In Docket AC20-103, earlier in 2020, the law firm of Locke and Lord filed with FERC a request for FERC to provide guidance on the proper accounting for wind, solar facilities, and other non-hydro renewable resources. FERC denied this request but acknowledged that the industry would benefit from its guidance on the accounting treatment of solar and wind generating assets. To that end, on January 19, 2021, FERC initiated a Notice of Inquiry (NOI) in Docket RM20-19 in which FERC is soliciting input from interested parties to evaluate the need for accounting guidance and to consider creating separate categories of accounts for wind and solar generating assets. First, FERC seeks comments on whether to create new accounts within the Uniform System of Accounts (USofA) for non-hydro renewable energy generating assets, and, if so, how such accounts should be organized. Second, FERC seeks comments on how to modify FERC Form No. 1 to reflect any new accounts. Third, FERC seeks comments on whether to codify the proper accounting treatment of the purchase, generation, and use of renewable energy credits (RECs). Finally, FERC seeks comments on the rate setting implications of these potential accounting and reporting changes. Comments are due in mid-March and responsive comments due mid-April.
 Non-hydro renewable assets, as referred to in this notice, are production assets other than hydroelectric generators such as solar, wind energy, geothermal, biomass, etc., that rely on the heat or motion of the earth or sun’s radiation to produce energy. Specifically, these are denoted as renewable because the power production is based on a fuel source that is not consumed or destroyed by the generation process, such as buried hydrocarbons (coal, oil, natural gas), or the decay of rare irradiated heavy metals (nuclear). Biomass (trees, nut shells, grain husks and stalks, etc.) is considered renewable, despite its hydrocarbon source being consumed, due to its carbon release being offset by regrowth of carbon capturing equivalent biomass.
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Dr. Paul Dumais
CEO of Dumais Consulting with expertise in FERC regulatory matters, including transmission formula rates, reactive power and more.