Cogeneration Rules - apscservices.info

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ADMINISTRATIVE HISTORY

o f the

COGENERATION RULES

Docket - Date Or. No. Subject Matter of Docket/Order

81 -071 -F 02-1 8-83 7 Creation, adoption, and promulgation of the Coqeneration Rules.

81 -071 -F 06-1 5-83 8 Publication of Coqeneration Rules on 8 x 1 1 inch paper, i n c l u d i n g change t o Section 3.4 ( b ) ( 6 ) .

AH-1 Cogeneration Rules

TABLE OF CONTENTS

o f t he

COGENERATION RULES

SECTION 1 . GENERAL PROVISIONS ..................................... 1-1

1.1 General r u l e and d e f i n i t i o n s ...................... 1-1 General r u l e ................................. 1-1 D e f i n i t i o n s .................................. 1-1

SECTION 2 . QUALIFYING COGENERATION AND SMALL POWER PRODUCTION FACILITIES ............................................. 2-1

2.1 Scope ............................................. 2-1

2.2 D e f i n i t i o n s ....................................... 2-1

2.3 General Requirements f o r Q u a l i f i c a t i o n ............ 2-3 Sma l l power product ion f a c i l i t i e s ............ 2-3 [i] Cogeneration f a c i l i t i e s ...................... 2-3

2.4 C r i t e r i a f o r Q u a l i f y i n g Small Power Product ion F a c i l i t i e s ........................................ 2-3 (a) S ize of t h e f a c i l i t y ......................... 2-3

2.5 C r i t e r i a For Q u a l i f y i n g Cogeneration F a c i l i t i e s ... 2-4

cyc le f ac i 1 i t i e s ............................. 2-4 E f f i c i e n c y standards f o r bottoming-cycle f a - c i l i t i e s ..................................... 2-5

(c) Waiver o f c r i t e r i a ........................... 2-5

(b) Fuel use ..................................... 2-4

. . . (a) Operating e f f i c i e n c y standards f o r topping-

(b)

2.6 Ownership C r i t e r i a ................................ 2-5

b Ownership t e s t ............................... 2-6 (a) General r u l e ................................. 2-5

IC] Exceptions ................................... 2-6

2.7 Procedures f o r Obtaining Q u a l i f y i n g Status ........ 2-6

(b) Opt ional screening procedure by e l e c t r i c u t i l - j t i e s ........................................ 2-6 Opt ional c e r t i f i c a t i o n procedure ............. 2-7 Revocation o f q u a l i f y i n g s ta tus .............. 2-8

(a) Q u a l i f i c a t i o n ................................ 2-6

TC-1 Cogeneration Rules

SECTION 3 ARRANGEMENTS BETWEEN UTILITIES AND QUALIFYING COGENERATORS AND SMALL POWER PRODUCTION FACILITIES .................. 3-1

3.1 Scope ............................................. 3-1 (a) App1 i c a b i 1 i ty ................................ 3-1 (b) Case-by-case negot ia t ions .................... 3-1 (c) Negotiated r a t e s o r t e n s .................... 3-7

(b) General Rule ................................. 3-2

3.2 A v a i l a b i l i t y o f E l e c t r i c U t i l i t y System Cost Data . 3-2 (a) A p p l i c a b i l i t y ................................ 3-2

( c ) Addi t ional data requested by q u a l i f y i n g f a c i l - i t i e s ........................................ 3-3

( d ) F i l i n g t h e t e n s of agreements between u t i l i - t i e s and f a c i l i t i e s .......................... 3-3

(e) h i s s i o n review ............................ 3-3

3.3 E l e c t r i c U t i l i t y Obl igat ions ...................... 3-3

(c) Ob l i ga t i on t o interconnect .................... 3-4

(e) Para1 l e 1 operat ion ........................... 3-4

(a) Ob l i ga t i on t o purchase from q u a l i f y i n g f a c i l i - t i e s ......................................... 3-3

(b) Ob l i ga t i on t o s e l l t o q u a l i f y i n g f a c i l i t i e s .. 3-3

( d ) Transmission t o o the r e l e c t r i c u t i l i t i e s ..... 3-4

3.4 Rates f o r Purchases ............................... 3-5 Rates f o r ~ u r c h a s e s .......................... 3-5 [E] Relat ionship t o avoided costs ................ 3-5 Standard ra tes f o r purchases ................. 3-6 Purchases "as ava i l ab le " o r pursuant t o a le-

(e) !actors a f f e c t i n g r a t e s f o r purchases ........ 3-7 (f) Periods dur ing which purchases are not re -

quired ....................................... 3-8

a l l y enforceable o b l i g a t i o n ................. 3-6

3.5 Rates f o r Sales ................................... 3-9 (a) General r u l e s ................................ 3-9 (b) Addi t ional services t o be provided t o qual i fy -

i n g f a c i l i t i e s ............................... 3-9 (c) Rates f o r sales o f back-up and maintenance

power ........................................ 3-9

3.6 Interconnect ion Costs ............................. 3-10 Obl iga t i on t o pay ............................ 3-10 Reimbursement o f in terconnect ion costs ....... 3-10

3.7 System Emergencies ................................ 3-10 (a) Qua l i f y i ng f a c i l i t i e s ' o b l i g a t i o n t o prov ide

3-10 (b) [ iscontinuance o f purchases and sales dur ing

system emergencies ........................... 3-70

ower dur ing system emergencies ..............


3.0 Standards for Operating Reliability ............... 3-11 (a) Interconnection plan ......................... 3-11

Inspection ................................... 3-11 [c"{ Provision of equipment and safety ............ 3-11 ht of refusal to connect .................. 3-12 erconnection switch ....................... 3-12

(f) Operating procedures ......................... 3-12

SECTION 4. PROCEDURES FOR THE CONDUCT OF NEGOTIATIONS BETWEEN ELEC- TRIC UTILITIES AND QUALIFYING COGENERATION AND SMALL POW- ER PRODUCTION FACILITIES: PROCEDURES FOR APPEAL TO THE ARKANSAS PUBLIC SERVICE COMMISSION ..................... 4-1

4.1 Procedures for Negotiation ........................ 4-1 Applicability ................................ 4-1 General rule ................................. 4-1

4.2 Procedures for Appeal ............................. 4-2 (a) Applicability ................................ 4-2 (b) General rule .................................. 4-3

SECTION 5 . COMMISSION JURISDICTION ................................ 5-1

5.1 Exemption of Qualifying Facilities from all other Arkansas Utility Regulation ....................... 5-1

5.2 Application for Commission Judgment on Jurisdic- ti on .............................................. 5-1

5.3 Exemption from Comnission Jurisdiction ............ 5-1

SECTION 6 . RECOVERY OF COSTS OF PURCHASES FROM A QUALIFYING FACIL- ITY BY AN ELECTRIC UTILITY ............................. 6-1


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SECTION 1

GENERAL PROVISIONS

. . - GENERAL RULE AND DEFINITIONS General Rule.

Terms defined in the Public Utility Regulatory Policies Act of 1978 (PURPA) shall have the same meaning for purposes of these regulations as they have under PURPA, unless further defined.

Def i ni ti ons . The following definitions apply for purposes of these regulations:

IIQualifying facility" means a cogeneration facility or a small power production facility that is a qualifying facility under Section 2 of the Cogeneration Rules.

"Purchase" means the purchase of electric energy or capacity or both from a qualifying facility by an electric utility.

5ale" means the sale of electric energy or capacity or both by an electric utility to a qualifying facility.

9ystem emergency" means a condition on a utility's system that is likely to result in imninent s i nificant

to endanger life or property. disruption of service to customers or is imminent 3 y likely "Rate" means any price, rate, charge, or classification made, demanded, observed, o r received with respect to the sale or purchase of electric energy or capacity, or any rule, regulation, or practice respecting any such rate, charge, or classification, and any contract pertaining to the sale or purchase of electric energy or capacity.

