ML20205D140

Forwards State of Tx Public Utils Commission Substantive Rule 23.66 Re Wheeling for Cogenerators

ML20205D140
Person / Time
Site:	Comanche Peak
Issue date:	10/14/1988
From:	Adragna J MILLER, BALIS & O'NEIL
To:	Vogler B NRC
References
CON-#190-9863 A, NUDOCS 8810270065
Download: ML20205D140 (14)

Text

.

. Lt.2 Orr:Ct3 MILLER. BALIS & O'NEIL, P.C.

mt,LIAM T MiLLtm 1101 FOURTttNTH STREET. N w jowNugwAttApaAGNA STANLEY w BALrS Suftt 1400 JAugsH STRO A08t#TA ONtab

• ASHaNGTO4 0 C 2000S M ARM C DA## ELL JIMES R CHOUK AS 84 ADLtv (202 789 1450 THOMAS C. GORAM C4/ SAN N mtLLy TELEComtR(202) 789 4049 JOHN P G#tGG WARY A H[wMAN LitL84ttCuS JONATMAN S LrtBOMTZ OfUETRtOS G PL%AS J4 October 14, 1988 ncnjamin Vogler, Esquire United States Nuclear Regulatory Commission Mail Stop 15B-18 1 White flint North 11155 Rockville Pike Rockville, Maryland 20852 Re: Texas Public Utilities Commission wheelina rules.,

Doar Bent Enclosed as promised is a copy of Substantive Rule 23.66 of the Texas Public Utilities commission's regulations, which concerns whooling for cogenerators. If you have any questions, please do not hesitate to call me.

Very truly yours, x

j3ohnMichaelAdragna 1

1 G910270065 GG1o14 FDR STF'RG ESGTr l' l '

F DC i

l .

$13.66 Arrangements Between Qualifying Facilities and Electric Utilities.

(a) Definitions - The following words and ter.ns, when used in this section, shall have the following rnean-ings, unless the context clearly indicates otherwise:

(1) Asoidable generating unit - A power plant or set of power plants in a utdity's commission-agrmed generation expansion plan that may be displaced or deferred due to firm capacity provided to the utility by qualifying facilities.

(2) Asoldevt costs - The incremental costs to an electric utdity of electric energy or capacity or both, i which, but for the purchase frorn the qualifying facdity or qualifying facilities, such utility would generate itself or purchase from another source.

(3) Back up power - Electric energy or capacity supplied by an electric utility to replace energy or capacity ordmardy generated by a qualifying facihty's own generation equipmera during an umchedul.

ed outage of the qualifying facility.

(4) Coenndeted unit bea6s (CUB) methodology - A means of idenufying avoided capacity costs. Under the CUB rnethodology, the expected revenue requirement stream associated with an avoidable generating unit, or set of avoidable units, is defined. The expected net present value of this case flow stream represents an upper bound to the net present value of the payment stream that shl!

be offered to a qualifying facility in eschange for capacity with characteristics identical to the asoid-ed unit (s).

(5) Ctat of decremental energy - The cost savings to a utdity associated with the utdity's ability to back down some of its units or to avoid rtring urdts, or to avoid purchases of power from anroer utdity because of purchases of power from qualifying facilities.

(6) Firm power - From a qualifying facility, power or power producing capacity that is avadable to the electne unhty pirsuart to a legally enforceable obligation for scheduled as ailabihty m cr a specified term.

(7) Host utility - The utdity with which the cualifying facility is directly interconnected (8) laterconnection costs - The reasonable costs of connection, switching, metenng, transtnission, distnbution, safety prmisioits, engineenng, and adrmnistrative costs incurred by the electnc utdity directly related to the installation of the physica! facihties necessary to permit interconnected opera-t>ons with a qualifying facility, to the extent such costs are in eteess of the corresponding costs that the electnc utihty would hase incurred if it had not engaged in interconnected operations, but instead generated an equivalent amount of electnc energy itself or purchased an equivalent amount of electnc energy or capacity from ccher sources. Interconnecion costs do not trxlude any costs included in the calculation of asoided costs, (9) Interruptible power - Electric energy or capacity supplied by an electne utdity subject to inter. l runion by the electric utility urder specified conditions.

