(a) An electric utility shall identify the
costs of integrating the qualifying facility into the electric utility's system
and shall quantify the benefits derived from integrating the qualifying
facility into the electric utility's system. If the identified costs of
integration exceed the quantified benefits of integration, the electric utility
may assess integration fees to the qualifying facility. If the quantified
benefits exceed the identified costs, the electric utility shall make
integration payments to the qualifying facility.
Costs used to calculate integration fees
or integration payments include only costs that are reasonably necessary under
accepted industry standards for maintaining the safety, integrity, and
reliability of the electric utility's system. However, the costs must be
(1) directly related to and necessary for the
operation of the qualifying facility within the electric utility's system;
(2) comprised of the net increase
or decrease to the corresponding costs which the electric utility would have
incurred if it had not engaged in interconnected operations with a qualifying
facility, but instead generated an equivalent amount of electric energy itself
or purchased an equivalent amount of electric energy or capacity from other
(3) not duplicative
of the costs associated with facilities or measures used by the utility for
reasons other than the integration of the qualifying
costs and quantified benefits may not include any costs or benefits used to
calculate avoided cost rates or interconnection charges.
(d) Integration fees and payments must be
just and reasonable and in the public interest and must not discriminate
against the qualifying facility.
(e) If an electric utility uses facilities or
measures to support the integration of more than one qualifying facility or
other generation facility, the electric utility must fairly allocate the costs
among the qualifying facilities and generation facilities.