65-407 C.M.R. ch. 360, § 4 - ARRANGEMENTS BETWEEN ELECTRIC UTILITIES AND QUALIFYING FACILITIES

A. Scope

1. Applicability. This section applies to the regulation of sales and purchases between qualifying facilities and electric or transmission and distribution utilities, except as provided in section 8 below.

2. Negotiated rates or terms. Nothing in this rule limits the authority of any electric or transmission and distribution utility or any qualifying facility to agree to a rate for any purchase, or terms or conditions relating to any purchase, which differ from the rate or terms or conditions which would otherwise be established by this chapter; or affects the validity of any contract entered into between a qualifying facility and an electric or transmission and distribution utility for any purchase.

3. Generation or distribution for own use. Notwithstanding any provision of this chapter any small power producer or cogenerator may generate or distribute electricity through its private property or its associates' private property solely for its use, the use of its tenants, or the use of its associates without approval or regulation by the Commission.

B. Electric Utility Obligations

1. Obligation to purchase from qualifying facilities

a. Existing contracts. Each electric or transmission and distribution utility must purchase from qualifying facilities pursuant to the terms established in an existing contract, or, as applicable, pursuant to rates established by the Commission in accordance with this chapter.

b. Purchases not pursuant to existing contracts. Each electric or transmission and distribution utility shall purchase any energy which is made available from a qualifying facility at a price and under terms agreeable to the utility and the qualifying facility or at rates for short-term energy purchases as established by the Commission in accordance with the provisions of this chapter. The utility obligation to purchase energy which is made available from a qualifying facility at short-term energy rates shall remain effective until the date of retail access.

2. Obligation to sell to qualifying facilities. Prior to the date of retail access, each electric or transmission and distribution utility shall sell to any qualifying facility, in accordance with this chapter, any energy and capacity and transmission and distribution services requested by the qualifying facility, provided the qualifying facility is located within the utility's service territory. After the date of retail access, each electric or transmission and distribution utility shall sell to any qualifying facility any transmission and distribution service available to other retail customers requested by the qualifying facility, provided the qualifying facility is located within the utility's service territory.

3. Obligation to interconnect

a. Any electric or transmission and distribution utility shall make such interconnections with any qualifying facility as may be necessary to accomplish purchases or sales by any utility under this chapter provided, however, that no interconnection shall be made unless the interconnecting utility inspects the interconnection facility and determines that the facility:

i complies with the requirements of the National Electric Safety Code;

ii provides reasonable protection of the interconnecting utility's generating, transmission and distribution systems; and

iii is designed to prevent a violation of the prohibition contained on § 4(C)(1)(c). The obligation to pay for any interconnection costs shall be determined in accordance with subsection F of this section.

b. No interconnecting utility may unreasonably refuse to inspect an interconnection facility nor may a utility unreasonably delay the performance of any such inspection.

4. Parallel operation. Each electric utility shall offer to operate in parallel with a qualifying facility.

C. Rates for Purchases

1. General Provisions

a. Rates for purchases shall:

i be just and reasonable with respect to the customers of the electric or transmission and distribution utility and in the public interest; and

ii not discriminate against qualifying cogeneration and small power production facilities.

b. Nothing in this section requires any electric or transmission and distribution utility to pay more than its avoided costs for purchases nor shall this chapter be construed to limit or otherwise discourage an electric or transmission and distribution utility or qualifying facility from negotiating any reasonable price or other contract terms agreeable to the utility and the qualifying facility.

2. Short term energy purchases

a. Prior to the date of retail access, with respect to purchases of energy made by electric or transmission and distribution utilities from qualifying facilities on an as available basis the rates established by the Commission shall equal the avoided energy costs determined in accordance with section 3 after consideration of the factors set forth in paragraphs 4 of this subsection.

b. For periods after the date of retail access, the Commission shall set rates in accordance with the following procedures.

(i) Filing. On January 15, 2000 and on January 15 of each succeeding year, each transmission and distribution utility that has a qualifying facility contract that contemplates Commission-established short term energy rates for the 12 month period beginning March of that year shall file rates with the Commission calculated as described in this subparagraph and serve copies of the filing on a predetermined service list. The short term energy rates shall be calculated as the sale prices accepted pursuant to the sale of the rights to the energy component of qualifying facilities contracts pursuant to 35-A M.R.S.A. §3204(4) for each month during the 12 month period beginning March of that year. The short term energy rates shall be time differentiated for the same periods and expressed on a cents-per-kilowatt hour basis with the same number of significant digits as in short-term energy rates in effect as of January 1, 1997.

(ii) Procedure. Any interested person may object to the utility's proposed short term energy rates by demonstrating that the rates are not reasonably representative of short-term wholesale energy costs in Maine or are otherwise inconsistent with law. Objections must be filed by February 15. If no objections are filed, the short term energy rates shall become effective on March 1 unless suspended by the Commission or its Director of Technical Analysis. If an objection is filed, the Commission or its Director of Technical Analysis may suspend the filing. In the event the filing is suspended, the Commission will adopt procedures for establishing short-term energy rates.