(10) Malatenance power - Electric energy or capacity suglied by an electne utdity danns scheduled outages of the quahfying facility.

(II) Non firm powee frtwa a qualif) lag feellity - Power prmided urder an areangement that does not guarantee scheduled asailabdity, but instead prosides for dehvery as avadab!c.

(12) Parweet operation - A made of cieratton whkh enables a quahfying facdity to expxt automatrally any electric capacity whkh is not consumed by the quahfying facdtry or the user of the qualifying facthty's output. Parallel cpratson results in three possible states of creraton at any point in time:

i (A) The quahf)ing facdity is generating an amount of capacity that is less than the customer's I

load. The customer is therefore a net consurner.

l (B) The quahf)ing feedity is generattog an amount of capacity that is more than the customer's l load. The customer is 'herefore a net producer, i ( C ) The qualifying facthry is generating an amount of capety that is equal to the customer's load.

l The customer is therefore neither a net petexer not a net consumer.

l (13) Purthase - The otrchase of electnc energy or capaetty or bcch from a quahtying facdity by an j electne utdtty.

(14) Purchasing utility - The utdity whxh is otrchasing a qualifying facility's capacity and'or energy.

(15) Qualif) lag facility - A cogeneranon facthey or a small power pntuction facthry w hich is a quali-f>ing facthty urder surpart B of the Federal Energy Regulatory Commission's regulations urder

$23.66--I

the Public Utility Regulatory Policies Act of 1978, $201, as enacted on the date of adopion of that section, with regard to cogeneration and small pwer production.

(16) Quality of firmness of a qualifyhas facility's power - The degree to which the capacity offered by the qualifying facility is an equivalent quality substitute for the utdity's own generation or firm purchased power. At a minimum the following factors should be considered in determining quality of firmness:

(A) reliability of generation and interconnection; (B) forced outage rate; (C) availability during peak peric41s; (D) the terms of any contract or other !cgally enforceable obligation, , 'luding, but nce limited l

to, the duration of the obligation, performance guarantees, terrmnation notice requirernents, and sanctions for noncompliance; l (E) maintenance scheduling; l (F) availability for system emergencies, including the ability to separate the qualifying facility's load from tts generation; (0) the individual aM aggregate value of energy and capacity froca qualifying facilities on the electtw utility's system; (H) other dispatch characteristics; (1) reliabihty of primary and secondary fuel supplies used by the qua'.ifying facility; aM (J) impact on utdity system stability.

(17) Rate - Any pice, rate, charge, or clusifkation rnade, demanded, observed or received with respect to the sale, purchase, or transmission of electric energy or capacity, or any rule, regulation, or prac-tice respectmg any such rate, charge, or clasifkadon, and acy contract pertaining to the sale or purchase of electric energy or capacity.

(18) Renewable reso.rces - Non-fosad fuels such as solar, wind, hydro, gecehermal, biomass and municipal solid waste.

(19) Sale - The sale of electric energy or capacity or bceh supplied by an electric utility to a qualifying facihty.

(20) Supplementary power - Electric energy or capacity supplied by an electric utdity, regularly used ,

by a quahfying facility in addition to that whkh the facility generates itself. ,

(21) Systern emergency - A condition on a utility's system that is likely to result in imminent signifi-cant disrusion of service to customers or is imminently likely to endanger life or property.

(b) Scope, (1) Appikahu6ty, The subsection of the commission's substantive rules applies to the regulation of sales and prchues between qualifying facilities and electrw utdities, (2) Nesc41sted rates oc terms. Nothing in $23.66 of Chapter 23 shall:

(A) hrrut the authonty of any electtw utdity or any qualifying facdsty to agree to a rate for any l purchase, or terms or coeditions relating to any purchase, which differ from the rate or terms or cond4tiona that would otherwise be required by this section; or (B) affect the sahd2ty of any contract entered into betweca a qualifying facility aM an electrie utdtty for any purchase either before or after the adopoon of this sectice.

