decisions inconsistent with PURPA because the competitive
solicitations were not regularly held.\402\ In contrast, the Commission
in the final rule found that a properly run solicitation must be held
at regular intervals, in which a utility's capacity needs are open for
bidding to all capacity providers, including QF and non-QF resources,
which is a level playing field for QFs to provide capacity.
---------------------------------------------------------------------------

    \402\ In Hydrodynamics, which the Commission quoted in Windham
Solar, the Commission found relevant the fact that the Montana
Commission's competitive solicitation were not held at regular
intervals. See Hydrodynamics, 146 FERC ] 61,193 at P 32 (emphasis
added) (``[W]e find that requiring a QF to win a competitive
solicitation as a condition to obtaining a long-term contract
imposes an unreasonable obstacle to obtaining a legally enforceable
obligation particularly where, as here, such competitive
solicitations are not regularly held.''); id. P 33 (emphasis added)
(``The Montana Rule creates, as well, a practical disincentive to
amicable contract formation because a utility may refuse to
negotiate with a QF at all, and yet the Montana Rule precludes any
eventual contract formation where no competitive solicitation is
held.''); Windham Solar, 156 FERC ] 61,042 at P 5 (citing
Hydrodynamics, 146 FERC ] 61,193 at PP 32-33).
---------------------------------------------------------------------------

    216. If a state does not require utility self-build and purchase
options to participate in competitive solicitations, then QFs that lose
still may have the right to avoided cost capacity rates more than zero
if the state determines that the utility still has capacity needs.\403\
The Commission has already determined, and affirmed in the final rule,
that capacity rates can be zero.\404\ The possibility of a zero
capacity rate does not mean that the Commission has determined that
utilities have no obligation to purchase capacity from QFs. It just
means that, under our precedent, if a purchasing utility avoids no
capacity costs due to the QF purchase, then the avoided cost for
capacity will be zero. As we mentioned above, Northwest Coalition has
conflated avoided energy costs with long-term power purchase
agreements. Long-term avoided costs necessarily represent a utility's
avoided capacity costs, and the Commission described how competitive
solicitations could be ``exclusive'' means for obtaining a capacity
rate, not an energy rate.
---------------------------------------------------------------------------

    \403\ See Order No. 872, 172 FERC ] 61,041 at PP 421-23.
    \404\ See City of Ketchikan, 94 FERC at 62,061.
---------------------------------------------------------------------------

    217. Under the final rule, even if a QF loses a competitive
solicitation where the state requires utility self-build and purchase
options to participate, it is still entitled to an energy rate outside
of the competitive solicitation and would receive a capacity rate of
zero, which is already permitted under Commission precedent where the
purchasing utility's avoided cost capacity value is zero.\405\ The
final rule, which largely adopted the NOPR, also provides procedural
protections that the Commission has already indicated are prerequisites
to competitive solicitations while allowing for a competitive
solicitation, under certain conditions, to be a state's exclusive
vehicle for setting QF capacity rates.\406\ The final rule therefore
merely harmonizes, rather than overrules, that prior precedent.
---------------------------------------------------------------------------

    \405\ See supra PP 194-196; see also Order No. 872, 172 FERC ]
61,041 at P 421 (``The Commission clarifies that, if a utility
acquires all of its capacity through properly conducted competitive
solicitations (using the factors described above), and does not add
capacity through self-building and purchasing power from other
sources outside of such solicitations, the competitive solicitations
could be the exclusive vehicle for the purchasing electric utility
to pay avoided capacity costs from a QF. In this situation, using
properly conducted competitive solicitations as the exclusive
vehicle to determine the purchasing electric utility's avoided cost
capacity rates would allow QFs a chance to compete to provide the
utility's capacity needs on a level playing field with the
utility.'').
    \406\ See Order No. 872, 172 FERC ] 61,041 at P 363 (describing
NOPR as citing Hydrodynamics, 146 FERC ] 61,193 at PP 31-35).
---------------------------------------------------------------------------

    218. We also disagree with Northwest Coalition's argument that the
final rule does not encourage QFs. Using competitive solicitations
encourages the development of QFs by providing them a price both
consistent with a competitive market and more accurately reflecting a
purchasing utility's avoided costs of capacity. The procedural
protections the Commission has adopted for conducting competitive
solicitations protect QFs from auctions that only benefit the utility's
self-build because the QF is still entitled to a capacity rate that may
exceed zero if the utility's self-build is not included in the
competitive solicitation. Furthermore, the competitive solicitation
regulation helps ensure that states can set QF rates no higher than
avoided costs while guaranteeing QFs' rights to sell capacity and
energy.\407\ In addition, while a competitive solicitation may be the
exclusive forum for establishing avoided cost capacity rates, once a
state has determined that the competitive solicitation set avoided
capacity costs (even if they equal zero), there is no infringement on
QFs' rights, and the rule does not allow a utility to evade its
purchase obligation.
---------------------------------------------------------------------------

    \407\ See id. P 416.
---------------------------------------------------------------------------

    219. We also disagree with Northwest Coalition's argument that the
Commission fails to address multiple commenters' concerns about
inherent bias in utility-run competitive solicitations, especially in
regions with vertically integrated utility structures like the Pacific
Northwest. The final rule described practices that cannot be used and
incorporated into the Commission's regulations a requirement for
independent administration and review to prevent the exercise of any
utility bias. The Commission will not assume that failure to hold an
acceptable competitive solicitation in the past will prevent the
establishment of an acceptable solicitation in the future given the
guard rails for independent administration and review the Commission
has now required through the final rule. Indeed, the new rules are
designed to ensure that future

competitive solicitations are not biased in favor of the purchasing
utility. Northwest Coalition's concerns that this new competitive
solicitation framework will leave QFs without a contract while they
challenge the process or results of a competitive solicitation is
misplaced. This framework is not meaningfully different from
administrative determinations of avoided costs, wherein a QF might not
receive a contract until it has exhausted administrative or judicial
processes.
    220. Northwest Coalition argues that the Commission failed to
explain why it rejected more restrictive criteria proposed by parties,
including some of Northwest Coalition's own suggestions. The Commission
weighed and considered all proposed criteria in determining which
criteria to adopt. We explain below why the Commission did not adopt
Northwest Coalition's proposed criteria.
    221. First, Northwest Coalition proposed that the Commission
require that the competitive solicitation include no utility-ownership
options. The Commission did not adopt this criterion because precluding
utility ownership from competitive solicitations or limiting how a
utility could bid does not provide the price discovery benefit of
competitive solicitations.
    222. Second, Northwest Coalition proposed that, if utility-owned
generation may result from the competitive solicitation, the
competitive solicitation must be (1) administered and scored (not just
overseen by an independent evaluator) by a qualified independent party,
not the utility, (2) any utility or affiliate ownership bid must be
capped at its bid price and not allowed traditional cost plus
ratemaking treatment, and (3) the product sought, minimum bidding
criteria, and detailed scoring criteria must be made known to all
parties at the same time (i.e., the utility or affiliate may not have
an informational advantage in the RFP).\408\
---------------------------------------------------------------------------

    \408\ Northwest Coalition Request for Rehearing at 45 (citing
NIPPC, CREA, REC, OSEIA Comments, Docket No. RM19-15-000 at 67 (Dec.
3, 2019)).
---------------------------------------------------------------------------

    223. With regard to Northwest Coalition's proposed criterion for an
independent administrator, as noted above, the Commission ``decline[d]
to be overly prescriptive as to what constitutes an `independent
administrator.' '' \409\ Although this finding in the final rule had to
do with whether the Commission required an ``independent
administrator'' or a ``third party consultant,'' the Commission stated
that the ``substantive requirement of this factor is that the
competitive solicitation not be administered by the purchasing electric
utility itself or its affiliates, but rather by a separate, unbiased,
and unaffiliated entity not subject to being influenced by the
purchasing utility.'' \410\ We continue to believe that we should not
be overly prescriptive, but expect states to design competitive
solicitations that meet these criteria in a transparent and non-
discriminatory manner. To that end, we grant Northwest Coalition's
request that a competitive solicitation should be administered and
scored by an independent entity. We conclude that this requirement is
consistent with our efforts to ensure a fair competitive solicitation
and the criteria we established in the final rule pursuant to the
Allegheny factors.\411\
---------------------------------------------------------------------------

    \409\ Order No. 872, 172 FERC ] 61,041 at P 435.
    \410\ Id.
    \411\ See Allegheny Energy, 108 FERC ] 61,082 at P 22 (``[A]n
independent third party should design the solicitation, administer
bidding, and evaluate bids prior to the company's selection.'').
---------------------------------------------------------------------------

    224. Regarding Northwest Coalition's proposal that any utility or
affiliate ownership bid must be capped at its bid price and not allowed
traditional cost-plus ratemaking treatment, we decline to adopt this
criterion on rehearing. The Commission does not have any jurisdiction
to dictate how electric utility retail rates should be set. Instead, it
is the responsibility of retail regulators to establish the retail
rates associated with an award to a utility resulting from a
competitive solicitation. And to the extent that Northwest Coalition is
arguing that QFs are entitled to cost plus ratemaking, Congress has
already determined that QFs are not entitled to the same rate recovery
as purchasing utilities. With regard to Northwest Coalition's proposal
that the product sought, minimum bidding criteria, and detailed scoring
criteria must be made known to all parties at the same time, we find
that these requests should already be addressed in the factors adopted
by the Commission here, including the first factor, that the process be
open and transparent, and the fifth factor, which includes the
requirement of a post-solicitation report.\412\ We note that our
inclusion of the Allegheny principles also addresses the concerns
underlying this proposal.
---------------------------------------------------------------------------

    \412\ See Order No. 872, 172 FERC ] 61,041 at P 432 (stating
that a report must ``(1) [identify] the winning bidders; (2)
[include] a copy of any reports issued by the independent evaluator;
and (3) [demonstrate] that the solicitation program was implemented
without undue preference for the interests of the purchasing utility
or its affiliates'').
---------------------------------------------------------------------------