3. Standard rates for energy and capacity purchases

a. Prior to the date of retail access, standard rates for purchases of energy by a utility will be established by the Commission in accordance with section 3 after consideration of the factors in paragraphs 4 and 5 of this subsection. These rates will be available to any qualifying facility with an installed capacity of 1,000 kilowatts or less that elects to sell energy as available and that has been unable to reach a negotiated price with the electric or transmission and distribution utility.

b. Prior to the date of retail access, standard rates for purchases of energy and capacity sold by a qualifying facility pursuant to a 5, 10, 15, or 18-year contract will be established by the Commission after review of the filing of avoided cost data filed by the utility pursuant to section 3 of this chapter and consideration of the factors in paragraphs 4 and 5 of this subsection. These rates will be available to any qualifying facility that has an installed capacity of 1,000 kilowatts or less that has been unable to negotiate a contract with the electric utility. Separate time differentiated rates shall be established.

c. Prior to the date of retail access, standard rates established pursuant to subsections (a) and (b) above will correspond to the blocks described in section 3. In determining whether the standard rates for a block have been committed and thus no longer available to qualifying facilities, the Commission will compare the total avoided cost associated with a block to the total estimated cost of the purchases from qualifying facilities that have executed contracts since the standard rates were established.

d. For periods after the date of retail access, the Commission shall set standard rates for purchase of energy and capacity sold by a qualifying facility with an installed capacity of 1,000 kilowatts or less in accordance with the following procedures:

i. Filing. On January 15, 2000 and on January 15 of each year following a new sale of the rights to capacity and energy of qualifying facility contracts pursuant to 35-A M.R.S.A. §3204(4), each transmission and distribution utility that has a qualifying facility contract that contemplates Commission-established standard rates for purchases of energy and capacity shall file rates with the Commission calculated as described in this subparagraph and serve copies of the filing on a predetermined service list. The capacity and energy rates shall be calculated as the sale prices accepted pursuant to the sale of the rights to the energy and capacity components of qualifying facility contracts pursuant to 35-A M.R.S.A. §3204(4) for each month beginning March 1 and continuing until the end of the sale period. The capacity and energy rates shall be time differentiated.

ii. Procedure. Any interested person may object to the utility's proposed capacity and energy rates by demonstrating that the rates are not reasonably representative of wholesale capacity and energy costs in Maine or are otherwise inconsistent with law. Objections must be filed by February 15. If no objections are filed, the capacity and energy rates shall become effective on March 1 unless suspended by the Commission or its Director of Technical Analysis. If an objection is filed, the Commission or its Director of Technical Analysis may suspend the filing. In the event the filing is suspended, the Commission will adopt procedures for establishing capacity and energy rates.

4. Factors affecting rates for purchases of energy. In determining rates for purchase of energy, the Commission may consider the following factors to the extent practicable.

a. The availability of energy from a qualifying facility during on-peak and off-peak periods.

b. The ability of the utility to dispatch the qualifying facility. If the utility is able to dispatch the output of the qualifying facility, without reducing the total energy production of the qualifying facility, the energy portion of the standard rates established by the Commission pursuant to paragraph 3(a) and (b) shall be increased 3 percent unless otherwise ordered by the Commission.

c. The extent to which scheduled outages of the qualifying facility can be usefully coordinated with scheduled outages of the utility's facilities. If the utility is able to schedule the maintenance of the qualifying facility, the energy portion of the standard rates established by the Commission pursuant to paragraph 3(a) and (b) shall be increased 1 percent unless otherwise ordered by the Commission.

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. Unless otherwise ordered by the Commission, the rates established for purchases from any specific qualifying facility shall be increased to reflect the same level of line losses as used to establish retail rates for any class of customer that is served at a similar voltage level.

e. The usefulness of energy supplied from a qualifying facility during system emergencies, including its ability to separate its load from its generation.

5. Factors affecting rates for purchases of energy and capacity. In establishing rates for the purchase of capacity and energy the Commission may consider the factors discussed in subsection 4 above and, in addition, may consider the following factors to the extent practicable.

a. The availability of capacity from a qualifying facility during on-peak and off-peak periods.

b. The expected or demonstrated reliability of the qualifying facility.

c. The terms of any contract or other legally enforceable obligation, including the duration of the obligation, termination notice requirement and sanctions for non-compliance;

d. The individual and aggregate value of capacity from qualifying facilities on the electric utility's system.

6. When the Commission determines standard rates pursuant to this section, the Commission will aggregate qualifying facilities and treat them as one in considering the factors listed in paragraphs 4 and 5.

D. Periods During Which Purchases Are Not Required

1. Any electric or transmission and distribution utility which gives notice pursuant to paragraph 2 of this subsection will not be required to purchase electric energy or capacity during any period during which, due to operational circumstances, purchases from qualifying facilities can reasonably be expected to result in negative avoided costs.

2. Any electric or transmission and distribution utility seeking to invoke paragraph 1 of this subsection must notify the Commission and each affected qualifying facility at least 48 hours prior to period described above. Such notice shall include a description of the operational circumstances, and the duration of the period.

3. Any electric or transmission and distribution utility which fails to comply with the provisions of paragraph 2 of this subsection or which unreasonably invokes the provisions of this subsection will be required to pay the same rate for such purchase of energy or capacity as would be required had the period described in paragraph 1 of this subsection not occurred.

E. Additional Services to be Provided to Qualifying Facilities

1. Prior to the date of retail access, upon request of a qualifying facility in the utility's service territory, each electric or transmission and distribution utility shall provide at reasonable rates:

a. supplementary power;

b. back-up power;

c. maintenance power; and

d. interruptible power.

After the date of retail access, upon request of a qualifying facility, each electric or transmission and distribution utility shall provide at reasonable rates transmission and distribution services.

2. The Commission may waive any requirement of subsection (E)(1) of this section if, after notice in the area served by the utility and after opportunity for a public hearing, Commission finds that compliance with such requirement will:

a. impair the utility's ability to render adequate service to its customers; or

b. place an undue burden on the utility.

F. Interconnection Costs

1. Obligation to pay. Each qualifying facility shall be obligated to pay all interconnection costs as defined in this chapter.

Notes

65-407 C.M.R. ch. 360, § 4