"Avoided costs" means the incremental costs to an electric utility of electric energy or capacity or both that, but for the purchase from the qualifying facility or qualifying facilities, such utility would generate itself or purchase from another source.

"Interconnection costs" means the reasonable costs of connection, swi tchi ng, metering, transmission,

1-1 Cogeneration Rules

d i s t r i b u t i o n , sa fe ty provis ions, and admin i s t ra t i ve costs i ncu r red by t h e e l e c t r i c u t i l i t y d i r e c t l y r e l a t e d t o the i n s t a l l a t i o n and -maintenance o f t he phys ica l f a c i l i t i e s necessary t o permi t interconnected operations.

(8) "Supplementary power" means e l e c t r i c energy o r capaci ty r e g u l a r l y suppl ied by an e l e c t r i c u t i l i t y t o a qua l i f y i ng f a c i l i t y f o r r e g u l a r use i n a d d i t i o n t o the energy t h a t t he f a c i l i t y generates i t s e l f .

''Back-up power" means e l e c t r i c energy o r capaci ty supplied by an e l e c t r i c u t i l i t y dur ing an unscheduled outage o f a qual i f y i ng f a c i 1 i ty t o rep 1 ace energy o r d i n a r i l y generated by t h e f a c i l i t y ' s own generat ion equipment.

(9)

(10) I n t e r r u p t i b l e power" means e l e c t r i c energy o r capaci ty suppl ied by an e l e c t r i c u t i l i t y t h a t i s subject t o i n t e r r u p t i o n by t h e e l e c t r i c u t i l i t y under spec i f i ed condi t ions.

(11) 'Maintenance power" means e l e c t r i c energy o r capacl ty suppl ied by an e l e c t r i c u t i l i t y du r ing scheduled outages o f t he q u a l i f y i n g f a c i l i t y .

(12) "Case-by-case nego t ia t i on " means t h e process o f sequent ia l nego t ia t i on o f s p e c i f i c cont ractual agreements between a q u a l i f y i n g f a c i l i t y and an e l e c t r i c u t i l i t y .

(13) "Capacity" means the load f o r which a generating u n i t o r generat ing s t a t i o n i s ra ted e i t h e r by t h e user o r t he manufacturer.

(14) *Power' means t h e t ime r a t e o f generating, t rans fe r r i ng , o r using, e l e c t r i c energy, u s u a l l y expressed i n k i l owa t t s .

( 15) "Fi rm Power" means power o r power-product ng capaci ty in tended t o be a v a i l a b l e a t a l l times during t h e p e r i o d covered by a commitment, even under severe condit ions."

(16) * F i n Energy" means e l e c t r i c energy associated w i th f i rm power.

(17) 'Dispatch' means under the operat ing c o n t r o l o f an i n teg ra ted e l e c t r i c system dispatcher. This inc ludes the scheduling o f energy t ransact ions wi th connecting e l e c t r i c u t i l i t i e s or o the r connecting e l e c t r i c generat ing sources."

"System Dispatcher' means t h e i n d i v i d u a l who i s i n charge o f t h e organizat ional u n i t whose f u n c t i o n i t i s t o match t h e u t i l i t y ' s s'ystem generat ion t o t h e demand o r load

(18)

b

. 1 -2 Cogeneration Rules

requirements of the utility's customers ana others subject toea number o f constraints, including, but not limited to the following: ( a ) the availability and cost of fuel; (b] the availability o f transmission capability; (c) the balancing of generation for system reliability; (d) the economy o f purchased power; (e) the economy o f power sales with in and outside of the system.

(19) "Telemetering" means the system of metering and communications devices that enables the system dispatcher to instantaneously monitor (or, in the case of two way communications, to control) the output of a remote generating unit.

Vommissionu means the Arkansas Public Service Commission. (20)


SECTION 2

QUALIFYING COGENERATION AND SMALL POWER PRODUCTION FACILITIES

SECTION 2.1 - SCOPE:

Section 2 applies t o the c r i t e r i a fo r , and the manner of, becoming a qualifying small power production f a c i l i t y and a qualifying cogeneration f a c i l i t y under Sections 3 (17) ( C ) and 3 (18) (B), respectively, of the Federal Power Act, as amended by Section 201 o f the Pub l i c Ut i l i ty Regulatory Pol ic ies Act of 1978 (PURPA).

SECTION 2.2 - DEFINITIONS:

For purposes of this subsection:

yBiomassll means any organic material not derived from f o s s i l fuels.

"Waste" means by-product materials other than biomass.

"Cogeneration fac i 1 i t y " means equipment used t o produce electric energy and forms of useful thermal energy (such as heat o r steam), used f o r industr ia l , commercial, heating, or cooling purposes, through the sequential use of energy.

'Topping-cycle cogeneration f a c i l i t y " means a cogeneration f a c i l i t y i n which the energy i n p u t t o the f a c i l i t y i s f irst used t o produce useful power output, and the re jec t heat from power production is t h e n used t o provide useful thermal energy.

"Bottoming-cycle cogeneration fac i l i t y " means a cogeneration facility in which the energy input t o the system is f i r s t app l i ed t o a useful thermal energy process, and the r e j ec t heat emerging from the process is then used f o r power production.

"Supplementary f i r i ng" means an energy i n p u t t o the cogeneration f a c i l i t y used only i n the thermal process of a topping-cycle cogeneration f a c i l i t y , o r only i n the e l e c t r i c generation process of a bottomi ng-cycle cogeneration f aci 1 i ty .

"Useful power output" of a Cogeneration f aci 1 Sty means the electric o r mechanical energy made available f o r use, exclusive of any such energy used i n the power production process.

"Useful thermal energy output" of a topping-cycle cogeneration


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f a c i l i t y means t h e thermal energy made a v a i l a b l e f o r use i n any i n d u s t r i a l o r c o m e r c i a l process, o r used i n any heat ing o r cool i ng appl icat ion.

(i) "Total energy output" o f a topping-cycle cogeneration f a c i l i t y i s t h e sum o f t he useful power output and use fu l thermal energy output .

(j) "Total energy i npu t " means the t o t a l energy of a l l forms suppl ied from external sources.

( k ) "Natural gas" means e i t h e r unmixed na tu ra l gas, o r any mixture of na tu ra l gas and a r t i f i c i a l gas.

(1) 'lOi1" means crude o i l , r es idua l f u e l o i l , n a t u r a l gas l i qu ids , o r any r e f i n e d petroleum products.

(m) "Energy input", i n the case o f energy i n t h e form o f natura l gas o r o i l , i s t o be measured by the lower heat ing value o f t he na tu ra l gas or o i l .

(n) " E l e c t r i c u t i l i t y ho ld ing company" means a hold ing company, as defined i n Sect ion 2 (a ) (7) o f t he Publ ic U t i l i t y Holding Company Act o f 1935, 15 U.S.C. Sect ion 79 b (a ) (7 ) , which owns one o r more e l e c t r i c u t i l i t i e s , as def ined i n Sect ion 2 (a) (3) of Act, 15 U.S.C. Sect ion 79 b (a) ( 3 ) , bu t does not inc lude any hold ing company which i s . exempt by r u l e s o r orders adopted o r issued pursuant t o Sect ion 3 (a) (3) o r 3 (a ) ( 5 ) o f t he Publ ic U t i l i t y Holding Company Act o f 1935, 15 U.S.C. Sect ion 79 c (a ) (5).