    225. We disagree with Northwest Coalition's argument that the final
rule ignores the lack of reasonable enforcement. If a QF believes that
it was improperly excluded from a competitive solicitation or lost a
competitive solicitation that did not meet the criteria in the final
rule, the QF may bring an enforcement action to the Commission or other
appropriate fora. Further, the final rule more clearly establishes how
states must run their auctions, and we do not presume at this juncture
that states will fail to follow these new rules. If the Commission or a
court finds that a competitive solicitation violates these criteria,
then a remedy may be warranted, for example a court may decide to
require a state to provide a specific rate to a QF or re-run the
competitive solicitation pursuant to those criteria.
    226. We also disagree with Northwest Coalition's argument that the
final rule relies on insufficient evidence that small QFs and those
primarily engaged in a business other than power production (e.g.,
irrigation districts and waste-to-power facilities) can succeed in the
type of all-source competitive solicitation identified in the rule. We
find that it may be difficult to define which entities could qualify
for this exemption and that this exemption may defeat the price
discovery benefits of including these entities in competitive
solicitations. We believe that a fairly administered competitive
solicitation is a more accurate reflection of a purchasing electric
utility's avoided energy and capacity costs. Moreover, in addition to
the requirement to provide standard rates for QFs 100 kW and below,
states already have discretion to set that standard rate threshold
above 100 kW. Removing their discretion to determine which entities
must participate in competitive solicitations may undermine the price
discovery benefit of competitive solicitations.
    227. We disagree with Public Interest Organizations' claim that the
final rule does not address its argument that Nevada's competitive
solicitation process is unfair because it limits to QFs to meet a
small, segregated portion of the utility's energy and unmet capacity
requirements. The final rule does not apply to competitive
solicitations, like the one in Nevada, that occurred prior to the
effective date of the final rule. For that reason, the Commission did
not address Public Interest Organizations' concerns with the Nevada
process in the final rule, nor will we do so here.\413\

Any future competitive solicitation must meet the criteria outlined in
the final rule, including the Allegheny principles.\414\ We clarify
that, if a competitive solicitation is not conducted in accordance with
the requirements of the final rule guidelines, then an aggrieved entity
may challenge the competitive solicitation before the Commission or in
the appropriate fora.
---------------------------------------------------------------------------

    \413\ See id. P 428 (``Without judging the competitive
solicitations conducted to date, we find that henceforth any
competitive solicitation that does not comply with these factors
will be viewed as not transparent and discriminatory, and not a
basis for either setting the avoided cost capacity rate that a QF
may charge the purchasing electric utility or limiting which
generators can receive a capacity rate. Phrased differently, we will
presume that any future competitive solicitation that does not
comply with the factors adopted in this final rule does not comply
with the Commission's regulations implementing PURPA.'').
    \414\ See id. P 430.
---------------------------------------------------------------------------

    228. A state must still ensure that QFs are entitled to an as-
available energy avoided cost rate regardless of whether they win a
competitive solicitation for capacity.\415\ Such as-available avoided
cost energy rates could be determined as a result of the competitive
solicitation, a competitive market price, or the avoided cost
regulations in 18 CFR 292.304(e) that pre-date the final rule.
---------------------------------------------------------------------------

    \415\ See id. P 422.
---------------------------------------------------------------------------

    229. We reject Mr. Mattson's argument that the competitive
solicitation framework infringes on a ``constitutional law right to
contract.'' \416\ Regardless of the outcome of a competitive
solicitation, the PURPA Regulations continue to permit QFs to negotiate
agreements with electric utilities that differ from those required by
PURPA.\417\ Similarly, the Commission's requirement in the final rule
that a QF may receive a capacity rate of zero if the QF loses a
competitive solicitation following the framework adopted in the final
rule and in which a utility's self-build participated is consistent
with the Commission's precedent.\418\ The final rule only governs the
maximum rate for a sale made pursuant to the mandatory purchase
obligation imposed on purchasing utilities by PURPA, but continues to
permit a QF to contract voluntarily at a different rate with a
purchasing utility.
---------------------------------------------------------------------------

    \416\ Mr. Mattson Motion for Time, Reconsideration, and Request
Answers at 1.
    \417\ See 18 CFR 292.301(b)(1).
    \418\ See City of Ketchikan, 94 FERC at 62,061 (``[A]voided cost
rates need not include the cost for capacity in the event that the
utility's demand (or need) for capacity is zero. That is, when the
demand for capacity is zero, the cost for capacity may also be
zero.'')).
---------------------------------------------------------------------------

    230. We disagree with Public Interest Organizations' assertion that
the competitive solicitation framework fails to ensure that a
competitive solicitation pays QFs the full avoided energy costs because
it does not require a utility to obtain all its energy needs through a
competitive solicitation.\419\ The primary purpose of a competitive
solicitation is to determine a utility's capacity needs, not its energy
needs, which can be purchased separately from capacity. The final rule
provides that QFs can continue to sell energy to utilities at the
purchasing utility's avoided energy costs outside of the context of a
competitive solicitation, even if such solicitations are the exclusive
vehicle for acquisition of capacity. The new regulatory text in 18 CFR
292.304(c)(8)(ii) provides that:
---------------------------------------------------------------------------

    \419\ Public Interest Organizations Comments at 99-101.

    To the extent that the electric utility procures all of its
capacity, including capacity resources constructed or otherwise
acquired by the electric utility, through a competitive solicitation
process conducted pursuant to Paragraph (b)(8)(i) of this section,
the electric utility shall be presumed to have no avoided capacity
costs unless and until it determines to acquire capacity outside of
such competitive solicitation process. However, the electric utility
shall nevertheless be required to purchase energy from qualifying
small power producers and qualifying cogeneration facilities.\420\
---------------------------------------------------------------------------

    \420\ See new 18 CFR 292.304(c)(8)(iii) (emphasis added); see
also Order No. 872, 172 FERC ] 61,041 at P 422 (``QFs would continue
to have the right to put energy to the utility at the as-available
avoided cost energy rate because the purchasing utility will still
be able to avoid incurring the cost of generating energy even when
it does not need new capacity.'').

    231. This regulation provides that the utility presumptively has no
avoided capacity costs if all the utility's capacity needs are
satisfied through the competitive solicitation. If the utility's
avoided energy costs change after a competitive solicitation is
conducted, the as-available avoided energy rate for a QF selling
outside such a competitive solicitation would necessarily be different
than the avoided energy rate determined in the competitive solicitation
itself. States must continue to use either competitive market prices or
the traditional factors in 18 CFR 292.304(e) to calculate avoided
energy costs at the time of delivery for QFs. Under the final rule,
where the purchasing electric utility procures all of its capacity,
including capacity resources constructed or otherwise acquired by the
electric utility, through a competitive solicitation process, the
electric utility is presumed to have no avoided capacity costs unless
and until it determines to acquire capacity outside of such competitive
solicitation process. However, under the final rule, QFs continue to
have the opportunity, outside of a regularly held competitive
solicitation, to sell energy at a purchasing utility's avoided cost
rate.

C. Rebuttable Presumption of Separate Sites

    232. In the final rule, the Commission determined that, if a small
power production facility seeking QF status is located one mile or less
from any affiliated small power production QFs that use the same energy
resource, it will be irrebuttably presumed to be at the same site as
those affiliated small power production QFs. If a small power
production facility seeking QF status is located 10 miles or more from
any affiliated small power production QFs that use the same energy
resource, it will be irrebuttably presumed to be at a separate site
from those affiliated small power production QFs. If a small power
production facility seeking QF status is located more than one mile but
less than 10 miles from any affiliated small power production QFs that
use the same energy resource, it will be rebuttably presumed to be at a
separate site from those affiliated small power production QFs.\421\
---------------------------------------------------------------------------

    \421\ Order No. 872, 172 FERC ] 61,041 at P 466.
---------------------------------------------------------------------------

    233. The Commission adopted the NOPR proposal to allow a small
power production facility seeking QF status to provide further
information in its certification (both self-certification and
application for Commission certification) or recertification (both
self-certification and application for Commission recertification) to
preemptively defend against anticipated challenges by identifying
factors that affirmatively show that its facility is indeed at a
separate site from affiliated small power production QFs that use the
same energy resource and that are more than one but less than 10 miles
from its facility. The Commission stated that it would allow any
interested person or entity to challenge a QF certification (both self-
certification and application for Commission certification) or
recertification (both self-recertification and application for
Commission recertification) that makes substantive changes to the
existing certification.\422\
---------------------------------------------------------------------------

    \422\ Id. P 467.
---------------------------------------------------------------------------

    234. The Commission also adopted the NOPR's proposed factors, with
certain additions.\423\
---------------------------------------------------------------------------

    \423\ Id. P 468.
---------------------------------------------------------------------------

1. Need for Reform
    235. In the final rule, the Commission found that, since the
establishment of the one-mile rule in the PURPA Regulations in 1980,
the development of large numbers of affiliated renewable resource
facilities requires a revision of the one-mile rule. The Commission
found that the final rule will reduce the

opportunity for developers of small power production facilities to
circumvent the current one-mile rule by strategically siting small
power production facilities that use the same energy resource slightly
more than one mile apart.\424\
---------------------------------------------------------------------------

    \424\ Id. P 472.
---------------------------------------------------------------------------

a. Requests for Rehearing
    236. Public Interest Organizations reiterate that there is little
or no evidence of circumvention in the record.\425\ Public Interest
Organizations argue that a theoretical threat that has failed to
materialize in any significant way during 40 years of small power-
production facility development sufficiently for the Commission to
consider it more than a possibility does not justify the burden imposed
by the final rule.\426\ Similarly, Solar Energy Industries assert that
changing one-mile rule precedent to prevent gaming without any evidence
of gaming in the record is arbitrary and capricious and will discourage
QF development.\427\ Solar Energy Industries contend that the
Commission is seeking to reduce the number of QFs that can be
constructed in any one territory.\428\
---------------------------------------------------------------------------

    \425\ Public Interest Organizations Request for Rehearing at 128
(citing Order No. 872, 172 FERC ] 61,041 at P 471).
    \426\ Id. at 128.
    \427\ Solar Energy Industries Request for Rehearing and/or
Clarification at 5, 26.
    \428\ Id. at 26.
---------------------------------------------------------------------------

    237. Public Interest Organizations argue that, assuming that it is
true that some QF developers are indeed making siting decisions based
on the one-mile boundary, it will be just as likely that they will make
siting decisions based on the ten-mile boundary; therefore, expanding
the radius from one mile to 10 miles does nothing to address the
purported problem of gaming boundaries.\429\ Public Interest
Organizations contend that developers will take the boundary into
account when making siting decisions, which is not to game the system
but rather to play by the rules.\430\ Solar Energy Industries agree
that facilities that are sited more than one mile apart have not
``gamed'' the one-mile rule; rather, those facilities have complied
with the one-mile rule.\431\
---------------------------------------------------------------------------

