WSR 19-05-089
PROPOSED RULES
UTILITIES AND TRANSPORTATION
COMMISSION
[Filed February 20, 2019, 10:19 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 16-18-057.
Title of Rule and Other Identifying Information: The Washington utilities and transportation commission is engaged in a rule making to consider rules governing integrated resource planning for electric companies, including but not limited to revising its rules in chapter 480-107 WAC, Purchases of electricity from qualifying facilities and independent power producers and purchases of electrical savings from conservation suppliers, for the implementation of the federal Public Utility Regulatory Policies Act. The rule making is intended to better align the commission's rules with federal requirements and meet a changing electricity market.
Hearing Location(s): On April 30, 2019, at 1:30 p.m., at the Richard Hemstad Building, Room 206, 1300 Evergreen Park Drive S.W., Olympia, WA 98504. Public hearing to consider adoption of the proposed rules.
Date of Intended Adoption: April 30, 2019.
Submit Written Comments to: Washington Utilities and Transportation Commission, 1300 Evergreen Park Drive S.W., Olympia, WA 98504, email records@utc.wa.gov, fax 360-586-1150, by April 1, 2019.
Assistance for Persons with Disabilities: Contact Susan Holman, phone 360-664-1243, TTY 360-586-8203, email susan.holman@utc.wa.gov.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of the rules the commission is currently proposing is to better align the rules with federal requirements, resolve issues identified in utility filings in recent years, and provide further guidance on the terms, conditions, and practices for standard contracts. It is anticipated that the effect of these changes will provide more regulatory certainty as well as increase the efficiency of the electricity market. The commission is continuing to consider other rules in chapter 480-107 WAC as part of this rule making and may propose additional revisions or new rules in the future.
Reasons Supporting Proposal: The commission must comply with applicable federal law. The federal Public Utility Regulatory Policies Act, as interpreted by the courts, imposes certain requirements that the commission must reflect in its rules. The current commission rules incorporate the requirements as they existed at the time the commission adopted those rules. The proposed revised rules are necessary to reflect the most recent federal requirements and interpretations of federal law, as well as to clarify the obligations of affected utilities and qualifying facility owners.
Rule is necessary because of federal law, Public Utility Regulatory Policy Act, 16 U.S.C. §§ 2601-45 (2018).
Name of Proponent: Washington utilities and transportation commission, governmental.
Name of Agency Personnel Responsible for Drafting: Brad Cebulko, 1300 Evergreen Park Drive S.W., Olympia, WA 98504, 360-664-1309; Implementation and Enforcement: Mark L. Johnson, 1300 Evergreen Park Drive S.W., Olympia, WA 98504, 360-664-1115.
A school district fiscal impact statement is not required under RCW
28A.305.135.
A cost-benefit analysis is not required under RCW
34.05.328. The Washington utilities and transportation commission is not an agency to which RCW
34.05.328 applies. The proposed rules are not significant legislative rules of the sort referenced in RCW
34.05.328(5).
The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. The proposed rules implement federal requirements applicable to large, investor-owned utilities, which do not qualify as small businesses. The proposed rules adopt basic information requirements for qualifying facility owners to contract with an investor-owned utility, and some of those qualifying facility owners may be classified as small businesses. However, the commission's proposed rules do not require the qualifying facility owners to provide information or take action that is substantially different than information those businesses must provide to the investor-owned utilities to enter into a contract, regardless of the commission's rules. To determine whether any stakeholders had information concerning the economic impact of the proposed rules, the commission issued a notice requesting the calculation of any costs companies anticipate they would incur as a result of the proposed rules. The commission received only one response that provided such information. Commission staff followed up with this commenter and clarified that the proposed rules do not impose on qualifying facility owners the requirements on which the commenter based his calculations. The commenter submitted revised comments stating that the proposed rules would not have an economic impact. Accordingly, the information available to the commission demonstrates that the proposed rules would not impose more-than-minor costs on businesses.
February 20, 2019
Mark L. Johnson
Executive Director and Secretary
Chapter 480-106 WAC
ELECTRIC COMPANIES—PURCHASES OF ELECTRICITY FROM QUALIFYING FACILITIES
NEW SECTION
WAC 480-106-001Purpose.