( 0 ) "Ut i l i ty geothermal small power product ion f a c i l i t y " means a small power product ion f a c i l i t y t h a t uses geothermal energy as the pr imary energy resource and o f which more than 50 percent i s owned e i the r :

(1) By an e l e c t r i c u t i l t i y o r u t i l i t i e s , e l e c t r i c u t i l i t y ho ld ing company o r companies, or any combination thereof; o r

(2) By any company 50 percent o r more o f t he outstanding vo t i ng s e c u r i t i e s of which are d i r e c t l y o r i n d i r e c t l y owned, contro l led, o r he ld wi th power t o vote by an e l e c t r i c u t i l i t y , e l e c t r i c u t i l i t y ho ld ing company, o r any combination therof .

2-2 Cogenerati on Rules

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SECTION 2.3 - GENERAL REQUIREMENTS FOR QUALIFICATION: (a) Small power product ion f a c i l i t i e s .

A small power product ion f a c i l i t y i s a q u a l i f y i n g f a c i l i t y if it:

(1) Meets the maximum s i z e c r i t e r i a s p e c i f i e d i n Sect ion

(2) Meets t h e f u e l use c r i t e r i a spec i f i ed i n Sect ion 2 .4 (b ) ;

2.4( a) ;

and

(3) Meets the ownership c r i t e r i a spec i f i ed i n Sect ion 2.6.

(b) Coqeneration f ac i 1 i t i e s .

A cogeneration f a c i l i t y , i n c l u d i n g any d i e s e l and dual f u e l cogeneration f a c i l i t y , i s a q u a l i f y i n g f a c i l i t y i f it:

(1) Meets any appl icable operat ing and e f f i c i e n c y standards s p e c i f i e d i n Sect ion 2.5(a) and (b); and

(2) Meets t h e ownership c r i t e r i a spec i f i ed i n Sect ion 2.6.

SECTION 2.4 - CRITERIA FOR QUALIFYING SMALL POWER PRODUCTION FACILITIES: (a) Size o f t h e f a c i l i t y .

(1) Maximum size.

The power product ion capaci ty o f the f a c i l i t y f o r which q u a l i f i c a t i o n i s sought, t o e the r wi th t h e capaci ty o f any

owned by t h e same person, and are located a t t h e same s i te , may no t exceed 80 megawatts.

o t h e r f a c i l i t i e s t h a t use P he same energy resources, are

(2) Method o f ca l cu la t i on .

(i) For purposes o f t h i s paragraph, f a c i l i t i e s are considered t o be located a t t he same s i t e as t h e f a c i l i t y f o r which q u a l i f i c a t i o n i s sought i f they are located w i t h i n one m i l e o f t he f a c i l i t f o r which

f a c i l i t i e s , i f they use water f rom the same impoundment f o r power generation.

q u a l i f i c a t i o n i s sought, and f o r hy 2 r o - e l e c t r i c


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(ii) For purposes of making the determinat ion i n clause (i), t h e distance between f a c i l i t i e s shal l be measured from t h e e l e c t r i c a l generating equipment o f a f a c i l i t y .

(3) The APSC may modify t h e a p p l i c a t i o n o f subparagraph (2) f o r good cause.

(b) Fuel use.

(i) The pr imary energy source o f t he f a c i l i t y must be biomass, waste, renewable resources, geothermal resources, o r any combination thereof, and more than 75 percent of t h e t o t a l energy i n p u t must be from these sources.

(ii) Any pr imary energy source that , on the basis o f i t s energy content, i s 50 percent o r more biomass s h a l l be considered biomass.

(2) Use of o i l , n a t u r a l gas, and coal by a f a c i l i t y may not, i n the aggregate, exceed 25 percent of t he t o t a l energy i n p u t o f t he f a c i . l i t y dur ing any calendar year period.

SECTION 2.5 - CRITERIA FOR QUALIFYING COGENERATION FACILITIES:

(a) Operating and ef f ic iency standards f o r toppinq-cyc le f a c i l i t i e s .

(1) Operating standard.

For any topping-cycle cogeneration f a c i l i t y , t he usefu l thermal energy output of t he f a c i l i t y must, dur ing any calendar year period, be no less than 5 percent o f t he t o t a l energy output.

(2) E f f i c i ency standard.

(i) For any topping-cycle cogeneration f a c i l i t y f o r which t h e energy input, except f o r emergency o r s tar t -up uses, i s na tu ra l gas o r o i l , and t h e i n s t a l l a t i o n o f which began on o r a f t e r March 13, 1980 the use fu l power output o f the f a c i l i t y p l u s one-half t he usefu l thermal energy output, du r ing any calendar year period, must:


(A) Subject t o paragraph ( a ) ( 2 ) ( i ) ( B ) of t h i s section, be no l ess than 42.5 percent of the t o t a l energy i npu t o f na tu ra l gas and o i l t o the f a c i l i t y ; o r

(8) If the use fu l thermal energy output i s l ess than 15 percent o f t h e t o t a l energy output of the f a c i l i t y , be no l ess than 45 percent of the t o t a l energy i n p u t o f na tu ra l gas and oil t o the f ac i 1 i ty .

(ii) For any topping-cycle cogeneration f a c i l i t y not subject t o Paragraph ( a ) ( 2 ) ( i ) o f t h i s section, t he re i s no e f f i c i e n c y standard.

( b) Ef f i c i ency s t and ard s f o r bot tomi ng -cyc 1 e f ac i 1 i t i es . (1) For any bottoming-cycle cogeneration f a c i l i t y f o r which

any o f t he energy i n p u t as supplementary f i r i n g i s na tu ra l gas o r o i l , and the i n s t a l l a t i o n o f which began on or a f t e r March 13, 1980, t h e use fu l power output o f the f a c i l i t y must, dur ing any calendar year period, be no l ess than 45 percent of t h e energy i npu t of na tu ra l gas and o i l f o r sup p 1 m e n t ary f i r i ng .

(2) For any bottoming-cycle cogeneration f a c i l i t y no t covered by subparagraph (1) o f t h i s paragraph, there i s no eff i c l e n c y standard.

( C) Wai ver o f c r i t e r i a.

The Commission may waive any o f t h e requirements o f paragraphs (a) and (b) o f t h i s subsection upon a showing t h a t t h e f a c i l i t y w i 11 produce s i g n i f i c a n t energy savings.

SECTION 2.6 - OWNERSHIP CRITERIA:

(a) General ru le . - A cogeneration f a c i l i t y or small power product ion f a c i l i t y may not be owned by a person p r i m a r i l y engaged i n the generation o r sa le o f e l e c t r i c ower (o ther than e l e c t r i c power s o l e l y from cogeneration f a c t 1 P t i e s or small power product ion f a c i l i t i e s ) .


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Ownership test . For purposes of this section, a cogeneration or small power production facility shall be considered to be owned by a person primariJy engaged in the generation o r sale of electric power, if more than 50 percent of the equity interest in the facility is held by an electric utility or utilities, or by an electric utility holding company or companies, or any combination thereof. If a wholly or partially owned subsidiary o f an electric utility holding company has an ownership interest o f a facility, the subsidiary's ownership interest shall be considered as ownership by an electric utility or electric utility holding company.

(c) Exceptions.

For purposes of this section, a company shall not be consiaered to be an "electric utility" company if it:

(1) Is a subsidiary o f an electric utility holding company that is exempt by rule or order adopted o r issued pursuant to Section 3(a)(3) or 3(a)(5) of the Public Utility Holding Company Act of 1935, 15 U.S.C'. 79c(a)(3), 79c(a)(5); or

Is declared not to be an electric utility company by rule or order of the Securities and Exchange Comnission pursuant to Section 2(a)(3)(A) of the Public Utility Holding Company Act of 1935, 15 U.S.C. 79b(a)(3)(A).

(2)

SECTION 2.7 - PROCEDURES FOR OBTAINING QUALIFYING STATUS: (a) Qualification.

A small power production facility or cogeneration facility that meets the criteria for qualification set forth in Section 2.3 is a qualifying facility, ipso - facto.