    \429\ Public Interest Organizations Request for Rehearing at
121.
    \430\ Id. at 122.
    \431\ Solar Energy Industries Request for Rehearing and/or
Clarification at 26.
---------------------------------------------------------------------------

b. Commission Determination
    238. As the Commission explained in the final rule, the record
shows that some large facilities were disaggregating into smaller
facilities and strategically spacing themselves slightly more than one
mile apart in order to be able to qualify as separate small power
production facilities.\432\ Because PURPA provides advantages for small
power production facilities, i.e., no larger than 80 MW, not large
facilities that exceed that cap and have disaggregated into smaller
facilities under that cap, and based on evidence and examples of QFs
separating into several smaller QFs just over one mile apart (in
efforts to be considered separate QFs for purposes of the one-mile
rule), the Commission determined that reform of the one-mile rule was
necessary.
---------------------------------------------------------------------------

    \432\ Order No. 872, 172 FERC ] 61,041 at P 470 (citing APPA
Comments, Docket No. RM19-15-000, at 21 (Dec. 3, 2019); Center for
Growth and Opportunity Comments, Docket No. RM19-15-000, at 5-6
(Dec. 3, 2019); Consumers Energy Comments, Docket No. RM19-15-000,
at 4 (Dec. 3, 2019); East River Comments, Docket No. RM19-15-000, at
1-2; EEI Comments, Docket No. RM19-15-000, at 43 (Dec. 3, 2019);
ELCON Comments, Docket No. RM19-15-000, at 35 (Dec. 3, 2019);
Governor Brad Little, Idaho Comments, Docket No. RM19-15-000, at 1
(Dec. 3, 2019); Idaho Commission Comments, Docket No. RM19-15-000,
at 5-7 (Dec. 3, 2019); Idaho Power Comments, Docket No. RM19-15-000,
at 13 (Dec. 3, 2019); Missouri River Energy Comments, Docket No.
RM19-15-000, at 5 (Dec. 3, 2019); Stephen Moore Comments, Docket No.
RM19-15-000, at 2 (Dec. 3, 2019); Northern Laramie Range Alliance
Comments, Docket No. RM19-15-000, at 2 (Dec. 3, 2019); NorthWestern
Comments, Docket No. RM19-15-000, at 9 (Dec. 3, 2019); NRECA
Comments, Docket No. RM19-15-000, at 14-15 (Dec. 3, 2019); Portland
General Comments, Docket No. RM19-15-000, at 14 (Dec. 3, 2019)).
---------------------------------------------------------------------------

    239. The following specific examples demonstrate the need for the
Commission to revise the one-mile rule. The Idaho Commission gave the
example of a group of five projects that had originally been proposed
as a single project greater than 80 MW and not eligible for PURPA. This
project was disaggregated into five smaller projects, each separated by
one mile, which were then eligible for Idaho's standard published rate
contracts at that time. The estimated cost impact of these five
projects disaggregating in order to qualify for more favorable standard
rate contracts was $10 million per year over the term of the
contract.\433\ The Idaho Commission also provided a chart showing the
wind projects brought before the Idaho Commission in 2009 and 2010,
explaining that the circumstances of these projects suggest that they
were disaggregated to qualify for the more favorable standard rate or
to take advantage of PURPA's must-purchase obligation.\434\
---------------------------------------------------------------------------

    \433\ Idaho Commission Comments, Docket No. AD16-16-000, at 8-9
(Nov. 7, 2016); see also Technical Conference Tr. at 34-35
(Commissioner Paul Kjellander, Idaho Commission).
    \434\ Idaho Commission Comments, Docket No. AD16-16-000, at 9-11
(Nov. 7, 2016).
---------------------------------------------------------------------------

    240. Commissioner Paul Kjellander of the Idaho Commission also
stated that, within Idaho Power's territory, there were 183 MW of power
from four developers that were broken up into 16 projects. He stated
that the Oregon Commission approved six PURPA projects that require
Idaho Power to take 60 MW of power from six solar projects, adding that
the similarities among these six projects include the same operation
dates, project size, terms and payment conditions, developer, and solar
panel manufacturers. He concluded that this looked like a disaggregated
project that stretched the spirit and intent of PURPA.\435\
---------------------------------------------------------------------------

    \435\ Technical Conference Tr. at 35-36 (Commissioner Paul
Kjellander, Idaho Commission).
---------------------------------------------------------------------------

    241. EEI and Xcel argued that the one-mile requirement can be
evaded as resources with common ownership, financing, and even
operation are located just slightly over one mile from each other to
qualify for the 80 MW threshold in the statute. EEI and Xcel provided
the example of Northern Laramie Range Alliance, in which the applicant
filed for QF self-certification of two 48.6 MW projects that were part
of a single wind farm with one site permit and that shared a point of
interconnection. Because the projects were located more than one mile
apart, each project was certified as an individual QF.\436\
---------------------------------------------------------------------------

    \436\ EEI Comments, Docket No. RM19-15-000, at 43 (Dec. 3, 2019)
(citing N. Laramie Range All., 138 FERC ] 61,171 (2012)); Xcel
Comments, Docket No. AD16-16-000, at 11 (Nov. 7, 2016); see also EEI
Comments, Docket No. RM19-15-000, at 43 (Dec. 3, 2019) (citing
Beaver Creek II, 160 FERC ] 61,052 (2017)); Xcel Comments, Docket
No. AD16-16-000, at 11 (Nov. 7, 2016) (citing DeWind Novus, LLC, 139
FERC ] 61,201 (2012)).
---------------------------------------------------------------------------

    242. Furthermore, large power stations based on modular generation
technologies like solar photovoltaic (PV) panels and wind turbines can
relatively easily be presented as subsets of the component generation
modules in order to appear as multiple smaller generation stations,
even if they act and operate as one large (i.e., over 80 MW) power
station in reality.
    243. Based on these concerns and evidence of large facilities
disaggregating into small facilities in order to circumvent the one-
mile rule and receive QF status, the Commission determined that it
would be best to address the circumvention of the one-mile rule by
reforming the one-mile rule, not simply addressing this concern on a
case-by-case basis.
    244. We agree that QF developers may make siting decisions based on
the 10-mile boundary just as they may have in the past based on the
one-mile

boundary. However, in the final rule, the Commission found that, at 10
miles or more apart, it can be assumed that affiliated small power
production facilities are sufficiently far apart that it is reasonable
to treat them as irrebuttably at separate sites.\437\ In contrast, the
Commission found that, for affiliated small power production facilities
using the same resource that are more than one mile but less than 10
miles apart, the distinction between same site or separate site was not
as clear and thus provided for a rebuttable presumption of separate
sites.\438\ In adopting these boundaries and accompanying presumptions,
the Commission recognized that 10 miles is a more reasonable place to
draw the line of irrebuttably separate sites than the previous one-mile
boundary, and provided for the ability to rebut the presumption for
affiliated small power production facilities in the less clear, grey
zone where affiliated facilities are more than one mile apart but less
than 10 miles apart.\439\
---------------------------------------------------------------------------

    \437\ Order No. 872, 172 FERC ] 61,041 at P 491.
    \438\ Id.
    \439\ See id. P 466, 491.
---------------------------------------------------------------------------

    245. We disagree with Public Interest Organizations and Solar
Energy Industries' contentions that taking the boundary into account
when making siting decisions is not gaming the system but playing by
the rules and that the Commission seeks to reduce the number of QFs
that can be constructed in any one territory. We find that
disaggregation practices--whereby a facility exceeding the 80 MW cap
and therefore unable to take advantage of the benefits of PURPA (such
as mandating that the utility buy its output) disaggregates into
several smaller facilities for the purpose of fitting within the
statutory mandate and receiving the benefits of PURPA--contradict the
spirit and purpose of PURPA. PURPA section 210(a) directs the
Commission to encourage cogeneration and small power production.\440\
PURPA defines a small power production facility as an eligible
facility, which, together with other facilities located at the same
site (as determined by the Commission), has a power production capacity
no greater than 80 MW.\441\ The statute bestows certain advantages on
small power production, not on large power production facilities that
masquerade as small power production. Disaggregation practices aim to
advantage large power production facilities with benefits that they are
not eligible to receive. The intention of the new same site
determination framework is not to reduce the number of QFs that can be
constructed in an area, but to encourage small power production
facilities as Congress intended under PURPA.
---------------------------------------------------------------------------

    \440\ 16 U.S.C. 824a-3(a).
    \441\ 16 U.S.C. 796(17)(A).
---------------------------------------------------------------------------

2. Distance Between Facilities
    246. In the final rule, the Commission adopted the NOPR proposal
that an entity can seek to rebut the presumption of separate sites only
for a small power production facility seeking QF status that have an
affiliated small power production QF or QFs that are located more than
one and less than 10 miles from it.\442\ The Commission recognized that
it is debatable where to set these thresholds. The Commission stated
that PURPA requires that no small power production facility, together
with other facilities located ``at the same site,'' exceed 80 MW and
Congress has tasked the Commission with defining what constitutes
facilities being at the same site for purposes of PURPA. The Commission
found that providing set geographic distances will limit unnecessary
disputes over whether facilities are at the same site; therefore, the
Commission must choose reasonable distances at which small power
production facilities will be considered irrebuttably at the same site
or irrebuttably at separate sites.\443\
---------------------------------------------------------------------------

    \442\ Order No. 872, 172 FERC ] 61,041 at P 490.
    \443\ Id. P 491.
---------------------------------------------------------------------------

    247. The Commission found that there are some affiliated small
power production facilities using the same energy resource that are so
close together that it is reasonable to treat them as irrebuttably at
the same site and that one mile or less is a reasonable distance to
treat such facilities as irrebuttably at the same site. The Commission
found that there are some small power production facilities that are
affiliated and may use the same energy resource but that are
sufficiently far apart that it is reasonable to treat them as
irrebuttably at separate sites and found that 10 miles or more is a
reasonable distance to treat such facilities as irrebuttably at
separate sites. For affiliated small power production facilities using
the same resource that are more than one mile but less than 10 miles
apart, the Commission found that the distinction between the same site
or separate site is not as clear; therefore, it is reasonable to treat
them as rebuttably at separate sites but to allow interested parties to
provide evidence to attempt to rebut that presumption. The Commission
found that establishing these reasonable distances, and particularly
establishing the ability to rebut the presumption of separate sites for
affiliated small power production facilities more than one mile but
less than 10 miles apart, better allows the Commission to address the
evolving shape and configuration of resources that are being developed
as QFs, such as modular solar or wind power plants, and provides for
improved administration of PURPA. The Commission therefore determined
that the one-mile and 10-mile limits are reasonable inflection points
for differentiating between the same site and separate sites.\444\
---------------------------------------------------------------------------

