N.M. Admin. Code § 17.9.570.11 - DETERMINATION OF RATES FOR PURCHASES FROM QUALIFYING FACILITIES
A.
General: A utility shall pay a qualifying facility avoided costs
for energy or capacity purchased from the qualifying facility. Avoided costs
are defined in Subsection A of
17.9.570.7 NMAC. The energy rate
represents avoided energy costs for the purposes of 17.9.570 NMAC. The avoided
energy or capacity rate determined as provided herein represents avoided energy
or avoided capacity costs for the purposes of 17.9.570
NMAC.
B.
Energy rate:
(1) Within one year
of the approval of this rule, each utility subject to the commission's
jurisdiction shall apply for approval of a tariff that specifies a method for
determining avoided energy costs as specified herein to establish the avoided
energy cost rates paid by that utility to qualifying facilities.
(a) A utility participating in the Western
EIM may establish the energy rate to be paid for power supplied by a qualifying
facility by reference to the appropriate Western EIM locational marginal price
determined on an hourly basis if such locational marginal price is
representative of the utility's avoided cost. To implement this option for the
avoided cost energy rate, the utility must set forth in its current tariff on
file with the commission the applicable Western EIM pricing location.
(b) A utility participating in the SPP may
establish the energy rate to be paid for power supplied by a qualifying
facility by reference to the appropriate SPP locational marginal price if such
locational marginal price is representative of the utility's avoided cost, as
defined herein. To implement this option for the avoided cost energy rate, the
utility must set forth in its current tariff on file with the commission the
applicable SPP pricing location.
(c) Any utility that participates in a market
has the flexibility to establish avoided energy cost rates based on the rule
criteria. Any utility that does not participate in the Western EIM or the SPP
may establish avoided energy cost rates based on:
(i) Locational marginal prices, if any are
available;
(ii) Market hub
prices;
(iii) Formulas based on
natural gas prices;
(iv)
Competitive solicitations; or
(v)
Mutual agreement between the qualifying facility and the utility.
(2) In its application
for approval of the tariff, each utility applying for approval of a method to
calculate avoided energy cost rates for purchases shall specify the method to
be used and explain why it results in an accurate approximation of the
utility's avoided energy costs.
(3)
The avoided energy cost rates calculated in accordance with the method approved
under Paragraph (1) of Subsection B of
17.9.570.11 NMAC shall be applied
to both energy acquired on an as-available basis and energy acquired pursuant
to a legally enforceable obligation.
(4) Until the commission approves a utility's
tariff under Paragraph (1) of Subsection B of
17.9.570.11 NMAC, the utility
shall pay avoided cost rates calculated under Subsection C of
17.9.570.11 NMAC for both energy
purchased on an as-available basis and energy purchased pursuant to a legally
enforceable obligation. After the approval of the utility's tariff under
Paragraph (1) of Subsection B of
17.9.570.11 NMAC, the utility
shall pay the avoided cost rates calculated under the approved tariff for both
energy purchased on an as-available basis and energy purchased pursuant to a
legally enforceable obligation.
C. Until approval of a utility's tariff under
Paragraph (1) of Subsection B
17.9.570.11 NMAC, the avoided cost
rate to be paid for the energy supplied by a qualifying facility in any month
shall be that respective month's rate from the utility's current schedule on
file with the commission. Each utility shall file with the commission its
schedule containing monthly energy rates that will be applicable to the next
12-month period. These monthly energy rates shall be listed for each voltage
level of interconnection and shall be expressed in cents/kWh. Each month's
energy rate contained in the schedule shall be the average of the economy
energy purchases by the utility for the corresponding month of the immediately
preceding 12-month period. In the event a utility does not engage in economy
energy purchases in any given month, the energy rate to be included in its
schedule for that month shall be either: the monthly average of hourly
incremental energy costs including variable operation and maintenance expenses
for generating utilities, or the energy charge of the highest energy cost
contract as adjusted for appropriate retail fuel and purchase power pass
through for non-generating utilities.
(1) As
applicable, those utilities with retail time-of-use rates on file with the
commission shall file schedules reflecting monthly energy rates calculated for
peak periods only and off-peak periods only which shall be applied to
qualifying facilities whose generation is limited to peak periods only or off-
peak periods only. Peak and off-peak periods shall be as defined in the
utility's retail tariffs on file with the commission.
(2) Within 60 days of the effective date of
revised 17.9.570 NMAC each electric utility subject to the rule shall file with
the commission the schedule containing rates to be offered along with detailed
supporting workpapers showing the input data and calculations, if applicable.
After the first submittal each utility shall update its filing within 30 days
from the last day of its fiscal year.
(3) To the extent applicable, variable
operation and maintenance rates used for the above computations shall be the
basis for requested variable operation and maintenance rates in the utility's
future rate cases.
(4) The energy
rate contained in the schedules shall include the savings attributable to the
avoidance of losses due to transmission, distribution, and transformation as
applicable for different voltage levels of interconnection. These transmission,
distribution, and transformation loss avoidance savings for different voltage
levels of interconnection shall be obtained from the utility's filing in the
last commission-decided rate case, and those figures shall be shown in the
utility's submittal.
D.
Negotiations. Notwithstanding the provisions of 17.9.570 NMAC, a utility and
qualifying facility may at the qualifying facility's option negotiate rates for
the power to be supplied by the qualifying facility. Such negotiated rates
shall be filed with the commission within 30 days of the execution of the
contract. The contract shall not contain any rate which is higher than the
utility's avoided costs as defined in 17.9.570 NMAC.
Notes
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