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Exempt Wholesale Generator
Practical Law Glossary Item 7-519-3716 (Approx. 3 pages)
Glossary
Exempt Wholesale Generator
Created under the Energy Policy Act of 1992, these are independent power producers (IPP) that qualify for exemption from regulation under the Public Utility Holding Company Act of 1935 and, after its repeal under the Energy Policy Act of 2005, the Public Utility Holding Company Act of 2005 (PUHCA). EWG status is determined by the Federal Energy Regulatory Commission (FERC). EWG status is available to any IPP, regardless of size provided certain conditions are met.
To qualify as an EWG, an IPP must:
- Be exclusively engaged in the business of owning and/or operating generation facilities. To ensure that the IPP qualifies as an EWG, project developers typically establish a special purpose vehicle to own the generation facility and sell the electricity it generates.
- Sell electricity solely to wholesale customers. However, before an EWG can make wholesale sales of electricity at market rates it must obtain an authorization (a Market-Based Rate Authorization) from FERC.
- Comply with restrictions as to the types of transactions in which it can engage.
For more information on EWGs, see Practice Note, Understanding Renewable Energy: Solar.