    \444\ Id.
---------------------------------------------------------------------------

    248. In the final rule, the Commission explained that, with respect
to hydroelectric generating facilities, the regulations currently
provide that the same energy resources essentially means ``the same
impoundment for power generation,'' finding that it is unlikely that
hydroelectric generating facilities located more than one mile apart
would rely on the same impoundment.\445\ The Commission explained that,
if that circumstance arises, the applicant could seek waiver, and argue
that its facilities should not be considered at the same site.\446\
---------------------------------------------------------------------------

    \445\ Id. P 492 n.769 (quoting 18 CFR 292.204(a)(2)(i)).
    \446\ Id. (citing 18 CFR 292.204(a)(3)).
---------------------------------------------------------------------------

    249. The Commission also noted that it was retaining the waiver
provision in 18 CFR 292.204(a)(3), allowing the Commission to waive the
method of calculation of the size of the facility for good cause.\447\
---------------------------------------------------------------------------

    \447\ Id. P 492 (citing 18 CFR 292.204(a)(3)).
---------------------------------------------------------------------------

a. Requests for Rehearing
    250. Public Interest Organizations argue that the Commission does
not connect the one-mile and 10-mile rule to the statutory phrase
``located at the same site,'' instead relying on policy arguments that
exceed the statutory text and FERC's authority.\448\ Public Interest
Organizations assert that the Commission ignored relevant data
presented by commenters and failed to articulate a satisfactory
explanation connecting facts to its ``ten-mile rule''
determination.\449\ Public Interest Organizations contend that the
decision was arbitrary and capricious because the Commission ignored
relevant data and

failed to articulate a satisfactory explanation connecting the facts
presented to its determination.\450\ Public Interest Organizations
further argue that there is nothing in the record to show that 10 miles
is a rational or appropriate threshold for determining whether QFs are
at the same site, adding that the record indicates that the new
approach will cause regulatory uncertainty and substantial burden on an
industry it is supposed to be encouraging.\451\ Similarly, Solar Energy
Industries argue that the Commission has not offered any justification
for the change.\452\
---------------------------------------------------------------------------

    \448\ Public Interest Organizations Request for Rehearing at
106.
    \449\ Id. at 124 (citing Solar Energy Industries Comments,
Docket No. RM19-15-000, at 62 (Dec. 3, 2019); North Carolina DOJ
Comments, Docket No. RM19-15-000, at 3-4 (Dec. 3, 2019); SC Solar
Alliance Comments, Docket No. RM19-15-000, at 17 (Dec. 3, 2019);
North Carolina Commission Staff Comments, Docket No. RM19-15-000, at
6 (Dec. 3, 2019); Borrego Solar Comments, Docket No. RM19-15-000, at
3-5 (Dec. 3, 2019)).
    \450\ Id. (citing Motor Vehicles Mfrs. Ass'n v. State Farm Mut.
Auto. Inst. Col, 463 U.S. at 43).
    \451\ Id. at 125.
    \452\ Solar Energy Industries Request for Rehearing and/or
Clarification at 29.
---------------------------------------------------------------------------

    251. Public Interest Organizations contend that the Commission does
not explain why there should be any geographic distance at which two
facilities are irrebuttably considered to be located at the same
site.\453\
---------------------------------------------------------------------------

    \453\ Public Interest Organizations Request for Rehearing at
120.
---------------------------------------------------------------------------

    252. Public Interest Organizations question whether the same
opportunities for waiver provided under the previous bright-line test,
which the Commission maintained in the final rule, will apply for
facilities within one mile of each other.\454\ Public Interest
Organizations argue that, if a facility received a waiver in the past,
there is no guarantee that they would receive one again under the final
rule.\455\ Public Interest Organizations assert that the inability for
an applicant to show that a small power production facility should not
be treated as located at the same site as other affiliated facilities
using the same resource within one mile discourages QF
development.\456\
---------------------------------------------------------------------------

    \454\ Id. at 106-07.
    \455\ Id. at 132.
    \456\ Id. at 107.
---------------------------------------------------------------------------

    253. Public Interest Organizations raise concerns about how the
final rule will apply to hydroelectric facilities, asserting that the
previous one-mile rule did not penalize hydroelectric facilities that
were located in close proximity but should not be deemed to be at the
same site.\457\ Public Interest Organizations state that, under the
previous one-mile rule, hydroelectric facilities were considered to be
located at the same site whenever they use water from the same
impoundment.\458\ Public Interest Organizations further state that the
final rule creates a new rule that a hydroelectric facility will be
considered to be located at the same site as the one for which
certification is sought if the facility is ``located within one mile of
the facility for which qualification or recertification is sought and
use[s] water from the same impoundment for power generation.'' \459\
Public Interest Organizations add that a footnote in the final rule
states that ``[f]or hydroelectric generating facilities, the
regulations currently provide that the same energy resources
essentially means ``the same impoundment for power generation.'' \460\
Public Interest Organizations state that it appears that the Commission
in practice would consider a hydroelectric facility to be located at
the same site whenever it uses the same impoundment as the facility for
which qualification is sought, is located within one mile, or both,
which would conflict with the text of the final rule and limit QF
development.\461\
---------------------------------------------------------------------------

    \457\ Id. at 107-08 & n.312.
    \458\ Id. at 108 n.312.
    \459\ Id. at 107-09 & n.312.
    \460\ Id. at 108-09 n.312 (citing Order No. 872, 172 FERC ]
61,041 at P 492 n.769).
    \461\ Id.
---------------------------------------------------------------------------

    254. Northwest Coalition, Public Interest Organizations, and Solar
Energy Industries reiterate NOPR comments that the new rebuttable
presumption will increase the ``exclusion zone'' around a QF's
electrical generating equipment from approximately three square miles
to over 300 square miles--a 100% increase.\462\ Public Interest
Organizations argue that a 100-fold increase in the area in which a
party that owns a small power production facility will find it very
difficult or impossible to develop another facility is the definition
of discouraging small power production facilities.\463\
---------------------------------------------------------------------------

    \462\ Northwest Coalition Request for Rehearing at 54 (citing
Order No. 872, 172 FERC ] 61,041 at P 483); Public Interest
Organizations Request for Rehearing at 109; Solar Energy Industries
Request for Rehearing and/or Clarification at 27, 29.
    \463\ Public Interest Organizations Request for Rehearing at
109-10.
---------------------------------------------------------------------------

b. Commission Determination
    255. We disagree with Public Interest Organizations' arguments that
the Commission did not provide an explanation for the ``10-mile rule''
beyond policy arguments and did not adequately connect the ``10-mile
rule'' to the statutory determination of ``located at the same site.''
PURPA requires that no small power production facility, together with
other facilities located ``at the same site,'' exceed 80 MW, and
Congress has tasked the Commission with defining what constitutes
facilities being at the same site for purposes of PURPA.\464\ The
Commission explained that, just as there are some facilities that may
be so close that it is reasonable to irrebuttably treat them as a
single facility (those one mile or less apart), there are some
facilities that are sufficiently far apart that it is reasonable to
treat them as irrebuttably separate facilities.\465\ The Commission
believed that the latter distance is 10 miles or more apart.\466\ The
statute allows the Commission to determine the meaning of ``same
site.'' \467\ Pursuant to this discretion, the Commission chose to pick
a distance as an inflection point beyond which it is safe to
irrebuttably presume separate sites.
---------------------------------------------------------------------------

    \464\ 16 U.S.C. 796(17)(A)(ii).
    \465\ Order No. 872, 172 FERC ] 61,041 at P 491. See also id. P
466.
    \466\ Id. P 491. See also id. P 466.
    \467\ 16 U.S.C. 796(17)(A)(ii).
---------------------------------------------------------------------------

    256. In response to arguments that the 10-mile demarcation is
arbitrary and that nothing in the record supports it as a rational or
appropriate threshold,\468\ we note that PURPA requires that no small
power production facility, together with other facilities located ``at
the same site,'' exceed 80 MW. In the final rule, the Commission aimed
to protect that statutory requirement by ensuring that facilities that,
together with other affiliated facilities located ``at the same site,''
exceeded 80 MW did not receive the benefits that Congress intended only
small facilities 80 MW and under to receive. The Commission therefore
found that 10 miles is qualitatively a large enough distance to serve
as the inflection point beyond which it is safe to irrebuttably presume
separate sites, while allowing entities to seek to rebut such
presumption between one mile and 10 miles.\469\ Ten miles need not be
the only possible choice under the statute in order for it to be
considered reasonable; what matters is that the choice made in the
exercise of the Commission's discretion does not run afoul of the
statue and is reasonable rather than arbitrary and capricious.\470\
---------------------------------------------------------------------------

    \468\ Public Interest Organizations state that ``[t]here is
nothing in the record to show that [10] miles is a rational or
appropriate threshold for determining whether QFs are at the `same
site.' '' We correct Public Interest Organizations' statement by
noting that affiliated small power production facilities 10 miles or
more apart are irrebuttably presumed to be at separate sites and
facilities between one mile and 10 miles are rebuttably presumed to
also be separate sites. Order No. 872, 172 FERC ] 61,041 at P 466.
    \469\ Id. P 491.
    \470\ See CP Kelco Oy v. United States, 37 ITRD 1093 (Ct. Int'l
Trade 2015) (``[T]his threshold is a line in the sand: Commerce
might have picked a different number to effectuate the statute's
purpose, with reasonable results . . . Yet because the agency's
choice does not run afoul of the statute and is not arbitrary, the
court will defer to Commerce despite the possibility of
alternatives.''). See also U.S. Steel Grp. v. United States, 96 F.3d
1352, 1362 (Fed. Cir. 1996) (``So long as the Commission's analysis
does not violate any statute and is not otherwise arbitrary and
capricious, the Commission may perform its duties in the way it
believes most suitable.''); Mid Continent Nail Corp. v. United
States, 34 C.I.T. 512, 520-21 (2010) (finding, in response to
contentions that the Commission's definitions of statutory terms
were ``seemingly random values,'' that the numbers in the
Commission's definitions did not violate the statute and were not
otherwise arbitrary and capricious where the they are applied
reasonably). Cf. Int'l Soc. for Krishna Consciousness, Inc. v.
McAvey, 450 F. Supp. 1265, 1269 (S.D.N.Y. 1978) (``choosing any
fixed number would seem arbitrary, yet necessary in order to strike
a balance between the competing interests.''); AFPA v. FERC, 550
F.3d at 1183 (permitting Commission to establish rebuttable
presumption via rulemaking rather than case-by-case adjudication in
PURPA section 210(m) context).