(b) Optional screeninq procedure by electric utilities.

(1) General information from all facilities

Subsection (a) notwithstanding, an electric utility may require the following information, in writing, from a facility purporting to be a qualifying small power production facility or co eneration facility: (See also subsection 4.1 (b) (2) (i).?


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(i) The name and address of the applicant and location of the f aci 1 i ty;

( i i ) A brief description of the facility, including a statement indicating whether such facility is a small power production f ac i 1 i ty or a cogenerat i on f ac i 1 i ty;

( i i i ) The primary energy source used or to be used by the f ac i 1 i ty ;

(iv) The power production capacity of the facility; and

(v) The percentage of ownership by any electric utility or by any electric utility holding company, or by any subsidiary of either.

(2) Additional information from small power producers

An electric utility may require the following additional information from a small power producer:

( i ) The location of the facility in relation. to any other small power production facilities located within one mile of the facility, owned by the applicant facility which use(s) the same energy source; ana

( i i ) Information identifying any planned usage of natural gas, oil, or coal.

(3) Additional information from cogeneration facilities

(i) A description of the cogeneration system, including whether the facility is a topping or bottoming cycle and sufficient information to determine that any applicable requirements of 18 CFR 292.205 will be met; and

( i i ) The date installation of the facility began or will begin.

(c) Optional certification procedure

IF an electric utility refuses to treat a facility as a qualifying facility, the facility may file an Application for Certification as a Qualifying Facility with the Cornnission. The Application shall allege that the facility is a qualifying facility as defined by these rules, and shall contain the same information listed in Section 2.7 (b).


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With in 90 days o f t h e f i l i n g of an App l i ca t i on f o r C e r t i f i c a t i o n , t he Commission s h a l l issue an order grant ing o r denying the Appl icat ion, o r s e t t i n g the ma t te r f o r hearing. Any order denying c e r t i f i c a t i o n s h a l l i d e n t i f y t h e s p e c i f i c requirements which were no t met. If no order i s issued w i t h i n 90 days o f t h e f i l i n g of a complete Appl icat ion, t he App l i ca t i on s h a l l be deemed t o have been granted.

(d) Revocation of q u a l i f y i n g status.

(1) Because t h e FERC may revoke t h e q u a l i f y i n g s ta tus o f a q u a l i f y i n g f a c i l i t y t h a t has been c e r t i f i e d under t h i s sec t i on i f such f a c i l i t y f a i l s t o comply w i t h any o f t he statements contained i n i t s a p p l i c a t i o n f o r FERC c e r t i f i c a t i o n , n o t i c e o f t he revocat ion must be received by t h i s Commission no l a t e r than t h i r t y (30) days a f t e r revocat ion o f q u a l i f y i n g s ta tus by t h e FERC.

2) Because a small power producer o r cogenerator may apply t o t h e FERC f o r a determinat ion t h a t t h e proposed a l t e r a t i o n o r mod i f i ca t i on o f a FERC-cert i f ied q u a l i f y i n g f a c i l i t y w i l l not r e s u l t i n a revocat ion o f q u a l i f y i n g status, n o t i c e o f any change i n s ta tus o f a c e r t i f i e d q u a l i f y i n g f a c i l i t y must be received by t h i s Commission no l a t e r than t h i r t y (30) days a f t e r t he change i n s ta tus i s determined.


SECTION 3

ARRANGEMENTS BETWEEN UTILITIES AND QUALIFYING COGENERATORS AND SMALL POWER PRODUCTION FACILITIES

SECTION 3.1 - SCOPE:

Appl i c a b i 1 i ty.

Sect ion 3 appl ies t o the r e g u l a t i o n o f sales and purchases between q u a l i f y i n g f a c i l i t i e s and e l e c t r i c u t i l i t i e s .

(b) Case-by-case neqot iat ions.

(1) Except as s p e c i f i e d by a standard t a r i f f (Section 3.4(c)), u t i l i t i e s w i l l conduct case-by-case negot ia t ions w i t h q u a l i f y i n g f a c i l i t i e s t o e s t a b l i s h t h e s p e c i f i c arrangements between the e l e c t r i c u t i 1 i t y and the q u a l i f y i n g f a c i 1 i ty.

(2) The arrangements addressed i n case-by-case negot ia t ions between e l e c t r i c u t i l i t i e s and q u a l i f y i n g f a c i l i t i e s s h a l l inc lude and be guided by the p rov i s ions made i n Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, and 3.0.

(3) Nothing i n (2) above s h a l l be construed t o l i m i t t h e considerat ion o r i n c l u s i o n o f any o the r f a c t o r s w i t h i n the arran ements negot iated between e l e c t r i c u t i l i t i e s and q u a l i 3 y i n g f a c i l i t i e s .

(c) Negotiated r a t e s o r terms.

Nothing i n t h i s subpart:

(1) L i m i t s the a u t h o r i t y of any e l e c t r i c u t i l i t y o r any q u a l i f y i n g f a c i l i t y t o agree t o a r a t e f o r any purchase, o r terms o r cond i t i ons r e l a t i n g t o any purchase, t h a t d i f f e r from t h e r a t e o r terms o r cond i t i ons t h a t would otherwise be requi red by t h i s subpart; o r

(2) Affects t h e v a l i d i t y of any con t rac t entered i n t o between a qua l i f y i ng f a c i l i t y and an e l e c t r i c u t i l i t y f o r any purchase.


I

SECTION 3.2 - AVAILABILITY OF ELECTRIC UTILITY SYSTEM COST DATA: (a) Appl icabi 1 i tx.

The following utilities shall be subject to the provision of this section:

Arkansas Power & Light Company Southwestern Electric Power Company Empire District Electric Company Oklahoma Gas & Electric Company Arkansas Electric Cooperative Corporation, Inc.

(b) General rule.

The electric utilities listed in subsection (a) shall file with the Commission and maintain for inspection the following data:

The estimated avoided cost on the electric utility's system, solely with respect to the energy component, for various levels of purchases from qualifying facilities. Such levels of purchases shall be stated in blocks of not more than 100 megawatts for systems with peak demand of 1,000 megawatts or more, and in blocks equivalent to not more than 10 per cent of the system peak demand for systems of less than 1,000 megawatts. The avoided costs shall be stated on a cents per kilowatt-hour basis, during daily and seasonal peak and off-peak periods, by year, for the current calendar year and each of the next five years;

The electric utility's plan for the addition of capacity by amount and type, for purchases of firm energy and capacity, and for capacity retirements for each year during the succeeding 10 years; and

The estimated capacity costs at completion of the planned capacity additions and planned capacity firm purchases, on the bhsis o f dollars per kilowatt, and the associated energy costs of each unit, expressed in cents per kilowatt hour. These costs .shall be expressed in terms of individual generating units and of individual planned firm purchases.

Said data shall be filed with the Commission in Docket 81-071-F not later than June 30, 1982, and every two years thereafter. Such data will be for a period ending December 31 o f ..the year preceding the due date o f the information.

3- 2 Cogeneration Rules

(c) Additional data requested by qualifying facilities.

A qualifying facility may request an electric utility to provide system cost data in addition to the data required by Section 3.2 (b) above. The electric utility shall make a good faith effort to supply the requested data, and may bill the qualifying facility for the cost of supplying the data. Before honoring the data request, the electric utility may rewire the facility to provide it with the information listed in. Section 2.7 (b).

(d) Filinq the terms of agreements between utilities and facilities.

Each electric utility shall file with the Comnission the terms and conditions of each agreement made with any qualifying facilities to interconnect, buy, or sell, service. Said information shall be filed in Docket 81-071-F.

(e) Commission review.

(1) Any data submitted by an electric utility under this section shall be subject to review by this Commission.

(2) In any such review, the electric utility is obligated to justify its data.