The purpose of this chapter is to implement the Public Utility Regulatory Policies Act of 1978 (PURPA), Title II, sections 201 and 210, and related regulations promulgated by the Federal Energy Regulatory Commission (FERC) in 18 C.F.R. Part 292 Subparts A and C. If there is any conflict between these rules and PURPA, or the related rules promulgated by FERC in 18 C.F.R. Part 292, PURPA and those related FERC rules control. Purchase of electric power under these rules satisfies a utility's obligation to purchase power from qualifying facilities under section 210 of PURPA.
NEW SECTION
WAC 480-106-002Application of rules.
(1) Except as otherwise provided in this chapter, the rules in this chapter apply to any utility that is subject to the commission's jurisdiction under RCW
80.01.040,
80.04.010, and chapter
80.28 RCW, and qualifying facilities as defined herein. The rules in this chapter do not supersede contracts existing before the effective date of this rule. At the expiration of such an existing contract between a utility and a qualifying facility, the provisions of this chapter shall apply to rates and terms offered under any contract extension or new contract.
(2) Nothing in this chapter prohibits a utility or a qualifying facility from agreeing to voluntary contracts with rates, terms, or conditions that differ from the provisions in this chapter.
NEW SECTION
WAC 480-106-003Exemptions from rules in chapter 480-106 WAC.
The commission, in response to a request or on its own initiative, may grant an exemption from, or modify the application of, any rule in this chapter consistent with the standards and according to the procedures set forth in WAC 480-07-110 Exemptions from and modifications to commission rules; conflicts with other rules.
NEW SECTION
WAC 480-106-007Definitions.
"Avoided costs" means the incremental costs to a utility of electric energy, capacity, or both that, but for the purchase from the qualifying facility or qualifying facilities, the utility would generate itself or purchase from another source.
"Back-up power" means electric energy or capacity supplied by a utility to replace energy ordinarily generated by a qualifying facility's own generation equipment during an unscheduled outage of the qualifying facility.
"Capacity" means the capability to produce or avoid the need to produce electric energy and ancillary electrical services, measured in kilowatts (kW) including, but not limited to, the criteria described in WAC 480-106-050 (5)(b).
"Commission" means the Washington utilities and transportation commission.
"Energy" means electric energy, measured in kilowatt-hours (kWh) or megawatt-hours (MWh).
"Integrated resource plan" or "IRP" means the filing made every two years by a utility in accordance with WAC 480-100-238 Integrated resource planning.
"Interconnection costs" means the reasonable costs of connection, switching, metering, transmission, distribution, safety provisions, and administration incurred by the utility directly related to the installation and maintenance of the physical facilities necessary to permit interconnected operations with a qualifying facility that are in excess of the corresponding costs the utility would have incurred if it had not engaged in interconnected operations. Interconnection costs do not include any costs included in the calculation of avoided costs.
"Interruptible power" means electric energy or capacity supplied by a utility subject to interruption by the utility under specified conditions.
"Legally enforceable obligation" means the binding commitment of a qualifying facility to sell, and of a utility to purchase, the energy, capacity, or both provided by the qualifying facility over a specified term in accordance with these rules.
"Maintenance power" means electric energy or capacity supplied by a utility during scheduled outages of a qualifying facility.
"Qualifying facility" means a cogeneration facility or a small power production facility that is a qualifying facility under 18 C.F.R. Part 292 Subpart B.
"Request for proposals" or "RFPs" means the documents describing a utility's solicitation of bids for delivering electric capacity, energy, or both, or conservation that was issued consistent with chapter 480-107 WAC.
"Supplementary power" means electric energy or capacity supplied by a utility that a qualifying facility regularly uses in addition to the energy or capacity that the qualifying facility generates itself.
"System emergency" means a condition on a utility's system that is likely to result in an imminent, significant disruption of service to customers or is imminently likely to endanger life or property.
"Utility" means an electrical company as defined in RCW
80.04.010 that is subject to the commission's jurisdiction under RCW
80.01.040,
80.04.010, and chapter
80.28 RCW.
NEW SECTION
WAC 480-106-010Obligations of qualifying facilities to the utility.