---------------------------------------------------------------------------

    257. We find no merit in Public Interest Organizations' arguments
that the final rule does not explain why there should be any geographic
distance at which two facilities are irrebuttably considered located at
the same site. PURPA requires that no small power production facility,
together with other facilities located ``at the same site,'' exceed 80
MW. As the Commission explained in the final rule, there are some
affiliated small power production facilities using the same energy
resource that are so close together that it is reasonable to treat them
as irrebuttably at the same site. Consistent with long standing
practice, the Commission has found that one mile or less is a
reasonable distance to treat such affiliated facilities as irrebuttably
at the same site.\471\ Additionally, in response to Public Interest
Organizations, we reiterate that the final rule retains the waiver
provision in 18 CFR 292.204(a)(3), which allow the Commission to waive
the method of calculation of the size of the facility for good
cause.\472\
---------------------------------------------------------------------------

    \471\ Order No. 872, 172 FERC ] 61,041 at P 491.
    \472\ Id. P 492 (citing 18 CFR 292.204(a)(3)).
---------------------------------------------------------------------------

    258. In response to Public Interest Organizations' concerns that it
is unclear what the waiver provision will mean now that the one-mile
rule is irrebuttable, or whether those who previously obtained a waiver
will get it again if they recertify, we note that the Commission has
always determined whether to grant waivers on a case-by-case basis. The
Commission will continue to apply the waiver provision consistent with
the Commission's waiver precedent. For example, in Windfarms, Ltd., the
Commission granted waiver of the one-mile rule, finding that three
clusters of wind turbine generators were at three separate and distinct
sites when they ``had sufficiently distinct and identifiable
topographical and energy resource-related characteristics.'' \473\ In
contrast, in Pinellas County, the Commission declined to grant waiver
of the one-mile rule because a new generator was within 600 to 700 feet
of the existing generator.\474\
---------------------------------------------------------------------------

    \473\ Windfarms, Ltd., 13 FERC ] 61,017 (1980).
    \474\ Pinellas County, Florida, 50 FERC ] 61,269 (1990).
---------------------------------------------------------------------------

    259. We disagree with Public Interest Organizations that the final
rule establishes a new rule that hydroelectric facilities are at the
same site if they are located within one mile of the facility for which
qualification is sought and at the same impoundment. The final rule did
not change the prior requirement that hydroelectric facilities are at
the same site if they are located within one mile of the facility for
which qualification is sought and at the same impoundment.\475\ The
only change that the Commission made in the final rule was to create a
rebuttable presumption of separate sites for affiliated small power
production facilities located more than one mile but less than 10 miles
apart. Footnote 769 of the final rule, noted by Public Interest
Organizations, explains that it is unlikely that hydroelectric
generating facilities located more than one mile apart would be located
on the same impoundment. We clarify that, if a hydroelectric generating
facility is more than a mile apart (but less than 10 miles apart) from
an affiliated facility, yet on the same impoundment, the rebuttable
presumption would be that they are at separate sites. We further
clarify that, although the second sentence of footnote 769 suggested
that a hydroelectric generating facility in this circumstance was free
to seek waiver (most likely in order to eliminate any uncertainty as to
its status), it would be unlikely that any such a facility would, in
practice, need to request such waiver.
---------------------------------------------------------------------------

    \475\ See El Dorado Cty. Water Agency, 24 FERC ] 61,280, at
61,577 (1983) (El Dorado) (``Under the rule, hydroelectric
facilities using the same impoundment as a water source and located
within one mile of each other are considered part of the same
site.''); Small Power Production and Cogeneration Facilities--
Qualifying Status, Order No. 70, 45 FR 17995 (Mar. 20, 1980), FERC
Stats. & Regs. ] 30,134, at 30,943 (1980) (cross-referenced at 10
FERC ] 61,230) (``Hydroelectric facilities . . . are considered to
be located at the same site only if the facilities use water from
the same impoundment for power generation. The Commission views this
additional provision for hydroelectric facilities as necessary
because use of the one-mile rule alone might discourage the
development of facilities on separate waterways which are within one
mile of each other.'') (cross-referenced at 10 FERC ] 61,230),
orders on reh'g, Order No. 70-A, FERC Stats. & Regs. ] 30,159
(cross-referenced at 11 FERC ] 61,119) and FERC Stats. & Regs. ]
30,160 (cross-referenced at 11 FERC ] 61,166), order on reh'g, Order
No. 70-B, FERC Stats. & Regs. ] 30,176 (cross-referenced at 12 FERC
] 61,128), order on reh'g, FERC Stats. & Regs. ] 30,192 (1980)
(cross-referenced at 12 FERC ] 61,306), amending regulations, Order
No. 70-D, FERC Stats. & Regs. ] 30,234 (cross-referenced at 14 FERC
] 61,076), amending regulations, Order No. 70-E, FERC Stats. & Regs.
] 30,274 (1981) (cross-referenced at 15 FERC ] 61,281) (emphasis
added).
---------------------------------------------------------------------------

    260. In the final rule, the Commission addressed Northwest
Coalition, Public Interest Organizations, and Solar Energy Industries'
contention that the new rule causes a 100-times increase to the
``exclusion zone'' around a QF's electrical generating equipment and a
100-fold increase in the area in which a party who owns a small power
production facility will find it very difficult or impossible to
develop another facility is almost the definition of discouraging small
power production facilities.\476\ We reiterate that the rule providing
for a rebuttable presumption for affiliated small power production QFs
located more than one but less than 10 miles apart is necessary to
address allegations of improper circumvention of the one-mile rule that
had been presented to the Commission.\477\ Furthermore, we disagree
with characterizing a rebuttable presumption of separate sites between
one mile and 10 miles as an ``exclusion'' zone for development
purposes. While QF developers understandably may prefer that any
attempts to rebut be prohibited, our disagreement with their preference
(and our establishment of a presumption of separate sites between one
mile and 10 miles, albeit a rebuttable presumption) can hardly be
equated with enacting a development exclusion zone.
---------------------------------------------------------------------------

    \476\ See Order No. 872, 172 FERC ] 61,041 at P 495.
    \477\ Id.
---------------------------------------------------------------------------

3. Factors
    261. In the final rule, the Commission adopted the physical and
ownership factors proposed in the NOPR with a few modifications. First,
the Commission modified the NOPR proposal by changing terminology
relating to the determination of whether facilities are separate
facilities to focus not on whether they are separate facilities, but
rather to mirror the statutory language referring to ``the same site.''
Accordingly, the Commission adopted these factors as relevant indicia
of whether affiliated small power production facilities are ``at the
same site.'' Second, the Commission modified the NOPR proposal to
identify the following additional physical factors as indicia that
small power production facilities should be considered located at the
same site: (1) Evidence of shared control systems; (2) common
permitting and land leasing; and (3) shared step-up transformers.\478\
---------------------------------------------------------------------------

    \478\ Id. P 508.

---------------------------------------------------------------------------

    262. Specifically, the Commission adopted the following factors as
examples of the factors the Commission may consider in deciding whether
small power production facilities that are owned by the same person(s)
or its affiliates are located ``at the same site'': (1) Physical
characteristics, including such common characteristics as
infrastructure, property ownership, property leases, control
facilities, access and easements, interconnection agreements,
interconnection facilities up to the point of interconnection to the
distribution or transmission system, collector systems or facilities,
points of interconnection, motive force or fuel source, off-take
arrangements, connections to the electrical grid, evidence of shared
control systems, common permitting and land leasing, and shared step-up
transformers; and (2) ownership/other characteristics, including such
characteristics as whether the facilities in question are owned or
controlled by the same person(s) or affiliated persons(s), operated and
maintained by the same or affiliated entity(ies), selling to the same
electric utility, using common debt or equity financing, constructed by
the same entity within 12 months, managing a power sales agreement
executed within 12 months of a similar and affiliated small power
production qualifying facility in the same location, placed into
service within 12 months of an affiliated small power production QF
project's commercial operation date as specified in the power sales
agreement, or sharing engineering or procurement contracts.\479\
---------------------------------------------------------------------------

    \479\ Id. P 509.
---------------------------------------------------------------------------

    263. The Commission adopted the NOPR proposal to allow a small
power production facility seeking QF status to provide further
information in its certification (both self-certification and
application for Commission certification) or recertification (both
self-recertification and application for Commission recertification) to
preemptively defend against rebuttal by identifying factors that
affirmatively show that its facility is indeed at a separate site from
affiliated small power production QFs more than one but less than 10
miles away from it. The Commission stated that any party challenging a
QF certification (both self-certification and application for
Commission certification) or recertification (both self-recertification
and application for Commission recertification) that makes substantive
changes to the existing certification would, in its protest, be allowed
to correspondingly identify factors to show that the small power
production facility seeking QF status and affiliated small power
production QFs more than one but less than 10 miles from that facility
are actually at the same site.\480\
---------------------------------------------------------------------------

    \480\ Id. P 510.
---------------------------------------------------------------------------

    264. The Commission emphasized that, as a general matter, no one
factor is dispositive. The Commission stated that it will conduct a
case-by-case analysis, weighing the evidence for and against, and the
more compelling the showing that affiliated small power production QFs
should be considered to be at the same site as the small power
production facility seeking QF status in a specific case, the more
likely the Commission will be to find that the facilities involved in
that case are indeed located ``at the same site.'' \481\
---------------------------------------------------------------------------

