New Charleston Power I, L.P. v. F.E.R.C., No. 94-1330

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: RANDOLPH
• Citation: 56 F.3d 1430
• Parties: , Util. L. Rep. P 14,046 NEW CHARLESTON POWER I, L.P., Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Public Utilities Commission of the State of California, and Southern California Edison Company, Intervenors.
• Docket Number: No. 94-1330
• Decision Date: 16 June 1995

Page 1430

56 F.3d 1430 312 U.S.App.D.C. 360, Util. L. Rep. P 14,046 NEW CHARLESTON POWER I, L.P., Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Public Utilities Commission of the State of California, and
Southern California Edison Company, Intervenors. No. 94-1330. United States Court of Appeals,
District of Columbia Circuit. Argued April 17, 1995.
Decided June 16, 1995.

Page 1431

Petition for Review of Orders of the Federal Energy Regulatory Commission.

Carol A. Smoots, Washington, DC, argued the cause, for petitioner. With her on the briefs, was Stephen L. Teichler, Washington, DC.

Samuel Soopper, Atty., F.E.R.C., Washington, DC, argued the cause, for respondent. With him on the brief were Jerome M. Feit, Sol., and Joseph S. Davies, Jr., Deputy Sol., F.E.R.C., Washington, DC.

Edward W. O'Neill, San Francisco, CA, Richard K. Durant, Rosemead, CA, and Joseph E. Stubbs, Washington, DC, were on the brief, for intervenors.

Before: SILBERMAN, HENDERSON, and RANDOLPH, Circuit Judges.

Opinion for the court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

Should rain-soaked cow manure be treated like a volcanic eruption in the Philippines or, instead, like a golf ball that knocks out a high-voltage transformer? Odd as it may seem, that is one of the contested points in this strange case.

The case arises under legislation described as "the solution that won't die for the problem that did." Jeff Bailey, 'Purpa' Power, WALL ST. J., May 17, 1995, at A1. Whether that accurately portrays Sec. 210(a) of the Public Utilities Regulatory Policies Act of 1978 (PURPA), Pub.L. No. 95-617, 92 Stat. 3117 (codified at 16 U.S.C. Sec. 824a-3), is not our concern. The "problem," as the 1978 Congress foresaw it, was the high price of oil climbing ever higher and the country growing ever more dependent on foreign oil suppliers. A "solution," Congress thought, was to encourage alternative sources of electricity from "small power production facilities" in the hope of diminishing the demand for fossil fuels. FERC v. Mississippi, 456 U.S. 742, 750, 102 S.Ct. 2126, 2132, 72 L.Ed.2d 532 (1982). In PURPA terminology, "small power

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production facilities" are those with a capacity of less than 80 megawatts, producing electricity by using, as their "primary energy source, ... biomass, waste, renewable resources, geothermal resources, or any combination thereof," 16 U.S.C. Sec. 796(17)(A)(i). Congress directed the Federal Energy Regulatory Commission to set down rules requiring electric utilities to purchase electricity from qualifying facilities--"QFs," 16 U.S.C. Sec. 824a-3(a). With the QFs receiving this and other favorable treatment, PURPA spawned a new industry. Small power plants using windmills, or methane from landfills, or solar energy sprang up around the country.

An unusual, indeed unique, method of producing electricity from other than fossil fuels is at the center of the present dispute. In 1988, at a cost of $49 million, the 15 megawatt-capacity Mesquite Lake Facility in El Centro, California, came on line as a QF, designed to burn cattle manure to generate electricity for sale to Southern California Edison Company. Despite a steady supply of fuel from the farms and feedlots in the surrounding Imperial Valley (when running, the Facility burned 40 tons of manure an hour), the Facility ran into immediate operational difficulties. Furnaces failed, boiler tubes corroded, refractory ceiling bricks collapsed, equipment fouled. Incomplete combustion caused the Facility to exceed the level of carbon monoxide emissions allowed under its air permit. During 1989 and 1990, the Facility shut down for months at a time while repairs were made. Another partial shutdown occurred in 1992.

In February 1993, New Charleston Power I, L.P., the petitioner here, purchased the Mesquite Lake Facility and began repairing and redesigning it. By April, the refurbished Facility was ready for a test run. Once again the machinery sputtered as the old problem of boiler fouling reoccurred and new problems in handling ash arose. Petitioner blamed some of this on record-setting winter rains in the...