(1) The owner or operator of a qualifying facility purchasing or selling electricity under this chapter must execute a written agreement with the utility stating at a minimum that:
(a) The owner or operator of the qualifying facility will construct and operate all interconnected qualifying facilities within its control in accordance with all applicable federal, state, and local laws and regulations to ensure system safety and reliability of interconnected operations;
(b) The qualifying facility will furnish, install, operate, and maintain in good order and repair, and without cost to the utility, such switching equipment, relays, locks and seals, breakers, automatic synchronizers, and other control and protective apparatus determined by the utility to be reasonably necessary for the safe and reliable operation of the qualifying facility in parallel with the utility's system, or the qualifying facility may contract for the utility to do so at the qualifying facility's expense; the qualifying facility's delivery of electricity to the utility must be at a voltage, phase, power factor, and frequency as reasonably specified by the utility; and
(c) The utility at all times must have access to all switching equipment capable of isolating the qualifying facility from the utility's system.
(2) To the extent that the qualifying facility will assume responsibility for the safe operation of the interconnection facilities, the qualifying facility is not required to assume responsibility for negligent acts of the utility.
(3) The utility may operate the switching equipment described in subsection (1)(c) of this section if, in the sole opinion of the utility, continued operation of the qualifying facility in connection with the utility's system may create or contribute to a system emergency. Such a decision by the utility is subject to commission verification in accordance with WAC 480-106-070 System emergencies. The utility must endeavor to minimize any adverse effects of such operation on the owner or operator of a qualifying facility.
NEW SECTION
WAC 480-106-020Obligations of the utility to qualifying facilities.
(1) Obligation to purchase from qualifying facilities: A utility must purchase, in accordance with WAC 480-106-050 Rates for purchases from qualifying facilities, any energy and capacity that is made available from a qualifying facility:
(a) Directly to the utility; or
(b) Indirectly to the utility in accordance with subsection (4) of this section.
(2) Obligation to sell to qualifying facilities: A utility must sell to any qualifying facility, in accordance with WAC 480-106-060 Rates for sales to qualifying facilities, any energy and capacity requested by the qualifying facility at the same rates, terms, and conditions that are available to other customers of the utility in the same customer class who do not generate electricity.
(3) Obligation to interconnect: A utility must make all the necessary interconnections with any qualifying facility to accomplish purchases or sales under this section. The qualifying facility must pay for interconnection costs to the extent required under WAC 480-106-080 Interconnection costs.
(4) Transmission to other electrical companies: If a qualifying facility agrees, a utility that would otherwise be obligated to purchase energy, capacity, or both, from such qualifying facility must transmit energy, capacity, or both, to any other electric service provider at the expense of the qualifying facility. The qualifying facility's use of a utility's transmission facilities shall be pursuant to the utility's open access transmission tariff. Any utility to which energy or capacity generated by a qualifying facility and transmitted to such utility over the facilities of another utility shall purchase the energy or capacity under this subpart as if the qualifying facility were supplying energy or capacity directly to the purchasing utility. The rate the purchasing utility pays the qualifying facility shall be adjusted to reflect line losses and shall not include any charges for transmission.
(5) Parallel operation: Each utility must offer to operate in parallel with a qualifying facility if the qualifying facility complies with all applicable standards established in this section.
NEW SECTION
WAC 480-106-030Tariff for purchases from qualifying facilities.
(1) Tariff for purchases from qualifying facilities required: Each utility must file a tariff consistent with this chapter and with WAC 480-80-102 Tariff content.
(2) Contracting procedures:
(a) In the tariff required in subsection (1) of this section, each utility must file contracting procedures that sets forth the obligations of the utility and the qualifying facility entering into contracts for the purchase and sale of qualifying facility output. Such contracting procedures shall provide that a legally enforceable obligation must be memorialized in an executed written contract between the utility and the qualifying facility prior to commercial operation;
(b) A legally enforceable obligation may exist prior to an executed written contract. If an irreconcilable disagreement arises during the contracting process, the qualifying facility or the purchasing utility may petition the commission to resolve the disagreement, including making a determination about whether the qualifying facility owner is entitled to a legally enforceable obligation and the date that such obligation occurred based on the specific facts and circumstances of each case.
(3) Schedule of estimated avoided costs offering standard rates for purchases from qualifying facilities of five megawatts or less: In the tariff required in subsection (1) of this section, all utilities must file a schedule of estimated avoided costs offering standard rates for purchases from qualifying facilities with nameplate capacities of five megawatts or less, as described in WAC 480-106-040 Schedules of estimated avoided costs. Qualifying facility developers proposing projects with a design capacity of five megawatts or less may choose to receive a purchase price for power that is set forth in such standard tariff.