    \481\ Id. P 511.
---------------------------------------------------------------------------

a. Requests for Rehearing
    265. Solar Energy Industries assert that in adopting the physical
and ownership characteristics as proposed in the NOPR, the Commission
stepped beyond the statutory bounds that limit the Commission to
determining whether a facility is located ``at the same site'' as any
other facilities,\482\ instead imposing a separate facilities analysis.
Solar Energy Industries argue that the Commission has previously
recognized that ``[t]he critical test under PURPA relates to whether
the facilities are located at one site rather than whether they are
integrated as a project.'' \483\ Solar Energy Industries contend that
the Commission erred in concluding that ownership and other
characteristics are germane to the ``same site'' determination.\484\
Solar Energy Industries claim that Congress did not authorize the
Commission to analyze factors that have nothing to do with physical
commonality or surrounding geographical terrain as part of the same
site determination.\485\
---------------------------------------------------------------------------

    \482\ Solar Energy Industries Request for Rehearing and/or
Clarification at 30.
    \483\ Id. at 26, 31-32 (citing El Dorado, 24 FERC at 61,578).
    \484\ Id. at 31.
    \485\ Id. at 30-31.
---------------------------------------------------------------------------

    266. Similarly, Public Interest Organizations assert that the
Commission's definition of ``at the same site'' is ``beyond the meaning
that the statute can bear.'' \486\ Public Interest Organizations argue
that the American Heritage Dictionary defines ``site'' as ``[t]he place
where a structure or group of structures was, is, or is to be
located.'' \487\ Public Interest Organizations contend that the statute
limits multiple QF facilities to the 80 MW cap only if those facilities
are located at the same physical place.\488\ Public Interest
Organizations claim that whether affiliated generators using the same
energy resource and which are located between one mile and 10 miles are
located at separate sites depends on various non-exclusive and non-
dispositive factors, many of which have no relationship to whether the
two facilities are located in the same physical place.\489\
---------------------------------------------------------------------------

    \486\ Public Interest Organizations Request for Rehearing at 103
(citing MCI Telecommunications Corp. v. Am. Tel. & Tel. Co., 512
U.S. 218, 229 (1994)).
    \487\ Id. (citing The American Heritage Dictionary of the
English Language 55 (3d ed. 1992)).
    \488\ Id. at 103-04.
    \489\ Id. at 105.
---------------------------------------------------------------------------

    267. Public Interest Organizations argue that the reasonable
meaning of the phrase does not permit the Commission's definition that
introduces numerous extraneous factors, such as corporate structure,
financing, offtake entities, number of energy sources or ``motive
forces,'' shared use of offsite engineering services or maintenance
contractors, or construction timelines.\490\ Solar Energy Industries
assert that the employment of common contractors, such as grading and
electrical contractors, has nothing to do with whether two otherwise
distinct generation facilities are located at the ``same site,''
instead having more to do with the availability of experienced,
qualified contractors in a given region.\491\ Solar Energy Industries
contend that many QFs are developed in rural regions where there are
often a limited number of qualified maintenance providers and a
commonality of such engagement should not be a factor in the
Commission's ``same site'' analysis. Solar Energy Industries add that
the fact that two facilities are constructed by the same entity within
a period of 12 months is also irrelevant for a ``same site''
determination given that there are a limited number of qualified
construction firms within each region.\492\ Solar Energy Industries
claim that portfolios of QFs in multiple states (and which thus are
unquestionably at separate sites) are frequently financed (and re-
financed) as part of a common investment portfolio for passive
investment vehicles that do not exercise day-to-day control over the
QF; therefore, they should not determine whether two facilities with
separate ownership structures should not be

consolidated for purposes of the 80 MW size limitation.\493\
---------------------------------------------------------------------------

    \490\ Id. at 104 (citing Summit Petroleum Corp. v. U.S. EPA, 690
F.3d 733, 742 (6th Cir. 2012)).
    \491\ Solar Energy Industries Request for Rehearing and/or
Clarification at 31.
    \492\ Id.
    \493\ Id.
---------------------------------------------------------------------------

    268. Public Interest Organizations argue that there are significant
problems with the factors list that render the factors unreasonable,
arbitrary, and capricious.\494\ Public Interest Organizations assert
that the failed to respond to the flaws raised regarding the factors
identified by the Commission for consideration under the rebuttable
presumption, instead summarily adopting these factors.\495\ Public
Interest Organizations state that commenters identified the list of
``physical characteristics,'' particularly ``control facilities,''
``access and easements,'' ``collector systems or facilities,'' and
``property leases,'' as ``far too broad and unclear,'' and subject to
varying interpretations.\496\ Public Interest Organizations contend
that factors listed under ``ownership and other characteristics,'' such
as control and maintenance, are even more problematic.\497\ Public
Interest Organizations argue that, in certain geographic regions, there
are often a limited number of solar maintenance companies, creating the
opportunity for frivolous challenges to QF certifications and
recertifications.\498\ Public Interest Organizations point to Southeast
Public Interest Organizations' comments that
---------------------------------------------------------------------------

    \494\ Public Interest Organizations Request for Rehearing at
111.
    \495\ Id. at 124-25 (citing Order No. 872, 172 FERC ] 61,041 at
PP 501-09).
    \496\ Id. at 126 (citing Southeast Public Interest Organizations
Comments, Docket No. RM19-15-000, at 34 (Dec. 3, 2019); SC Solar
Alliance Comments, Docket No. RM19-15-000, at 17 (Dec. 3, 2019)).
    \497\ Id. (citing Southeast Public Interest Organizations
Comments, Docket No. RM19-15-000, at 34 (Dec. 3, 2019); SC Solar
Alliance Comments, Docket No. RM19-15-000, at 17-18 (Dec. 3, 2019)).
    \498\ Id. (citing Southeast Public Interest Organizations
Comments, Docket No. RM19-15-000, at 35 (Dec. 3, 2019); SC Solar
Alliance Comments, Docket No. RM19-15-000, at 18 (Dec. 3, 2019);
North Carolina DOJ Comments, Docket No. RM19-15-000, at 7-8 (Dec. 3,
2019)).

``[l]ikewise, the sale of electricity to a common utility, the
financing of a project through a mutual lender, the construction of
a facility through a mutual contractor, the timing of contract
execution, and the timing of facilities being placed into service
are all factors listed in the NOPR which do not provide relevant
evidence as to common ownership requiring facilities to be
considered a single unit. The use of these factors will likely
prejudice solar facilities constructed nearby each other that used
common associates, contractors, or partnering organizations or
entities.'' \499\
---------------------------------------------------------------------------

    \499\ Id. at 127 (citing Southeast Public Interest Organizations
Comments, Docket No. RM19-15-000, at 35 (Dec. 3, 2019)).

    269. Public Interest Organizations assert that, rather than
grappling with the data and information presented by commenters on
these factors, the final rule simply summarizes the critiques and then
summarily concludes that these factors shall be adopted in the final
rule.\500\ Public Interest Organizations argue that the lack of
response to these criticisms and failure to articulate a rationale for
why the factors are appropriate for making a same site determination
render the Commission's determination arbitrary and capricious.\501\
---------------------------------------------------------------------------

    \500\ Id.
    \501\ Id.
---------------------------------------------------------------------------

    270. Solar Energy Industries contend that, by going beyond the same
site limitation, the Commission is discouraging the development of
these resources.\502\ Solar Energy Industries assert that the
Commission's failure to provide support for the expansion of its
authority beyond that granted by Congress is arbitrary, capricious, and
not consistent with reasoned decision-making.\503\
---------------------------------------------------------------------------

    \502\ Solar Energy Industries Request for Rehearing and/or
Clarification at 26.
    \503\ Id. at 27, 30 (citing Windfarms, Ltd., 13 FERC at 61,032).
---------------------------------------------------------------------------

    271. Solar Energy Industries seek rehearing of the Commission's
determination in Paragraph 508 and ask the Commission to rescind dicta
and associated regulations allowing for review, evaluation, or
consideration of physical and operational characteristics that are not
germane to whether a facility, ``together with any other facilities
located at the same site,'' has a power production capacity greater
than 80 MW.\504\ Solar Energy Industries argue that, if the Commission
does not grant reconsideration, a QF could be subject to challenge
throughout the facility's entire useful life based on overly broad
factors that are not related to preventing a QF from ``gaming'' the
same-site determination and development of other QFs long after a QF
starts operation.\505\
---------------------------------------------------------------------------

    \504\ Id. at 27.
    \505\ Id. at 34.
---------------------------------------------------------------------------

    272. Public Interest Organizations add that, although the final
rule allows applicants to ``preemptively defend against rebuttal by
identifying factors that affirmatively show that its facility is indeed
at a separate site,'' it does not provide guidance on what these
factors are, which creates uncertainty.\506\
---------------------------------------------------------------------------

    \506\ Public Interest Organizations Request for Rehearing at 110
(citing Order No. 872, 172 FERC ] 61,041 at PP 480, 510).
---------------------------------------------------------------------------

b. Commission Determination
    273. PURPA defines small power production facilities as those
facilities that have ``a power production capacity which, together with
any other facilities located at the same site (as determined by the
Commission), is not greater than 80 megawatts.'' \507\ Congress notably
did not specify that ``site'' may only encompass consideration of
physical or geographic factors; in fact, Congress expressly delegated
the determination of ``site'' to the Commission.\508\ When the
Commission adopted the PURPA Regulations in 1980, it determined that
the capacity of all facilities within one mile of each other and which
use the same energy resource and are owned by the same person, be added
together.\509\ Thus, for 40 years the PURPA Regulations implementing
``same site'' have included examination not only of geography or
distance, but also ownership and resource. The final rule's inclusion
of physical and ownership factors is a continuation of the Commission's
past practice and is not, as Solar Energy Industries contend, an
expansion of the Commission's authority. We therefore decline to
rescind the list of example factors, as requested by Solar Energy
Industries.
---------------------------------------------------------------------------

    \507\ 16 U.S.C. 796(17)(A)(ii).
    \508\ Id.
    \509\ Order No. 70, FERC Stats. & Regs. ] 30,134 at 30,939; see
also 18 CFR 292.204(a)(1).
---------------------------------------------------------------------------