SECTION 3.3 - ELECTRIC UTILITY OBLIGATIONS: (a) Obliqation to purchase from qualifying facilities.

Each electric utility shall purchase, in accordance with Section 3.4, any energy and capacity that is made available from a qualifying facility, either:

(1) Directly to the electric utility; or

(2) Indirectly to the electric utility in accordance with Paragraph (d) of this section.

Obligation to sell to qualifyinq facilities.

Each electric utility shall sell to any qualifying facility, in accordance with Section 3.5, any energy and power requestea by the qualifying facility.

,

(b)


. -

(c) Ob l i ga t i on t o interconnect.

(1) Subject t o Paragraph (c ) (2 ) o f t h i s section, any e l e c t r i c u t i l i t y s h a l l make such interconnect ions w i t h any q u a l i f y i n g f a c i l i t y as may be necessary t o accomplish purchase$ o r sa les under Sect ion 3. The o b l i g a t i o n t o pay f o r any in terconnect ion costs s h a l l be determined i n accordance w i t h Sect ion 3.6.

4

k

.

(2) No e l e c t r i c u t i l i t y i s requi red t o interconnect w i th any qua l i f y i ng f a c i l i t y if, s o l e l y by reason o f purchase o r sales using t h e interconnection, t h e e l e c t r i c u t i l i t y

'would become subject t o r e g u l a t i o n as a p u b l i c u t i l i t y under Part I1 o f t h e Federal Power Act.

(d ) Transmission t o o the r e l e c t r i c u t i l i t i e s .

I f a q u a l i f y i n g f a c i l i t y agrees, an e l e c t r i c u t i l i t y t h a t would otherwise be ob l i ga ted t o purchase energy o r capaci ty f rom such a q u a l i f y i n g f a c i l i t y may t ransmi t t he energy o r capaci ty t o any o the r e l e c t r i c u t i l i t y . Provided, t h a t such t r a n s m i t t i n g u t i l i t y may, a t i t s so le option, i n t e r r u p t o r modify sa id t ransmission serv ice if, i n i t s opinion, such serv ice would jeopard ize o r degrade i t s system o r serv ice t o o the r customers.

Any e l e c t r i c u t i l i t y w i t h i n t h e j u r i s d i c t i o n o f t h e Comnission t o which such energy o r capaci ty i s t ransmi t ted s h a l l purchase such energy o r capac i t y under Sect ion 3 as i f the q u a l i f y i n g f a c i l i t y were supplying energy o r capaci ty d i r e c t l y t o such e l e c t r i c u t i l i t y . The r a t e f o r purchase by t h e e l e c t r i c u t i l i t y under t h e j u r i s d i c t i o n o f t h e Commission t o which such energy i s t ransmi t ted s h a l l be adjusted up o r down t o r e f l e c t l i n e losses pursuant t o Sect ion 3.4 and s h a l l not inc lude any charges f o r transmission. The q u a l i f y i n g f a c i l i t y may be charged b the t r a n s m i t t i n g u t i l i t y f o r t ransmission o f energy or capaci r y from a q u a l i f y i n g f a c i l i t y t o another u t i l i t y .

(e) Para1 1 e l operat ion . Each e l e c t r i c u t i l i t y s h a l l o f f e r t o operate i n p a r a l l e l w i th a qua l i f y i ng f a c i l i t y , providea t h a t t he q u a l i f y i n f a c i l i t y

accordance wi th Sect ion 3.8. complies wi th any appl icable standards estab 9 ished i n

3-4 Cogeneration Ru 1 es

-. . \

- . I . - 3 .

a

SECTION 3.4 - RATES FOR PURCHASES: (a) Rates for purchases.

(1) Rates for purchases shall:

(i) Be just and reasonable to the electric consumer of the electric utility and in the public interest; and

(i i ) Not discriminate against qual ifyi ng cogeneration and small power production facilities.

(2) Nothing in Section 3 requires any electric utility to pay more than the avoided costs for purchases.

(b) Relationship to avoided costs.

(1) For purposes of this paragraph, "new capacity" means any purchase from capacity of a qualifying facility, construction of which was commenced on or after November 9, 1978.

(2) Subject to Paragraph (b) (4) of this section, a rate for purchases satisfies the requirements o f Paragraph (a) of this section if the rate equals the avoided costs determined after consideration of the factors set forth in Paragraph (e) of this section.

(3) Rates for purchases from new capacity shall be in accordance with Paragraph (b) (2) of this section, regardless of whether the electric utility making such purchases is simultaneously making sales to the qualifying f ac i 1 i ty .

(4) Purchases from facilities whose construction commenced earlier than November 9, 1978, may be 10% less than avoided cost. However, such purchases are not allowed if the utility simultaneously sells power to the qualifying f ac i 1 i ty.

(5) In the case in which the rates for purchases are based upon estimates of avoided costs over the specific term of the contract or other legally enforceable obligation, the rates for such purchases do not violate Section 3 if the rates for such purchases differ from avoided costs at the time o f delivery.

(6) Whenever a utility i s required to make payments for purchases from a qualifying facility, which payments incluoe avoided capacity costs, then any rates for purchase of energy from such qualifying facility shall be based upon the same capacity assumed for purposes of calculating the avoided capacity cost.


1

(c) Standard r a t e s f o r purchases.

(1) There s h a l l be p u t i n t o e f f e c t ( w i t h respect t o each e l e c t r i c u t i l i t y ) standard ra tes f o r purchases from qua l i f y i ng f a c i l i t i e s wi th a design capaci ty o f 100 k i lowat ts o r less.

(2 ) There may be p u t I n t o e f f e c t standard r a t e s f o r purchases from q u a l i f y i n g f a c i l i t i e s w i t h a design capaci ty o f more than 100 k i l owa t t s .

(3) The standard r a t e s f o r purchases under t h i s paragraph:

(i) Sha l l be cons is ten t with Paragraphs (a), (b), and (e) o f t h i s section; ana

(ii) S h a l l use estimates o f avoided cos ts based on t h e assumed t o t a l output o f q u a l i f y i n g f a c i l i t i e s o f l ess than 100 kW t h a t are expected t o o f f e r t h e i r output f o r sa le dur ing the next 12 months; and 1

(iii) May d i f f e r e n t i a t e among q u a l i f y i n g f a c i l i t i e s using var ious technologies on the basis o f the supply cha rac te r i s t i c s o f t he d i f f e r e n t technologies.

(4) The e l e c t r i c u t i l i t y s h a l l prov ide j u s t i f i c a t i o n and support f o r t he assumed output o f q u a l i f y i n g f a c i l i t i e s o f l ess than 100 kW t h a t i s used i n the c a l c u l a t i o n o f avoided costs f o r the standard t a r i f f , Paragraph ( c ) (3 ) (ii).

(5) Standard t a r i f f s w i l l p rov ide q u a l i f y i n g f a c i l i t i e s under 100 kW w i t h the ' op t i on of e i t h e r s e l l i n g on ly the f a c i l i t y ' s output ne t o f i t s own use t o t h e u t i l i t y o r s e l l i n g i t s e n t i r e output and 's imultaneously purchasing i t s requirement f rom the u t i l i t y . Should the q u a l i f y i n g f a c i l i t y e l e c t t h e o p t i o n of simultaneous purchases and

any add i t i ona l in terconnect ion cos ts as spec i f i ed i n fay e c t i o n 3.6. sales, i t w i l l be expected t o

(d) Purchases 'as avai lable' ' o r pursuant t o a l e g a l l y enforceable ob l igat ion.