(4) Standard contract provisions for purchases from qualifying facilities of five megawatts or less: In the tariff required in subsection (1) of this section, each utility shall specify the information required for qualifying facilities with nameplate capacities of five megawatts or less to obtain draft executable contracts. All utilities shall file standard contract provisions for purchases from a qualifying facility with a capacity of five megawatts or less. Standard contracts may include commercially reasonable milestone events and cure periods including, but not limited to, the qualifying facility's:
(a) Provision of any necessary credit support, necessary governmental permits and authorizations, evidence of construction financing, and as-built supplements;
(b) Completion of interconnection facilities;
(c) Completion of start-up testing; and
(d) Achievement of mechanical availability of operation.
(5) Information and term sheets for qualifying facilities with capacities of greater than five megawatts: In the tariff required in subsection (1) of this section, each utility shall specify the information required for qualifying facilities of greater than five megawatts to obtain draft and executable contracts. All utilities shall post upon the utility's web site nonbinding term sheets with limited contract provisions for qualifying facilities with capacities greater than five megawatts. Such contract provisions need not be the same as the standard contract provisions required pursuant to subsection (3) of this section, but shall be consistent with the commission's rules.
NEW SECTION
WAC 480-106-040Schedules of estimated avoided costs.
(1) Filing requirement. A utility must file by November 1st of each year, as a revision to its tariff described in WAC 480-106-030 Tariff for purchases from qualifying facilities, a schedule of estimated avoided costs that identifies, both separately and combined, its avoided cost of energy and its avoided cost of capacity. All schedules of estimated avoided costs must include:
(a) Identification of avoided energy: An estimated avoided cost of energy based on the utility's current forecast of market prices for power stated on a cents per kilowatt-hour or dollars per megawatt-hour basis for the current calendar year and each of the next fifteen years. In determining its avoided cost of energy, the utility may incorporate the daily and seasonal peak and off-peak period prices, by year; and
(b) Identification of avoided capacity: An estimated avoided cost of capacity expressed in dollars per megawatt based on the projected fixed cost of the next planned capacity addition identified in the succeeding ten years in the utility's most recently acknowledged integrated resource plan filed pursuant to WAC 480-100-238 Integrated resource planning, and such identification must include the following:
(i) Identification of capacity cost: A utility must identify the projected fixed costs of its next planned capacity addition based on either the estimates included in its most recently filed integrated resource plan or the most recent project proposals received pursuant to an RFP issued consistent with chapter 480-107 WAC, whichever is most current; and
(ii) Proxy for planned market purchases: If the utility's most recently acknowledged integrated resource plan identifies the need for capacity in the form of market purchases not yet executed, then the utility shall use the projected fixed costs of a simple-cycle combustion turbine unit as identified in the integrated resource plan as the avoided capacity cost of the market purchases.
(c) Levelized avoided cost pricing: The avoided cost of capacity must account for any differences between the in-service date of the qualifying facility and the date of the next planned generating unit by levelizing the lump sum present value of the avoided cost of capacity discounted by the utility's commission-approved weighted average cost of capital.
(2) Differentiating among qualifying facilities. A utility's estimated avoided cost of capacity may differentiate among qualifying facilities based on the supply characteristics of different technologies of qualifying facilities for purposes of calculating the estimated avoided cost of capacity.
(3) Schedule revisions. A utility may file to revise its schedule of estimated avoided costs prior to its next annual filing, provided that the commission may not allow such tariff revision to become effective until at least sixty days after such filing. Filing a revised schedule of estimated avoided costs in this subsection does not relieve the utility of its annual obligation to file a schedule in subsection (1) of this section if such filing occurs more than thirty days prior to such annual tariff filings.
NEW SECTION
WAC 480-106-050Rates for purchases from qualifying facilities.
(1) Rates for purchases by a utility:
(a) Rates must be just and reasonable to the utility's customers and in the public interest;
(b) Rates must not discriminate against qualifying facilities; and
(c) Rates must not exceed the avoided cost to the utility of alternative energy, capacity, or both.
(2) Establishing rates:
(a) A rate for purchase from qualifying facilities satisfies the requirements of subsection (1) of this section if the rate equals the utility's avoided costs after consideration, to the extent practicable, of the factors set forth in WAC 480-106-040 Schedules of estimated avoided costs, and in subsection (5) of this section.
(b) When a utility bases its purchase rates on estimates of avoided costs over a specific term of the contract or other legally enforceable obligation, the rates do not violate these rules if any payment under the obligation differs from avoided costs at the time of delivery.