    274. Solar Energy Industries' reliance on El Dorado is misplaced.
In El Dorado, a protester argued that three hydroelectric facilities
located more than one mile from each other should nevertheless be
treated as a single hydroelectric project, noting that the three
facilities were aggregated together as a single project for the
purposes of receiving a hydroelectric license. The Commission found
that, because the three facilities were located more than a mile from
each other, under the then-current regulations, the facilities were
located at three distinct sites, despite having been aggregated
together for the purpose of receiving a hydroelectric license. The
sentence Solar Energy Industries quotes, ``the critical test under
PURPA relates to whether the facilities are located at one site rather
than whether they are integrated as a project,'' explains that the
requirements for certification as a small power production facility are
not the same requirements to receive a hydroelectric license.\510\ The
Commission did not address which kind of considerations may go into the
same site determination; it merely applied the same site analysis

that existed at the time, distinct from other requirements.
---------------------------------------------------------------------------

    \510\ El Dorado, 24 FERC at 61,577-78.
---------------------------------------------------------------------------

    275. We disagree with Solar Energy Industries' contention that, if
the Commission does not grant reconsideration of the list of example
factors, a QF could be subject to challenge throughout the facility's
entire useful life. We note that, prior to the final rule, an
interested party could file a petition for declaratory order
challenging the QF certification at any time and on any grounds. An
interested party may still file a petition for declaratory order with
the accompanying filing fee, just as they could prior to the effective
date of the final rule. The final rule merely added what already exists
for essentially every Commission proceeding, ``no fee'' protests, which
will not subject a QF to challenges throughout the facility's entire
useful life because any such protest must be filed with 30 days from
the date of the filing of the Form No. 556 at the Commission.\511\
---------------------------------------------------------------------------

    \511\ Order No. 872, 172 FERC ] 61,041 at P 554.
---------------------------------------------------------------------------

    276. Moreover, we reiterate that the final rule provided that such
protests (and hence, consideration of the factors) may only be filed in
response to an initial certification or to a recertification that makes
substantive changes to the existing certification,\512\ which limits
the time periods during which such a protest may be filed.
Additionally, once the Commission has affirmatively certified an
applicant's QF status in response to a protest opposing a self-
certification or self-recertification, or in response to an application
for Commission certification or recertification, any later protest to a
recertification (self-recertification or application for Commission
recertification) making substantive changes to a QF's existing
certification must demonstrate changed circumstances from the facts
upon which the Commission acted on the certification filing that call
into question the continued validity of the earlier certification.\513\
---------------------------------------------------------------------------

    \512\ Id. P 550.
    \513\ Id. P 469.
---------------------------------------------------------------------------

    277. We also disagree with Public Interest Organizations' assertion
that the Commission failed to respond to the flaws raised regarding the
factors, including that the list of ``physical characteristics,''
particularly ``control facilities,'' ``access and easements,''
``collector systems or facilities,'' and ``property leases,'' was far
too broad, unclear, and subject to varying interpretations.\514\ In the
final rule, the Commission explained that these are examples of factors
the Commission may consider on a case-by-case basis. The factors are
not further defined because their application will depend on the
context of the individual certification. Likewise, we disagree with
Public Interest Organizations' contentions that ``ownership and other
characteristics'' is a problematic factor and ``the sale of electricity
to a common utility, the financing of a project through a mutual
lender, the construction of a facility through a mutual contractor, the
timing of contract execution, and the timing of facilities being placed
into service'' do not provide relevant evidence of common ownership
that requires facilities to be considered a single unit.\515\ We
reiterate that no single factor is dispositive and the factors are
included as examples of facts that the Commission may consider on a
case-by-case basis.\516\ For example, Public Interest Organizations
state that, in certain geographic regions, there are a limited number
of solar maintenance companies, and Southeast Public Interest
Organizations NOPR Comments stated that, because of the costs and
complexity of financing the construction of QFs, developers frequently
secure financing for a portfolio of distinct projects that may be
hundreds of miles apart, at clearly separate facilities.\517\ A
protester could indeed assert common maintenance or common financing as
evidence that a facility is at the same site as another facility, but
the Commission could choose to dismiss a protest based on those factors
if the protestor's claims are not sufficient to warrant a ``same site''
finding, particularly if there are no other factors indicating that the
facilities are at the same site.
---------------------------------------------------------------------------

    \514\ Public Interest Organizations Request for Rehearing at 126
(citing Southeast Public Interest Organizations Comments, Docket No.
RM19-15-000, at 34 (Dec. 3, 2019); SC Solar Alliance Comments,
Docket No. RM19-15-000, at 17 (Dec. 3, 2019)). See also Order No.
872, 172 FERC ] 61,041 at P 501.
    \515\ Public Interest Organizations Request for Rehearing at 127
(citing Southeast Public Interest Organizations Comments, Docket No.
RM19-15-000, at 35 (Dec. 3, 2019)).
    \516\ Order No. 872, 172 FERC ] 61,041 at P 511.
    \517\ Southeast Public Interest Organizations Comments, Docket
No. RM19-15-000, at 35 (Dec. 3, 2019).
---------------------------------------------------------------------------

    278. Similarly, Public Interest Organizations argues that the
Commission must articulate a rationale for why the factors are
appropriate for making a same site determination. We believe that, when
affiliated facilities are located more than one mile but less than 10
miles from each other and demonstrate these factors, then they may
reasonably be considered to be located at the same site. We again
stress that, in the final rule, the Commission stated that the factors
in the list were merely ``examples of the factors the Commission may
consider.'' \518\ The Commission will conduct a case-by-case analysis,
weighing the evidence for and against determining whether small power
production facilities that are owned by the same person(s) or its
affiliates are located ``at the same site.'' The Commission included
the example factors in the final rule to provide a guide for the kinds
of facts that an applicant seeking QF status or that a protester may
assert, and that the Commission may consider in making its
determination.
---------------------------------------------------------------------------

    \518\ Order No. 872, 172 FERC ] 61,041 at P 509.
---------------------------------------------------------------------------

    279. In response to Public Interest Organizations' concern that the
Commission allows applicants to ``preemptively defend against rebuttal
by identifying factors that affirmatively show that its facility is
indeed at a separate site'' without identifying these factors, we
clarify that the factors that may be used by an applicant to
preemptively defend against rebuttal include the example factors
identified in that same Paragraph 509 of the final rule which is the
subject of the discussion above.\519\
---------------------------------------------------------------------------

    \519\ See id.
---------------------------------------------------------------------------

D. QF Certification Process

    280. In the final rule, the Commission adopted the NOPR proposal to
revise 18 CFR 292.207(a) to allow an interested person or entity to
seek to intervene and to file a protest of a self-certification or
self-recertification of a QF and not have to file a petition for
declaratory order and pay the filing fee for petitions. The Commission
found that any increased administrative burden or litigation risk
imposed by the new rule is justified by the need to ensure that QFs
meet the statutory criteria for QF status.\520\ The Commission stated
that the ability to intervene and to file a protest of a self-
certification or self-recertification of a QF without having to file a
petition for declaratory order and pay the filing fee for petitions is
effective as of the effective date of the final rule.\521\
---------------------------------------------------------------------------

    \520\ Id. P 547.
    \521\ Id. P 548.
---------------------------------------------------------------------------

    281. The Commission agreed with commenters that QF recertifications
to implement or address non-substantive changes should not be subject
to the new protest rule in order to respect QFs' settled expectations.
The Commission therefore found that protests may be filed to an initial
certification (both self-certification and application for Commission
certification) filed on or after the effective date of the final rule,

but only to a recertification (both self-recertification and
application for Commission recertification) that makes substantive
changes to the existing certification and that are filed on or after
the effective date of the final rule. The Commission explained that
substantive changes that may be subject to a protest may include, for
example, a change in electrical generating equipment that increases
power production capacity by the greater of 1 MW or five percent of the
previously certified capacity of the QF or a change in ownership in
which an owner increases its equity interest by at least 10% from the
equity interest previously reported. The Commission found that
recertifications (both self-recertifications and applications for
Commission recertifications) making ``administrative only'' changes
should not be subject to a protest pursuant to the final rule.\522\
---------------------------------------------------------------------------

    \522\ Id. P 550.
---------------------------------------------------------------------------

    282. The Commission disagreed with Solar Energy Industries'
estimates that compliance with these new requirements would require an
additional approximately 90 to 120 hours per year. The Commission noted
that 18 CFR 292.207(d) already stated that, if a QF fails to conform
with any material facts or representations presented in the
certification, the QF status of the facility may no longer be relied
upon; hence, it is long-standing practice that a QF must recertify when
material facts or representations in the Form No. 556 change.\523\
---------------------------------------------------------------------------

    \523\ Id. P 552.
---------------------------------------------------------------------------