(3) niing of rates. All rates for tales to qualifyiss facuities, contractual oc etherw sie, shall be contain.

ed in the schedule of rates of the electric utdary filed with the coavtussion in accordarse with the Pubbe Utility Regulatory Act.

tc) Aiellabilk) of electric utility sysseas cost data.

(1) Appikabuity. This subsection applies to electrw utdines whose total ades of electrw energy for purposes other than resale eaceeded $00 mdlion Ldow su hours dunt.g any calerdar ) car beginning after D6cember 31,1975, aM before the immedtately preceding calendar year. By Nosember 30, 1984 and by December 31 esery ><ar thereaher, each of these utdsnes shall Ale w 5th the coentrua-sion aM shall mamtain for pubbe inspection the following data:

(A) the esmated asoided cost ce the electric utdity's s> stem, scdely with respct to the energy componett, for s snous lesels of ptrchues from quahfying facihtes. Such kvels of prchues shall be stated in blocks of 1,10 ard 100 raegamans ce act more than 10% of the system i

$23.S-2 i

l peak demaM for systems of less than 1,000 megawatts. The avoided cost shall be stated on a centi per kilowatt-hour basis, during daily and seasonal peak and off-peak periods, by year, ,

for the current calendar year aM each of the next 10 ) tars.

(B) the electric utility's plan for the addition of capacity by amount and type, for purchases of firm energy and capacity, and for capecity retirements for each year during the succeeding 10 years.

(C) for the current year and each of the nest 10 years, the estimated capacity costs M completion i of the planned capacity additions and planned capacity purchases, on the basis of dollars per-l kilowatt, and the associated energy costs of each unit, espressed in cents per kilowatt hour. '

These costs shall be espressed in terms of individual generating units and of individual planned i firm purchases. Such information shall be submitted in accordance with tic Federal Energy i Regulatory Commission Regulations,18 Code of Federal Regulations, 5292.302 and shall be sufficient for qualifying facilities to reasonably estimate the utility's avoided cost. Accom-panying each fding ptsuant to this rule shall be a detailed esplanation of how the data was l determined, including sources and assumptions employed.  ;

(2) SneeN power p h lead reeeerch, Each electric utility shall evaluase the quality of firmness I of energy aM capacity from small power systems which are interconnected with that utility. This evsluation should be directed tow ard determining the aggregate capacity value of intermittent energy producers. In conjunction 4ith this esaluation, the utility shaU provide the commission with dita e i measuring the number and size of qualifying facilities with a design capacity of 100 KW or less with w hich it is interconnected arst the quantity of energy supplied by each fardr.y each month (if ,

metered). The results of this evaluation, including the required data and any other relevant informa-l

tion that is developed, or which may be required by the commission in conjunction with its evalua- r tion under subiectice (f)(3) of this section, shall be filed with the commission by November 30,  !

I 19g5, and every year thereafter.

(

(3) Spedal ruise for spiaN electric utluties. Each electne utdity (<ther than any electne utility to

• hich  !

paragraph (1) of this subsection apflies) shall, upon request-i (A) provide comparable data to that required under paragrapi(1) of this subsection to enable quali- t i f)ing facilities to estimate the electric utility's avoided costs; or (B) with regard to an electric utility that is legally obligated to obtain all its requirernents for elec- ,

tric energy and capacity frten another electnc utility, provide the data of its sTplying utdity l and the rates at which it currerely purchases such energy aM caprity.  ;

) -

(d) Electric utlHty obligestems, l

(1) Ohheetion ta purehene fressi speautylag faciuties, l (A) In accordance with subsections (e) (f). (3), and (h) of this section, exh electric utdity shall prchane any energy aM capacity tha. 'nade avadable from a qualifying facdity

.

, (i) diratly to the electric utday; ce  !