(3) Rates for purchases - Time of calculation: Except for the purchases made under a standard rates tariff pursuant to subsection (4) of this section, each qualifying facility shall have the option to:
(a) Provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility's avoided cost of energy at the time of delivery; or
(b) Provide energy, capacity, or both, pursuant to a legally enforceable obligation, in which case the rates for purchases shall, at the option of the qualifying facility exercised prior to the beginning of the specified term, be based on:
(i) The avoided costs of energy and capacity calculated at the time of delivery; or
(ii) The avoided costs of energy and capacity projected over the life of the obligation and calculated at the time the parties incur the obligation.
(4) Standard rates for purchases from qualifying facilities with capacities five megawatts or less: A utility shall establish standard rates for its purchases from qualifying facilities with capacities of five megawatts or less as follows:
(a) A utility must file the schedule of estimated avoided costs containing standard rates for purchases pursuant to WAC 480-106-040 Schedules of estimated avoided costs as a revision to its tariff required in WAC 480-106-030 Tariff for purchases from qualifying facilities.
(i) The utility's standard rates for purchases must offer fixed rates to a new qualifying facility for a term of fifteen years beginning on the date of contract execution, but not less than twelve years from the commercial operation date of the qualifying facility.
(ii) The utility's standard rates for purchases must offer fixed rates to an existing qualifying facility entering into a new agreement with the utility for a term of ten years.
(iii) Qualifying facilities that do not meet the greenhouse gas emissions performance standard established under RCW
80.80.040 are limited to contract terms of less than five years.
(b) A utility's standard rates for purchases must provide the qualifying facility the option to either:
(i) Provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility's avoided cost of energy at the time of delivery; or
(ii) Provide energy, capacity, or both, pursuant to a legally enforceable obligation, in which case the rates for purchases shall, at the option of the qualifying facility exercised prior to the beginning of the specified term, be based on:
(A) The avoided energy and capacity calculated at the time of delivery; or
(B) The avoided costs of energy and capacity identified in the utility's schedule of estimated avoided costs in effect when the parties incur the obligation.
(c) Except where expressly conveyed to the utility for additional consideration, the qualifying facility shall own the renewable energy certificates and any other environmental attributes associated with the production from such qualifying facility unless the standard rates are based on the avoided capacity costs of an eligible renewable resource as defined in RCW
19.285.030. During any period in which the qualifying facility receives standard rates that are based on the avoided capacity costs of an eligible renewable resource, the utility shall receive the renewable energy certificates produced by the qualifying facility at no additional cost to the utility.
(d) The standard rate may account for the integration costs associated with variable technologies, as approved by the commission.
(5) Negotiated rates for qualifying facilities with capacities greater than five megawatts: Each utility shall file and obtain commission approval of its avoided cost rate methodology for qualifying facilities with capacity greater than five megawatts. When negotiating rates for purchases from qualifying facilities with capacities greater than five megawatts, to the extent practicable, the parties should consider the following factors:
(a) The data the utility provided to the commission pursuant to WAC 480-106-040 Schedules of estimated avoided costs, and the commission's evaluation of the data;
(b) The availability of energy, capacity, and ancillary services from a qualifying facility during the system daily and seasonal peak periods, including:
(i) The utility's ability to dispatch the qualifying facility;
(ii) The qualifying facility's expected or demonstrated reliability;
(iii) The terms of any proposed contract or other legally enforceable obligation;
(iv) The extent to which the parties can usefully coordinate their respective scheduled outages;
(v) The usefulness of energy, capacity, or both, supplied from a qualifying facility during system emergencies, including the qualifying utility's ability to separate its load from its generation;
(vi) The individual and aggregate value of energy and capacity from qualifying facilities on the utility's system; and
(vii) The smaller capacity increments and the shorter lead times available, if any, with additions of capacity from qualifying facilities.
(c) The relationship of the availability of energy, capacity, or both, from the qualifying facility as derived in (b) of this subsection, to the ability of the utility to avoid costs, including the deferral of capacity additions and the reduction of fossil fuel use; and
(d) The costs or savings resulting from variations in line losses from those that would have existed in the absence of purchases from a qualifying facility.
NEW SECTION
WAC 480-106-060Rates for sales to qualifying facilities.
(1) General rules:
(a) Rates for sales:
(i) Shall be just and reasonable, and in the public interest; and
(ii) Shall not discriminate against any qualifying facility in comparison to rates for sales to other customers served by the utility.