    283. The Commission explained that certifications and
recertifications are already subject to protests, albeit in the form of
petitions for declaratory order; therefore, dealing with objections to
a certification or recertification is not new. The Commission stated
that, although the new procedures may result in more protests being
filed than the number of petitions that had been filed, the Commission
believed that the conditions imposed in the final rule will limit the
number of protests filed. The Commission anticipated that most, though
not all, of the protests filed pursuant to the new 18 CFR 292.207(a)
will relate to the new more-than-one-but-less-than-10-miles rebuttable
presumption. The Commission reasoned that such protests will
necessarily be limited because not all certifications and
recertifications will be subject to the new more-than-one-but-less-
than-10-miles rebuttable presumption. The Commission stated that only a
small power production facility seeking QF status that has an
affiliated small power production QF more than one but less than 10
miles away and that uses the same energy resource would be subject to
the rebuttable presumption. The Commission stated that small power
production facilities that do not have affiliated small power
production facilities will not be affected by the new rebuttable
presumption, nor will cogeneration QFs be affected by the new
rebuttable presumption. The Commission reiterated that protests may
only be made to an initial certification (both self-certification and
application for Commission certification) filed on or after the
effective date of the final rule, and only to a recertification (self-
recertification or application for Commission recertification) that
makes substantive changes to the existing certification that is filed
on or after the effective date of the final rule.\524\
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    \524\ Id. P 553.
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    284. The Commission instituted time limits on protests that may be
filed under the final rule. The Commission adopted the NOPR proposal
that interested parties will have 30 days from the date of the filing
of the Form No. 556 (both initial self-certification and self-
recertification) at the Commission to file a protest (without paying a
fee).\525\
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    \525\ Id. P 554.
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    285. The Commission also stated that, even if it indeed takes some
small power production facilities an additional 90 to 120 hours to
comply with the new requirements (which the Commission thought was
unlikely), that was not an unreasonable burden to impose to ensure that
a generating facility that seeks to be a QF is, in fact, entitled to QF
status and is complying with PURPA.\526\
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    \526\ Id. P 556.
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    286. The Commission found that, due to the unique nature of rooftop
solar PV developers, the recertification requirement for PV developers
could be unduly burdensome. Therefore, to lessen the burden on such
developers when recertifying, the Commission permitted rooftop solar PV
developers an alternative option to file their recertification
applications. Rather than require the developer to file for
recertification each time the developer adds or removes a rooftop
facility, the Commission allowed a rooftop solar PV developer to
recertify on a quarterly basis. The Commission stated that the
recertification filing would be due within 45 days after the end of the
calendar quarter. However, if in any quarter a rooftop solar PV
developer either has no changes or only has changes of power production
capacity of 1 MW or less, the Commission stated that the rooftop solar
PV developer would not be required to recertify until it has
accumulated changes greater than 1 MW total over the quarters since its
last filing. Additionally, the Commission stated that rooftop solar PV
developers, like all small power production facilities, will not be
subject to protests when they file recertifications that are
``administrative only'' in nature but would be subject to such protests
when they make substantive changes to the existing certification, as
detailed above.\527\
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    \527\ Id. P 560.
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    287. The Commission limited the ability to file a protest (rather
than a petition for declaratory order, with the accompanying filing
fee) to within 30 days of the date of the filing of the self-
certification or self-recertification. The Commission stated that, if
an interested party would like to contest a self-certification or self-
recertification later than 30 days after the date of its filing, then
the interested party may file a petition for declaratory order with the
accompanying filing fee, just as they could prior to the effective date
of the final rule.\528\
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    \528\ Id. P 563.
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    288. The Commission declined to impose a 60-day deadline after
which a failure of the Commission to rule on the protest would result
in the protest being denied by operation of law. The Commission stated
that self-certification will be effective upon filing and will remain
effective after a protest has been filed, until such time as the
Commission issues an order revoking certification. The Commission
clarified that self-recertifications will likewise remain effective
after a protest has been filed, until such time as the Commission
issues an order revoking recertification.\529\
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    \529\ Id. P 565.
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    289. The Commission noted that the presumption continues to be that
a small power production facility seeking QF status that is located
more than one but less than 10 miles from any affiliated small power
production QFs is at a separate site from those affiliated small power
production QFs, explaining that the Commission was simply making this
presumption rebuttable.\530\
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    \530\ Id. P 567.
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1. Requests for Rehearing
    290. Solar Energy Industries state that the self-certification
process was intended to be ``quick and not unduly burdensome'' \531\ to
avoid the

``complexity, delays, and uncertainties created by a case-by-case
qualification procedure'' that ``would act as an economic disincentive
to owners of smaller facilities.'' \532\ Solar Energy Industries argue
that the new ``[10]-mile rule'' adds unnecessary regulatory burdens on
QFs which will have a chilling effect on the development of QFs that is
directly counter to PURPA's mandate to encourage QF development. Solar
Energy Industries assert that, if the Commission does not reconsider
the rebuttable presumption framework, the self-certification process
will no longer be quick and will become unduly burdensome for all
parties, including the Commission and its staff.\533\
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    \531\ Solar Energy Industries Request for Rehearing and/or
Clarification at 33 (citing Revisions to Form, Procedures, and
Criteria for Certification of Qualifying Facility Status for a Small
Power Production or Cogeneration Facility, Order No. 732, 130 FERC ]
61,214, at P 8 (2010)).
    \532\ Id. at 28 (citing Revised Regulations Governing Small
Power Production and Cogeneration Facilities, Order No. 671, 114
FERC ] 61,102, at P 83, order on reh'g, Order No. 671-A, 115 FERC ]
61,225 (2006)).
    \533\ Id. at 34.
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    291. Public Interest Organizations state that one of the ways that
PURPA directs the Commission to encourage development of small power
production facilities is to prescribe rules exempting them from the
FPA, PUHCA, and state laws and regulations, as necessary to encourage
development.\534\ Public Interest Organizations argue that the final
rule does the opposite by requiring applicants to list in Form No. 556
all ``affiliated small power production QFs using the same energy
resource within one mile,'' as well as ``all affiliated small power
production QFs using the same energy resource whose nearest electrical
generating equipment is less than 10 miles from the electrical
generating equipment of the entity seeking small power production QF
status.\535\ Public Interest Organizations note that multiple
commenters argued that this proposal would impose a significant
burden,\536\ and that the burden is substantial.\537\ Public Interest
Organizations contend that the basis for the Commission's estimate that
the final rule would impose 62 hours of administrative work on every
small power production facility over 1 MW with affiliated facilities
between one and 10 miles away is not clear.\538\ Public Interest
Organizations note that Solar Energy Industries extensively raised and
documented the expected regulatory burden of the new rule, and refer to
Solar Energy Industries' estimate that the new rule would require an
additional 90 to 120 hours per year to comply.\539\
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    \534\ Public Interest Organizations Request for Rehearing at
116.
    \535\ Id.
    \536\ Id. (citing Order No. 872, 172 FERC ] 61,041 at PP 485,
539-42, 577-83).
    \537\ Id. at 127-29.
    \538\ Id. at 117 (citing Order No. 872, 172 FERC ] 61,041 at P
587).
    \539\ Id. at 129 (citing Solar Energy Industries Comments,
Docket No. RM19-15-000, at 52 (Dec. 3, 2019)).
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    292. Public Interest Organizations assert that the Commission's
explanation for establishing its new protest procedure is unreasonable
and unsupported by the record.\540\ Public Interest Organizations note
that the new procedures make it far easier and more likely that an
interested party will challenge certification. Both Public Interest
Organizations and Solar Energy Industries contend that there is no need
for this new procedure because any interested person could file a
petition for declaratory order challenging certification.\541\ Public
Interest Organizations and Solar Energy Industries claim that, if
petitions for declaratory orders have been standing in for protests
until now, they should be able to continue to do so without increasing
the regulatory burden on small power production facilities by adding a
protest option.\542\ Solar Energy Industries add that, while the
current $30,000 \543\ filing fee for petitions for declaratory order is
substantial, it is not nearly as substantial as the increased legal
fees that QFs will now have to bear to seek and defend
certification.\544\
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    \540\ Id. at 122.
    \541\ Id. at 122-23; Solar Energy Industries Request for
Rehearing and/or Clarification at 28.
    \542\ Public Interest Organizations Request for Rehearing at
123.
    \543\ We note that the current filing fee for a petition for
declaratory order is $30,060.
    \544\ Solar Energy Industries Request for Rehearing and/or
Clarification at 28.
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    293. Public Interest Organizations assert that the Commission's new
same site determination is contrary to the congressional intent of
PURPA because it will discourage small power production
facilities.\545\ Public Interest Organizations argue that the
litigation risk created by the possibility that various interested
parties will protest the facility owners' certifications throughout the
life of the project any time there is a change in circumstance will
effectively establish a 10-mile exclusion zone for a developer around
each small power production facility.\546\
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    \545\ Public Interest Organizations Request for Rehearing at
106.
    \546\ Id. at 107, 112.
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    294. Solar Energy Industries claim that the rebuttable presumption
process and procedure will discourage investment in QFs because it
brings a substantially increased litigation risk in each certification
and recertification.\547\ Solar Energy Industries argue that Congress
did not give the Commission authority to undertake a detailed case-
specific review to determine if the facility meets the maximum size
requirements set forth in the statute.\548\ Solar Energy Industries
assert that, by authorizing the Commission to determine whether
facilities are considered to be located at ``the same site,'' Congress
did not intend for the Commission to promulgate regulations that would
stymie the development of QFs by discouraging potential financiers,
investors, and owners from backing such resources.\549\
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    \547\ Solar Energy Industries Request for Rehearing and/or
Clarification at 33.
    \548\ Id.
    \549\ Id. at 26.
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    295. Northwest Coalition asserts that the application of the final
rule's same site determination to existing facilities is arbitrary,
capricious, and not in accordance with law.\550\ Northwest Coalition
argues that the Commission erred by failing to exempt existing
facilities from applicability of the new same site determination for
determining eligibility as a small power production facility.\551\
Northwest Coalition contends that the Commission arbitrarily applied
the new rule to any existing facility that makes any substantive change
to its certification documents with the Commission, causing owners of
facilities financed and constructed in reliance on the former one-mile
rule now to face the risk of decertification almost any time a non-
ministerial change is made, including sale of a relatively minor stake
in ownership of the facility.\552\
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    \550\ Northwest Coalition Request for Rehearing at 6.
    \551\ Id. at 53.
    \552\ Id. at 53-55; see also Public Interest Organizations
Request for Rehearing at 132.
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    296. Northwest Coalition argues that the new rule decreases the
marketability of such facilities and upsets investment-backed
expectations of their owners, who often invest in a portfolio of
resources with the expectation that it can eventually be sold to
another owner.\553\ Northwest Coalition argues that the new rule will
effectively bar the transfer or sale of existing assets that were
lawfully qualified under the one-mile rule but cannot qualify under the
new same site determination because they consist of more than 80 MW of
aggregate capacity within 10 miles.\554\ It asserts that this new
precedent of the Commission upsetting settled

expectations undermines the predictability needed for long-term
investments in generation assets.\555\
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    \553\ Northwest Coalition Request for Rehearing at 55.
    \554\ Id. at 55.
    \555\ Id. at 55.
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    297. Public Interest Organizations argue that the final rule could
lock in old technology because owners of existing facilities will have
an enormous incentive to avoid making changes to their facility to
avoid needing to recertify.\556\ Public Interest Organizations add that
the final rule discourages development of new small power production
facilities within 10 miles of existing facilities because the new
facilities could potentially trigger revocation of certification for
one or more existing facilities.\557\
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    \556\ Public Interest Organizations Request for Rehearing at
115.
    \557\ Id.
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    298. Northwest Coalition and Public Interest Organizations note
that, since 1980, facilities located more than one mile apart enjoyed
certainty that the rules would not result in them being located at the
same site.\558\ Public Interest Organizations argue that the Commission
arbitrarily and unlawfully ignored serious reliance interests because
the Commission did not fully consider it or failed to provide a ``more
detailed justification'' for its decision to not respect acknowledged,
settled expectations in all cases, despite commenters' lengthy
discussion of reliance interest.\559\
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    \558\ Northwest Coalition Request for Rehearing at 53; Public
Interest Organizations Request for Rehearing at 132.
    \559\ Public Interest Organizations Request for Rehearing at 133
(citing FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515
(2009)).
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