(ii) indtrectly to the electric utday in scordance with paragraph (4) of this subeestion. -

(B) Each quahtying frility shall have the opion ef peosiding firm or nonfirm power. t i (C) Each electrw utdwy shall purchase energy aM capwity froen a quahtying facdry w wh a design I capacity of 10() KW or more within 90 days of being wified by the qualifying facility that .

such energy aM capacuy are or will be asailable, prosided that the electric utdry has suffi. l 1' dem irnerconnation fxilaies assitable, if an agreemers to purchase energy aM capacity is  :

m reached within 90 days aher the <tualif)ing facility provides such noeificatice, the agree- l ment, if aM when xhieved, shall bear r. retrometive effective date for the purchase of energy l

(aM carecity) delivered to the electne utday corretpMent with the 90th day following such l l mice, if the electric utday determmes that Mequs6e i netconnectre fwilaies are e as adable.

l the electne utility shallinform the gt.alifying fxday 'mithin 30 de)s after being rafied for j distnbution irnerconne tice, or wittun N) de)s for transmission interccennection, giung the  ;

1 quebfying fardry a desenptim of the aikistional facuities required as well as coat aM schedule j estirnates for comtrwtion of swh facuancs. If an agreement to purchase energy aM capwity l ,

1 is not rexhed upon ccanpletion of constn' stim of the interccen fuihties or 90 dan (

j after uttkauan by the qualifying fa: Bay that m h energy aM capacity are or ud! be asadat4e, I l

1

the agreernent, if and when achieved, shall bear a retrosethe elfcctive date for the purchase of energy and capecity delivered to the electric utility correspondent with the time of intercon-necuon or the 90th day, whichever is later. Nothing in this subacetion shall be construed in such a manner so as to preclude a qualifylag facility from notifying and contracung for energy aM/or capacity with a utility prior to 90 days before delivery of such energy and/or capacity.

(D) Noddng in this rule shall be interpreted to require a utility to contract for capacity from quali-fying facilities in escess of its capacity requirements, as determined by the commission through its electric forecast responsibilities maMated by the PURA, $16(f).

(E) Subject to subparagraph (D) of this paragraph, a utility shall be required to contract for firm aergy and capacity from qualifying facdities, if such is offered, at a price less than or equal to the current avoie ,, cost of a capsetry addition at any time prior to completion of construe.

bon of any geneNng unit or other planned capacity addition. The price may be adjusted for differences in pality of firmness between the power offered by the qualifying facuity aM the power to be supplied by the generating unk or planned cagucity addition. Capacity oteatn-ed from qualifying facdities through a legally enforceable obligation shall be included in hs accirauon espansion planning by a vulity, as well as capacity frorn other purchased power contracts, commission-certified utility generating plants, and other capacity sources. Utilities shall not be required to contiact for capacity from a quahfying facility in escess of the capaci-ty requirements for any delivery point (s) not served by the insegrated transmission anSor distribuuon fxdities of the utility to which the qualifying facdity is interconnected or to which the qualifying facility has ir&perdently arranged for wheeling or fxility output.

(F) A utdity shall purchue capacity from qualifying facilities on the buis of asoided cost ad-justed for the quality of firmness of such capacity. If rnore capacity is offered by the qualif)-

ing facuities to any one utdity than is required by the commission-approvud forecut ard genera-tion espansion plan for that utdity, the utdity is required to purchue capecity and energy from qualifying fxilities according to the following order of priorities:

(i) qurJifying facilities offering power prtduced from municipal solid waste, as defined in Tesas Civil Statutes, Artich 4477 7, $2(6), or renewable fuel arces; (ii) all c

hers; (iii) w nhia each category listed in claases (i) and (ii) of this subparagraph, nothing in these rules shall prohibit an electric utility from accepung through negotiation the rnost favorable capacity prcposal available based on a belanced consideration of esycted price, terms and corditions of purchue, aM qual.ty of firmness. The utdity may con-sider, in mahtion, diversifkatino of contracts with qualifying facihties m hich provide firm capacity with regard to ownership, type of ladustry, technology, and fuel type.

Nothing in this priority > stem should be construed so as to perne capactry oncred from quahf)ing facthties m uh a higher resonty to displace or reduce the capacity cut.

