On February 19, 2026, the Federal Energy Regulatory Commission clarified that project companies must file prompt ownership information to retain their status as Qualifying Facilities or be subject to potential refund liability. The Commission’s order also implies that project companies with inaccurate or incomplete FERC Form No. 556 data — and thereby, indirectly, the entities acquiring them — might face refund exposure.
Under the Public Utility Regulatory Policies Act (PURPA), Qualifying Facilities (QFs) are either small power production facilities (i.e., renewable generation with a cap of 80 MW) or cogeneration facilities (producing both electricity and heat or steam). To be deemed a QF, companies must file a FERC Form No. 556 for projects exceeding 1 MW in size. When submitting a FERC Form No. 556, applicants must furnish a list of all direct and indirect (upstream) owners of 10 percent equity or more; if the direct owner is an electric utility or holding company, the form must contain the exact percentage of equity ownership interest.
The Federal Energy Regulatory Commission (FERC or Commission) considers any change in ownership interests to constitute a “material change.” For nearly two decades, however, from the Energy Policy Act of 2005 through 2022, the Commission did not act to revoke QF certification in the instance of untimely ownership updates in FERC Form No. 556 submissions. However, in March 2022, the Commission issued an order in Irradiant Partners, LP, stating that “[h]aving current and accurate information on file … via an updated Form No. 556 is necessary for a facility to obtain and to continue to maintain its QF status.”1 In the Irradiant order, the Commission did not specify a certain timeframe by which applicants are required to file recertifications after a “material change” in ownership, although it has been an (informal) expectation that the threshold is within 30 days of a transaction closing.
Under the order issued last week in Branch Street Solar Partners, LLC et al.,2 FERC held that a facility “may no longer rely” upon a QF self-certification once a change in the material facts underlying the application has occurred, such as a change in control, if the facility is making wholesale sales of power.3 The underlying proceeding involves several solar projects indirectly acquired in 2019 and 2020, respectively. Due to various administrative oversights and delays, the upstream ownership information within each of the QF certifications were not updated on a timely basis, with delays ranging from six months late to nearly one year. Eventually, the project companies filed voluntary refund reports in late 2024 but contended that the failure to update their forms was not tantamount to failure in meeting the requirements of a QF.
In an order issued in June 2025, the Commission rejected that premise, holding that ownership information must be updated promptly. Further, it held that project companies must pay refunds “for the time period between when the material change occurs and when recertification is filed” if they make jurisdictional wholesale sales in that time.4 On rehearing, issued February 2026, the Commission affirmed its finding, explaining that facilities must update their ownership information at the point when a change occurs:
In an order issued in June 2025, the Commission rejected that premise, holding that ownership information must be updated promptly. Further, it held that project companies must pay refunds “for the time period between when the material change occurs and when recertification is filed” if they make jurisdictional wholesale sales in that time. On rehearing, issued February 2026, the Commission affirmed its finding, explaining that facilities must update their ownership information at the point when a change occurs:
“[W]hen a facility no longer conforms to the material facts or representations presented … in the initial certification, the notice of self-certification may no longer be relied upon, and at that point the owner of the facility must file a notice of self-recertification of qualifying status if the facility wishes to remain a QF.”5
Further, the Commission instructed the project companies to calculate time-value refunds for the revenues collected during the lapse periods, as during those periods the project companies sold power at wholesale without the waiver from FPA section 205 given to QFs under 20 MW (and did not hold market-based rate authority since they relied on the waiver). The Commission continued to find that “any wholesale sales made without prior authorization under FPA section 205, including for failure to comply with the requirement to certify, and recertify, as a QF, the Commission uses the same methodology under section 35.19a of the Commission’s regulations to calculate refunds owed.”6
This order appears to require companies with existing QF certifications to file updated ownership disclosures that represent a “material change” according to the Commission almost immediately upon the transaction closing. Since the Commission found here that “QF status could not be relied upon during the … time period between when the change in ownership occurred and when each Facility’s self-recertification was filed,”7 facilities must file self-recertifications almost immediately following closing to avoid any period in which they cannot rely upon the QF status due to changed circumstances. In essence, FERC appears to have eliminated the previously-honored informal 30-day time period for filing updates to QF self-certifications following a change in material circumstances. Further, FERC found that companies are liable for refunds from the time a change occurred until the self-recertification is filed.
Project companies and their upstream owners must mitigate at least three risks as a result of this order. First, project companies must timely and accurately file recertifications following material changes, including changes in ownership, or be exposed to refunds. Second, upstream owners must carefully diligence the representations made in each project company’s FERC Form No. 556 to ensure that a project company does not carry refund exposure for inaccurate representations made in prior filings. Third, upstream owners and investors in upstream owners of project companies must be aware of when they have been identified in a QF self-certification and proactively consider when reorganizations or changes in their upstream investment structure may require updated recertifications at the project company level. While we primarily focus on ownership changes in this alert, any material changes to the facts represented in a FERC Form No. 556 may trigger similar risks and need for recertification. Such changes could include modification to the physical attributes of a cogeneration facility, the repowering of a wind facility, changes in the size of a solar facility under development, and similar material changes beyond ownership.
1 Irradiant Partners, LP, 178 FERC ¶ 61,215 at P 10 (2022).
2 Branch Street Solar Partners, LLC, et al., 191 FERC ¶ 61,223 (2025), order on reh’g, 194 FERC ¶ 61,124 (2026).
3 Id., 194 FERC at P 33, 41.
4 Id., 191 FERC at P 12.
5 Id., 194 FERC at P 61.
6 Id., 194 FERC at P 61.
7 Id. at P 15.
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