Utilities may not deny service to a customer for which the customer otherwise qualifies based on the presence of a qualifying facility, including interruptible power service.
(b) Rates for sales that are based on accurate data and consistent system-wide costing principles will not be considered to discriminate against any qualifying facilities if those rates apply to the utility's other customers with similar load or other cost-related characteristics.
(2) Additional services to be provided to qualifying facilities:
(a) Upon request by a qualifying facility, each utility will provide:
(i) Supplementary power;
(ii) Back-up power;
(iii) Maintenance power; and
(iv) Interruptible power.
(b) The commission may waive any requirement of (a) of this subsection if, after notice in the area served by the utility and after opportunity for public comment, the utility demonstrates and the commission finds that compliance with such requirement will:
(i) Impair the utility's ability to render adequate service to its customers; or
(ii) Place an undue burden on the utility.
(3) The rate for sale of back-up power or maintenance power:
(a) Shall not be based on an assumption, unless supported by factual data, that forced outages or other reductions in electric output by all qualifying facilities on a utility's system will occur simultaneously, or during the system peak, or both; and
(b) Must take into account the extent to which scheduled outages of the qualifying facilities can be usefully coordinated with scheduled outages of the utility's facilities.
NEW SECTION
WAC 480-106-070System emergencies.
(1) Qualifying facility obligation to provide power during system emergencies: A qualifying facility may be required to provide energy or capacity to a utility during a system emergency only to the extent:
(a) Provided by agreement between the qualifying facility and utility; or
(b) Ordered under section 202(c) of the Federal Power Act.
(2) Discontinuance of purchases and sales during system emergencies: During any system emergency, a utility may, in a nondiscriminatory fashion, discontinue:
(a) Purchases from a qualifying facility if such purchases would contribute to such emergency; and
(b) Sales to a qualifying facility provided that such discontinuance is on a nondiscriminatory basis.
(3) System emergencies resulting in utility action under this chapter are subject to verification by the commission upon request by either party to the power contract.
NEW SECTION
WAC 480-106-080Interconnection costs.
(1) Any costs of interconnection are the responsibility of the owner or operator of the qualifying facility entering into a power contract under this chapter. The utility must assess all reasonable interconnection and necessary system or network upgrade costs the utility incurs against a qualifying facility on a nondiscriminatory basis.
(2) The owner or operator of the qualifying facility must reimburse the utility for any reasonable interconnection costs the utility may incur. Such reimbursement may be made, at the utility's election:
(a) At the time the utility invoices the owner or operator of the qualifying facility for interconnection costs incurred by the utility; or
(b) Over an agreed period not greater than the length of any contract between the utility and the qualifying facility.
Chapter 480-107 WAC
ELECTRIC COMPANIES—PURCHASES OF ELECTRICITY ((FROM QUALIFYING FACILITIES AND INDEPENDENT POWER PRODUCERS AND PURCHASES OF ELECTRICAL SAVINGS FROM CONSERVATION SUPPLIERS))
AMENDATORY SECTION(Amending WSR 06-08-025, filed 3/28/06, effective 4/28/06)
WAC 480-107-001Purpose and scope.
(1) The rules in this chapter require utilities to solicit bids, rank project proposals, and identify any bidders that meet the minimum selection criteria. The rules in this chapter do not establish the sole procedures utilities must use to acquire new resources. Utilities may construct electric resources, operate conservation programs, purchase power through negotiated contracts, or take other action to satisfy their public service obligations.
(2) The commission will consider the information obtained through these bidding procedures when it evaluates the performance of the utility in rate and other proceedings.
(((3) The rules in this chapter are consistent with the provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA), Title II, sections 201 and 210, and related regulations promulgated by the Federal Energy Regulatory Commission (FERC) in 18 C.F.R. Part 292. To the extent of any conflict between these rules and PURPA, or the related rules promulgated by FERC in 18 C.F.R. Part 292, PURPA and those related rules control. Purchase of electric power under these rules satisfies a utility's obligation to purchase power from qualifying facilities under section 210 of PURPA.))
AMENDATORY SECTION(Amending WSR 06-08-025, filed 3/28/06, effective 4/28/06)
WAC 480-107-007Definitions.
"Affiliate" means a person or corporation that meets the definition of an "affiliated interest" in RCW
80.16.010.
