A federal court rejected Southern California Edison's effort to change a Federal Energy Regulatory Commission decision on qualifying facilities (QFs). On March 24, the D.C. Court of Appeals denied the utility's petition to review Ormesa LLC's geothermal power sales. Edison still believes that "the underlying FERC decision was improper," spokesperson Gil Alexander said. The utility is reviewing its options for fighting the ruling, he added, without elaborating. The utility and the QF are tussling over whether nearly 5 MW of geothermal power qualifies for premium "avoided cost" rates, rather than the lower market power price. The difference is between what the utility and the owner consider the plant's net output - the electricity produced in excess of the power needed to operate the plant. "Avoided cost" is a price formula set up for utilities to pay third-party power providers based on what utilities would otherwise pay for their own, natural gas-fired power plant output. Alexander declined to discuss the amounts involved. Edison prefers "to keep confidential the actual dollar amount because we purchase power for customers in a competitive marketplace," he said. Ormesa officials were not available for comment on the court decision. Under the federal Public Utility Regulatory Policies Act of 1978, the owner of a QF gets the avoided-cost rate for the plant's net output as certified by FERC. Originally certified as a QF in 1986, Ormesa is a 20 MW (gross capacity) geothermal facility in Imperial County owned by Ormat Technologies. Applying for recertification as a QF in February 2004, Ormesa wanted 16.57 MW of its capacity to qualify for sale to Edison at avoided cost. The utility, however, calculated the plant's net output at 11.98 MW. The court said FERC "agreed in part with each party" and calculated Ormesa's net output at 15.22 MW in the commission's April 2004 order granting recertification, That decision included a footnote granting Ormesa permission to sell an additional 1.35 MW without imperiling the plant's QF status. This raised allowed sales at avoided-cost rates to the 16.57 MW originally sought by Ormat. Both companies requested a rehearing, which FERC denied in September 2004, triggering Edison's petition for court review. That petition argued that the commission acted arbitrarily and capriciously by permitting Ormesa to sell capacity in excess of its net output and in calculating the net output in the first place. Utilities are challenging avoided-cost payments in current hearings at the California Public Utilities Commission (Circuit, March 3, 2006).