Renewable Energy: Can States Influence Federal Power Act Prices Without Being Preempted?

States enacting renewable-purchase obligations for their retail electricity sellers want to influence the price paid to producers.  Their efforts are both assisted and constrained by two federal statutes:  the Public Utility Regulatory Policies Act of 1978 (PURPA) and the Federal Power Act of 1935 (FPA).  One important constraint is FERC’s precedent that the FPA preempts a state from ordering its utility to offer to buy power at a state-set price.  An offer is only an offer; it does not set the wholesale price.  Only the seller’s acceptance, and FERC’s approval of the resulting contract, will set a price.  If FERC can correct this precedent, states will have more ways to fashion renewable solutions within their desired cost levels.