"Avoided costs" means the incremental costs to a utility of electric energy, electric capacity, or both, that the utility would generate itself or purchase from another source, but for purchases to be made under these rules. A utility's avoided costs are the prices, terms and conditions, including the period of time and the power supply attributes, of the least cost final contract entered into as a result of the competitive bidding process described in these rules. If no final contract is entered into in response to a request for proposal (RFP) issued by a utility under these rules, the utility's avoided costs are the lesser of:
(((1)))(a) The price, terms and conditions set forth in the least cost project proposal that meets the criteria specified in the RFP; or
(((2)))(b) Current projected market prices for power with comparable terms and conditions.
(("Back-up power" means electric energy or capacity supplied by a utility to replace energy ordinarily supplied by utility-owned generation or purchased through contracts that is unavailable due to an unscheduled outage.))
"Commission" means the Washington utilities and transportation commission.
"Conservation" means any reduction in electric power consumption that results from increases in the efficiency of energy use, production or distribution, or from demand response, load management or efficiency measures that reduce peak capacity demand.
"Conservation supplier" means a third party supplier or utility affiliate that provides equipment or services that save capacity or energy.
(("Economic dispatch" means modifying the scheduling of power purchases from a generating facility within contractually specified limits to minimize the costs of delivering electricity.))
"Generating facilities" means plant and other equipment used to generate electricity purchased through contracts entered into under these rules.
"Independent power producers" means an entity that owns generating facilities or portions thereof that are not included in a utility's rate base and that are not qualifying facilities as defined in this section.
"Integrated resource plan" or "IRP" means the filing made every two years by a utility in accordance with WAC 480-100-238 Integrated resource planning.
(("Interruptible power" means electric energy or capacity supplied to a utility by a generating facility, the availability of which may be interrupted under certain conditions.
"Maintenance power" means electric energy or capacity supplied by a utility during scheduled outages of a generating facility.))
"Project developer" means an individual, association, corporation, or other legal entity that can enter into a power or conservation contract with the utility.
"Project proposal" means a project developer's document containing a description of a project and other information responsive to the requirements set forth in a request for proposal, also known as a bid.
"Qualifying facilities" means generating facilities that meet the criteria specified by the FERC in 18 C.F.R. Part 292 Subpart B.
"Request for proposals" or "RFPs" means the documents describing a utility's solicitation of bids for delivering electric capacity, energy, or capacity and energy, or conservation.
"Resource block" means the deficit of capacity and associated energy that the IRP shows for the near term.
"Subsidiary" means any company in which the utility owns directly or indirectly five percent or more of the voting securities, and that may enter a power or conservation contract with that electric utility. A company is not a subsidiary if the utility can demonstrate that it does not control that company.
(("Supplementary power" means electric energy or capacity supplied by a utility that is regularly used by a generating facility in addition to that which the facility generates itself.))
"Utility" means an electrical company as defined by RCW
80.04.010.
AMENDATORY SECTION(Amending WSR 06-08-025, filed 3/28/06, effective 4/28/06)
WAC 480-107-025Contents of the solicitation.
(1) The RFP must identify the resource block, consisting of the overall amount and duration of power the utility is soliciting, the initial estimate of avoided cost schedule as calculated in WAC ((480-107-055))480-106-040 Avoided cost schedule, and any additional information necessary for potential bidders to make a complete bid.
(2) The RFP must document that the size of the resource block is consistent with the range of estimated new resource needs identified in the utility's integrated resource plan.
(3) The RFP must explain general evaluation and ranking procedures the utility will use in accordance with WAC 480-107-035 Project ranking procedure. The RFP must also specify any minimum criteria that bidders must satisfy to be eligible for consideration in the ranking procedure.
(4) The RFP must specify the timing of process including the solicitation period, the ranking period, and the expected selection period.
(5) The RFP must identify all security requirements and the rationale for them.
(6) Utilities are encouraged to consult with commission staff during the development of the RFP. Utilities, at their own discretion, may submit draft RFPs for staff review prior to formally submitting an RFP to the commission.
REPEALER
The following sections of the Washington Administrative Code are repealed:
WAC 480-107-055 | Schedules of estimated avoided cost. |
WAC 480-107-085 | Obligations of generating facilities to the utility. |
WAC 480-107-095 | Obligations of the utility to qualifying facilities. |
WAC 480-107-105 | Rates for sales to qualifying facilities. |
WAC 480-107-999 | Adoption by reference. |