In a potentially significant win for green energy production projects in California and the Western U.S., a federal appeals court has found that a California Public Utilities Commission program for determining when to award electric power contracts to alternative generators is preempted by federal law.

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit on Monday found that the CPUC’s program was preempted by the federal Public Utility Regulatory Policies Act of 1978, which requires that electric utilities buy all power produced by alternative energy generators known as Qualifying Cogeneration Facilities, or QFs.