Each q u a l i f y i n g f a c i l i t y s h a l l have t h e o p t i o n e i t h e r :

(1) To prov ide energy as t h e q u a l i f y i n g f a c i l i t y determines such energy t o be ava i l ab le f o r such purchases, i n which case t h e r a t e s f o r such purchases shall be based on t h e

3-6 Cogeneration Ru 1 es

purchasing u t i l i t y ' s avoided costs ca l cu la ted a t the t ime o f d e l i very; o r

(2) To prov ide energy o r capaci ty pursuant t o a l e g a l l y enforceable o b l i g a t i o n f o r t h e d e l i v e r y o f energy o r capac i t y over a s p e c i f i e d term, i n which case the ra tes f o r such purchases sha l l , a t t he o p t i o n of t he q u a l i f y i n g f a c i l i t y exercised p r i o r t o t h e beginning o f t he spec i f i ed term, be based on e i t h e r :

( 4 ) The avoided costs ca lcu lated a t t he t ime o f de l i ve ry ; o r

(ii) The avoided costs ca lcu lated a t t h e t ime t h e

(iii) Any o the r s p e c i f i c condi t ions agreed t o i n the

o b l i g a t i o n i s incurred; o r

l e g a l l y enforceable ob l igat ion.

Factors a f f e c t i n s r a t e s f o r purchases.

I n determining avoided costs, t he f o l l o w i n g f a c t o r s shal l , t o t h e extent pract icable, be taken i n t o account:

(1) The data provided pursuant t o Sect ion 3.2, i nc lud ing review o f any such data;

(2) The a v a i l a b i l i t y of capaci ty o r energy f rom a q u a l i f y i n g f a c i l i t y dur ing the system d a i l y and seasonal peak periods, i nc 1 udi ng :

(i) The a b i l i t y o f the u t i l i t y t o d ispatch the q u a l i f y i n g f ac i 1 i t y ;

(i i ) The expected o r demonstrated re1 i abi 1 i ty o f the q u a l i f y i n g f a c i l i t y ;

(iii) The terms o f any con t rac t o r o the r l e g a l l y enforceable ob l igat ion, i nc lud ing t h e du ra t i on o f t h e - ob l i ga t i on , terminat ion n o t i c e requirement, and sanct ion f o r non-compliance;

( i v ) The extent t o which scheduled outages o f t he coo.rdinated w i t h q u a l i f i n g f a c i l i t y can be . u s e f u l l

schedu 7 ed outages o f t he u t i l i t y ' s r a c i l i t i e s ;

( v ) The usefulness of energy and capac i t y suppl ied f rom a q u a l i f y i n g f a c i l i t y dur ing system m e r encies,

generation; i n c l u d i n g i t s a b i l i t y t o separate i t s load P rom i t s


I

(3)

(4)

( v i ) The i n d i v i d u a l and aggregate value o f energy and capaci ty f rom q u a l i f y i n g f a c i l i t i e s on the e l e c t r i c u t i l i t y ' s system; and

( v i i ) The smal ler capac i t y increments and the sho r te r lead t imes a v a i l a b l e w i t h addi t ions of capaci ty f r o m qual i f y i ng f a c i 1 i t i es.

The r e l a t i o n s h i p o f t he a v a i l a b i l i t y of energy or capaci ty from the q u a l i f y i n g f a c i l i t y as der ived i n Paragraph (e) (2) o f t h i s section, t o t h e a b i l i t y o f t he e l e c t r i c u t i l i t y t o avoid costs, i nc lud ing the d e f e r r a l o f capaci ty add i t i ons and the reduct ion of f o s s i l f u e l use.

The cos ts o r savings r e s u l t i n g f rom v a r i a t i o n s i n l i n e losses from those t h a t would have ex i s ted i n the absence of purchases from a qua l i f y i ng f a c i l i t y , i f t h e purchasing e l e c t r i c u t i 1 i t y generated an equivalent amount o f energy i t s e l f o r purchased an equivalent amount o f e l e c t r i c energy o r capacity.

Periods dur ing which purchases are not required.

Any e l e c t r i c u t i l i t y which g ives n o t i c e pursuant t o paragraph ( f) (2) o f t h i s sec t i on w i l l no t be requi red t o purchase e l e c t r i c energy o r capaci ty dur ing any pe r iod du r ing which, due t o operat ional circumstances, purchases from q u a l i f y i n g f a c i l i t i e s w i l l r e s u l t i n costs greater than those which the u t i l i t y would i n c u r i f i t d i d not make such purchases, but instead generated an equivalent amount of energy i t s e l f .

Any e l e c t r i c u t i l i t y seeking t o invoke paragraph ( f ) (1) o f t h i s sec t i on must n o t i f y , i n accordance wi th appl icable Arkansas law o r regulat ion, ,each a f fec ted q u a l i f y i n g f a c i l i t y i n t ime f o r t he q u a l i f y i n f a c i l i t y t o cease the d e l i v e r y o f energy o r capaci ty t o t 1 e e l e c t r i c u t i l i t y .

Any e l e c t r i c u t i l i t y which f a i l s t o comply wi th the p rov i s ions o f paragraph ( f) (2) o f t h i s sect ion w i l l be requi red t o pay the same r a t e f o r such purchase o f energy o r capaci ty as would be requi red had t h e pe r iod described i n paragraph ( f ) (1) o f t h i s sec t i on not occurred.

A c l a i m by an e l e c t r i c u t i l i t y t h a t such a pe r iod has occurred or w i l l occur i s subject t o such v e r f f i t a t i o n by t h e Commission as i t determines i s necessary o r appropriate, e i t h e r before o r a f t e r t he occurrence.

3-a Cogeneration Rules

SECTION 3.5 - RATES FOR SALES:

(a) General ru les.

(1) Rates f o r sales:

(i) Sha l l be j u s t and reasonable and i n the p u b l i c

(ii) S h a l l not d i sc r im ina te against any q u a l i f y i n g f a c i l i t y compared w i t h r a t e s f o r sales t o o the r customers served by t h e e l e c t r i c u t i l i t y .

n t e r e s t ; and

(2) Rates f o r sales t h a t are based on accurate data and consis tent systemwide cos t i ng p r i n c i p l e s s h a l l no t be considered t o d i sc r im ina te against any q u a l i f y i n g f a c i l i t y t o the ex ten t t h a t such ra tes apply t o t h e u t i l i t y ' s o ther customers w i t h s i m i l a r load o r o ther cost - re la ted c harac t e r i s t i cs .

(b) Add i t i ona l services t o be provided t o q u a l i f y i n g f a c i l i t i e s .

(1) Upon request o f a q u a l i f y i n g f a c i l i t y , each e l e c t r i c u t i l i t y s h a l l provide:

( i ) Supp 1 ement a ry power ;

(ii) Back-up power;

( i i i ) Maintenance power; and

( i v ) I n t e r r u p t i b l e power.

( c ) Rates f o r sales o f back-up and maintenance power.

The r a t e s f o r sales o f back-up power o r maintenance power:

(1) Sha l l no t be based upon an assumption (unless supported by f a c t u a l data) t h a t forced outages o r o t h e r reduct ions i n e l e c t r i c output by a l l q u a l i f y i n g f a c i l i t i e s i n an e l e c t r i c u t i l i t y l s system w i l l occur simultaneously, o r du r ing the system peak, o r both; and

(2) Sha l l take i n t o account t h e extent t o which scheduled outages of t h e q u a l i f y i n g f a c i l i t i e s can be u s e f u l l y coordinated wi th scheduled outages o f t he u t i l i t y ' s f ac i 1 i ti es . The u t i l i t y may e s t a b l i s h d i f f e r e n t r a t e s f o r supplying these services t o non-qual i fy ing f a c i l i t i e s i f such


. . * - . . .

differentiation is empirically justified and supported by utility findings on factors such as the diversity of out ages .

SECTION 3.6 - INTERCONNECTION COSTS: (a) Obliqation to pay.

Each qualifying facility shall be obligated to pay any interconnection costs estimated on a nondiscriminatory basis with respect to other customers with similar load character1 st ics.

(b) Reimbursement of interconnection costs.

Each utllity shall make provisions in its standard tariff (Section 3.4(c)) or the case-by-case legally binding obligations with qualifying facilities for the repayment of interconnection costs. The utility shall provide the alternatives of either complete payment at the inception of service, or periodic payments over a term not less than two years wherein such payments provide for the amortization of interconnection costs as well as a return to the utility equal to its pre-tax marginal cost of capital. In addition, the qualifying facility will reimburse the utility for any recurring interconnection and administrative costs.

SECTION 3.7 - SYSTEM EMERGENCIES: (a) Qualifyinq facilities' obliqation to provide power durinp

system emerqenci es . A qualifying facility shall be required to provide energy or capacity to an electric utility during a system emergency only to the extent:

(1) Provided by agreement between such qual ifyi ng f aci 1 i ty and electric uti 1 i ty; or -

(2) Ordered under Section 202(c) of the Federal Power Act.

(b) Discontinuance of purchases and sales during system emerqencies.

During any system emergency, an electric utility may di sconti nue:

3-1 0

- *

Cogeneration Rules

I

(1) Purchases from a q u a l i f y i n g f a c i l i t y i f such purchases

(2) Sales t o a qua l i f y i ng f a c i l i t y provided t h a t such

would c o n t r i b u t e t o such emergency; and

discontinuance i s on a non-discr iminatory basis.

SECTION 3.8 - STANDARDS FOR OPERATING R E L I A B I L I T Y :

(a) Interconnect ion plan.

Each u t i l i t y s h a l l establ ish, and make a v a i l a b l e f o r inspection, gu ide l ines f o r assuring safe and r e l i a b l e operat ion of interconnected q u a l i f y i n g f a c i l i t i e s . It may a l s o requ i re an in terconnect ion p l a n from t h e q u a l i f y i n g f a c i l i t y t o f a c i 1 i t a t e q u a l i f y i n g f a c i 1 i t y / u t i 1 i ty negot i at ions.

Upon r e c e i p t o f t h e in terconnect ion plan, t h e u t i l i t y s h a l l prov ide the q u a l i f y i n g f a c i l i t y w i t h a cost proposal i n d e n t i f y i n g t h e in terconnect ion cos ts and a l i s t o f con t rac t issues t o be addressed i n t h e negot iat ions.

(b) Inspection.

No u t i l i t y may unreasonably re fuse t o inspect i t s p o r t i o n o f t h e in terconnect ion equipment nor ma a u t i l i t y unreasonably de lay the performance o f i t s p o r t i o n o iu any such inspection.

The e l e c t r i c u t i l i t y may r e q u i r e t h a t the q u a l i f y i n g f a c i l i t y ' s equipment be c e r t i f i e d by a l o c a l inspect ion a u t h o r i t y f o r compliance wi th the requirements o f t h e e l e c t r i c u t i l i t y ' s gu ide l ines and t h e negot iated in terconnect ion plan. Such requirement by the e l e c t r i c u t i l i t y s h a l l n o t c o n s t i t u t e endorsement o f design, strength, ef fect iveness, plan, adequacy, o r capaci ty; nor s h a l l such requirement imply a warranty o f safety, d u r a b i l i t y , o r r e l i a b i l i t y o f t he q u a l i f y i n g f a c i l i t y .

(c) Prov is ion o f equipment and safety.

The qua l i f y i ng f a c i l i t y s h a l l provide, i n s t a l l , and maintain, a t i t s own expense, a l l e l e c t r i c a l w i r i n g and apparatus ( i n c l u d i n g any p r o t e c t i v e equipment, requ i red e i t h e r by the Nat ional E l e c t r i c a l Code and/or any appl icable municipal code) and '%% comply with a l l requirements prescr ibed by any overnmental a u t h o r i t having j u r i s d i c t i o n

l i a b i l i t y o f t he u t i l i t y . thereof, with compl 9 ance of such du ty be ! ng a cond i t i on t o any

3-1 1 Cogeneration Rules

(d) Right o f r e f u s a l t o connect.

The u t i l i t y may reserve t h e r i g h t t o re fuse t o connect t o any w i r i n g o r apparatus which does no t meet t h e requirements r e f e r r e d t o i n paragraph (c) above, and t h e u t i l i t y may, wi thout advance not ice, d iscont inue i t s connection w i t h t h e q u a l i f y i n g f a c i l i t y ' s w i r i n g o r apparatus when a dangerous c o n d i t i o n of w i r i n g o r equipment upon t h e premises o f t he q u a l i f y i n g f a c i l i t y i s discovered. Notwithstanding the u t i l i t y ' s r i g h t t o ' re fuse in terconnect ion as r e c i t e d above, no a c t i o n by t h e u t i l i t y t o interconnect s h a l l be i n te rp re ted as being an approval o f o r acquiescence i n the design o r I n s t a l l a t i o n o f t he equipment o f t he q u a l i f y i n g f a c i l i t y .

(e) In terconnect ion switch.

There s h a l l be an in terconnect ion switch, i n s t a l l e d and maintained a t t he expense o f t he q u a l i f y i n g f a c i l i t y , which i s capable o f being locked open, and such swi tch s h a l l be a v a i l a b l e and accessible t o t h e u t i l i t y t o assure t h a t the connecting c i r c u i t may be p o s i t i v e l y de-energized..

( f ) Operatinq procedures.

The qua l i f y i ng f a c i l i t y and t h e u t i l i t y w i l l develop engineering and operat ing guides and procedures f o r t he safe in terconnect ion o f t he f a c i l i t y t o the u t i l i t y ' s system.


SECTION 4

PROCEDURES FOR THE CONDUCT OF NEGOTIATIONS BETWEEN ELECTRIC U T I L I T I E S AN0 QUALIFYING COGENERATION AND SMALL POWER PRODUCTION F A C I L I T I E S : PROCEDURES

FOR APPEAL TO THE ARKANSAS PUBLIC SERVICE COMMISSION

SECTION 4.1 - PROCEDURES FOR NEGOTIATION:

(a) APP 1 i c a b i 1 i ty.

This sec t ion app l ies t o the conduct o f negot ia t ions on a case-by-case bas is between e l e c t r i c u t i l i t i e s and q u a l i f y i n g f a c i l i t i e s . It does no t apply t o any q u a l i f y i n g f a c i l i t i e s t h a t e l e c t t o adopt a standard t a r i f f ava i l ab le from the e l e c t r i c u t i l i t y .

(b) General ru le .

To ensure t h e t i m e l y progress i n t h e case-by-case negot ia t ion of arrangements be!ween an e l e c t r i c u t i l i t y and a q u a l i f y i n g f a c i l i t y , t he p a r t i e s are t o conduct negot ia t ions i n a manner t h a t i s cons is ten t wi th t h e f o l l o w i n g procedural steps and schedules :

(1) Any p a r t y wishing t o i n i t i a t e negot ia t ions w i t h an e l e c t r i c u t i l i t y s h a l l send a w r i t t e n n o t i f i c a t i o n v i a c e r t i f i e d m a i l t o the designated u t i l i t y . The n o t i f i c a t i o n should conta in the f o l l o w i n g in format ion:

( i ) The name, address, and responsible i n d i v i d u a l o f the owner o f t h e p o t e n t i a1 q u a l i f y i n g f ac i 1 i ty ;

(ii) A general desc r ip t i on o f t h e proposed f a c i l i t y ;

(iii) A general statement o f t h e , t y p e o f r e l a t i o n s h i p t h a t t h e p o t e n t i a l q u a l i f y i n g f a c i l i t y wishes t o en ter i n t o w i t h t h e u t i l i t y (e.g., durat ion, l e v e l o f sales for energy, capaci ty) ; and

( i v ) The nature o f any s p e c i f i c da ta o r in fo rmat ion t h a t t he p o t e n t i a l q u a l i f y i n g f a c i l i t y would l i k e t o inspect. (See Sect ion 3.2, general ly.) Any and a l l cos ts of supply ing o r generat ing such data o r in fo rmat ion s h a l l be recovered f rom the q u a l i f y i n g f a c i l i t y and no t from t h e u t i l i t y ' s ratepayers.

(2) W i th in 30 days o f t h e r e c e i p t o f t h e i n i t i a l n o t i f i c a t i o n prov ided by t h e p o t e n t i a l q u a l i f y i n g f a c i l i t y , t he e l e c t r i c u t i 1 i t y s h a l l :

4- 1 Cogeneration Rules

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( i ) Acknowledge r e c e i p t o f t he p o t e n t i a l q u a l i f y i n g f a c i l i t y ' s n o t i f i c a t i o n , and advise the q u a l i f y i n g f a c i l i t y o f the estimated cos t o f supplying the data requested pursuant t o paragraph (b) (1) ( i v ) . Provided, t h a t once a p o t e n t i a l q u a l i f y i n g f a c i l i t y i n i t i a t e s negot ia t ions under t h i s subsection w i t h an e l e c t r i c u t i l i t y , t he u t i l i t y may requ i re the p o t e n t i a l q u a l i f y i n g f a c i l i t y t o fu rn i sh the in fo rmat ion l i s t e d by subsection 2.7 ( b ) e n t i t l e d "Optional screening procedure by e l e c t r i c u t i l i t i e s " ;

(ii) Supply t h e requ i red requested da ta o r in fo rmat ion t o t h e p o t e n t i a1 qual i f y i ng f ac i 1 i ty;

(iii) Designate a responsible i n d i v i d u a l t o d i r e c t a l l i n t e r a c t i o n s between the e l e c t r i c u t i l i t y and the p o t e n t i a l q u a l i f y i n g f a c i l i t y , and in form the p o t e n t i a l qua l i f y i ng f a c i l i t y o f t h a t person's i d e n t i t y ; and

( i v ) Designate a t ime and p lace no t l a t e r than 45 days a f t e r r e c e i p t o f t h e i n i t i a l n o t i f i c a t i o n t o ho ld a f i r s t nego t ia t i on session.

(3) The e l e c t r i c u t i 1 i ty and p o t e n t i a1 qual i f y i ng f ac i 1 i ty w i l l meet as o f t e n as poss ib le t o a l low t h e conclusion of negot ia t ions w i t h 150 days o f t he i n i t i a l n o t i f i c a t i o n o f t h e u t i l i t y by the p o t e n t i a l q u a l i f y i n g f a c i l i t y .

SECTION 4.2 - PROCEDURES FOR APPEAL:

(a) Appl i c a b i 1 i ty.

Any p o t e n t i a l q u a l i f y i n g f a c i l i t y t h a t has met t h e procedural requirements se t f o r t h i n Sect ion 4.1 (b ) (1-3 and has not

t h e e l e c t r i c u t i l i t y f o r t h e purchase o f i t s power o r has not e lec ted t o adopt a standard t a r i f f a t t he end o f such negot ia t ions may appeal t o t h i s Comnission f o r r e l i e f . The procedure f o r appeal t o the Commission, se t ou t i n t h i s Section, s h a l l no t l i m i t any r i g h t s t o appeal, t o f i l e complaints, o r t o p a r t i c i p a t e i n proceedings which a q u a l i f y i n g f a c i l i t y may have under o the r app l i cab le r u l e s o r laws:

concluded o r renewed a s p e c i f i c b ind ing l e g a l o b l i g a t i o n w i t h


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(b) General rule.

To ensure the timely conclusion of an agreement between a potential qualifying facility and an electric utility, a potential qualifying facility meeting the requirements of Section 4.2(a) may appeal to this Conission by the following procedure :

(1) The potential qualifying facility shall send a formal notification of its intent to appeal to both this Commission and the electric utility via certified mail.

The notification of intent. to appeal should include the following information:

(i) A summary of the facts related to the negotiation of the potential qualifying facility and the electric utility, including all notifications and correspondence.

(i i ) A statement of the potential qualifying facility's opinion as to the reasons that negotiations with the electric utility could not be completed.

( i i i ) A statement of the terms and conditions that the potential qualifying facility would propose in a final agreement with the electric utility.

(2) The Commission will set a hearing date to occur within 20 days of, its receipt of the application for a peal, should

with the procedures specified in Section 4.1 (b) (1-3). it find that the potential qualifying faci P ity complied

(3) The electric utility and potential qualifying facility shall present relevant verbal argument and written briefs before the Comnission at the desjgnated hearing.

(4) The Comnission will issue an order on its determination of the appropriate terms and conditions for arrangements between the potential qualifying facility and the electric utility. This Order must be issued within 30 days of the end of the hearing.

(5) The Comission Order will be binding on the electric utility. The potential qualifying facility has 10 days to accept the terms o f the Conmission Order.

(6) If the potential qualifying facility accepts the terms of the Commizsion Order, the electric utility has 20 days

. 4-3 Cogeneration Ru 1 es

from such acceptance to present a legally binding . obligation incorporating the terms and conditions o f the

Commission's Order to the potential qualifying facility for signature and formal agreement. The Commission shall receive copies and be notified of this agreement.

(7) Should the potential qualifying facility not accept the terms and conditions determined by this Commission, the qualifying facility must both reinitiate its proposal to the electric utility as descrioed in Section 4.1 (b) (1-3) and show a significant change in the basic facts and/or i t s proposal before the Commission will consider any future appeal .


SECTION 5

COMM I SS ION JUR I SD I CT ION.

SECTION 5.1 - EXEhPTION OF QUALIFYING FACILITIES FROM ALL OTHER ARKANSAS UTILITY REGULATION:

All qualifying facilities are exempted from all other Arkansas state utility laws and regulations, other than those promulgated herein, respecting :

(a) The rates of electric utilities; and

(b) The financial and organizational regulation of electric uti 1 i ties.

SECTION 5.2 - APPLICATION FOR COMMISSION JUDGMENT ON JURISDICTION: Any potential qualifying facility may file an application for a

by the Commission on the jurisdiction of the Comnission over ru'ina he proposed qual ifyi ng f aci 1 i ty. If the potential qualifying facility is seeking certification from the Comnission o f its status as a qualifying facility, the facility shall follow the procedure prescribed by Section 2.7

The applicant must provide any such additional data that the Comnission deems necessary for its consideration.

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The Commission shall provide a ruling of its jurisdiction within 90 days of the initial filing..

SECTION 5.3 - EXEMPTION FROM COMMISSION JURISDICTION: (a) Any potential qualifying facility that is determined to be

subject to the Commission's jurisdiction in Section 5.1 may apply to the Comnission for a waiver from such jurisdiction.

(b) The application for the waiver shall include the information identified in Section 5.1 (b) as well as a description of the potential effects of such a waiver on the general public and on electricity consumers in particular.


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(c) Public notice shall be g iven of the application for a waiver, and a 30 day wait ing period will be provided for the receipt of public comments.

( d ) Within 20 days of the end o f the p u b l i c comment period, the Commission will either grant or deny the requested waiver.


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SECTION 6

RECOVERY OF COSTS OF PURCHASES FROM A QUALIFYING FACILITY BY AN ELECTRIC UTILITY

All costs, net o f costs associated with interconnection or otherwise recovered from the qualifying facility, incurred by an electric utility for purchases of power from a qualifying facility pursuant to a standard tariff or legally enforceable obligation shall be recovered by the electric utility as .a cost of purchased power to be reflected in the rates charged to the customers o f the electric utility.


Documents

Cogeneration Rules - apscservices.info