J rently being supplieJ, or to be provided, by qualifying fwihties =ith lower moroes, i

- ^ wW.h contracts hase been esecvied (0) In ork , preide for as cederly consucration of the pcececial for purchased power from quahfying facilitica to displace or defer 6 planned generation dhuon ador poside for the orderly consueration of multiple and cornpettag offers to supply future capacity, a utthty is allowed so set up timely ard reasonable time periMs, cv "eindows," for the noticitance and evaluation of cspeewy offers. Each utdwy shall munten recorda of all offers receised from quahtyieg (wihtaca for a period of the years from receipt thereof.

(2) Obuget6es to seu to quahf) lag faciusnes la xcordan:e with subsection Q) of this section, exh elatrse utdsy shall sell to any quahfying fxdity wahin its sersice area, any energy aM caracay requested by the quahfying fxthry.

(3) Ohiigation to intertonsat, (A) Subject to subparagraph (B) of tlus paragraph any electric utday shall make such interconnec-uans with any quabfying frihty withis ns service area as icay be necessary to accomphsh purchases or sales urW: this section. The celigauon to pay for may inserconnection costs shall te determined in acadance wah subsecta (k) of this section. 1 (B) No electne uuhty is requtred to interemnect with any quahfping fxihties if, solely by renon  !

of purchases oc sales oser the interconnecta, the electric unbry would twcome subject to i l

i h.M

l .

. I regulation as a public utdity under the Federal Power Act. Part !!, u enacted on the date of f adoption of this section (4) Treasaslastes to othee electric utMitsee. If a qualifying facility with a rated capacity greater than one inesawatt inserconnected with the host utility at a voltage greaser than 60.000 volts measured phase to phase requests, an electric utility shall trare 1- ergy and/or capacity from the quaEfying facility to any other electne utility designated by th% s/ying facility, provided that such transmit-tal is not in violation of federal law or other jurisdictional authoney No electne utility is required to enter into any transmission arrangement if, solely by reason of tuch transmiulon arrangement.  ;

the electric utdity would become subject to regulation as a public utility under the Federal Power [

l Act, Part !!. Amy electric utdity to w hkh such energy and/or capacity is transmined shall purchase l

such energy ador capacity as if the quahtying facuity were supplying energy anNor capacity direcdy  ;

to such electric utility. Transtnission to other electnc utilities shall be governed by the following:  :

l (A) Transashn6sa sersagessents. The qualifying facuity is responsMe for all neceuary transmis.

l t .0" weements with utilities w hose transmiulon sy neems are impacted by the transminion ei the v %ing facility's energy an&or capacity. Howeser, at the qualifying facility's re-guet, the pc thming utility shall make all such arrangements including but not limhed to. ,

rs tputtm c / contract terms and condaions and determination of additional facilities, if any, rew 6 .wihtate wheeling of the energy anNor etpacity. Fut'hermore, if the host utthty  ;

and the qualifying facdity agree, then the host utdity shall make all such arrargements. The qualifying facuity shall be notified of all negotiations and have the right to prtkipate fully ,

in all negotiations and be a party to each wheeling agreement. In addition alt information per. ,

taining to such arrangements shall be fumished to the qualifying fwility or purchasing utdity l upon request.

(R) Payment of tr==-la% charges. All utilities that can show that their transminion systems '

are impacted by the transmiulon of a qualifying facihty's energy anNor capecity (impacted t utilities) are entitled to payment for tran*. mission wheeling service as defined in paragraph  ;

(5) of this subeection. At the option of the qualifying facuity. all transmission wheeling charges [

by impacted utilities are pay able by the qualif) lag facility or the purchasing utility, if the pur-  ;

chasing utairy pays the transminion charges the sum of such payments and the pe)ments to the qualifying fwdny for energy ador capacity shall not eacoed the purchasing utiley's avouled

(

cost.

(C) Sydem =Wa==. Itusonable costs of interconnecting facuities prosided by the host utthey shall be borne by the qualifying fwnity u provided in subesction (1)(l) and (2) of this section. i The con of all c4her aMitions or impemements to impacted utilities systems neceuitated by [

the provision of planned capacity transrmulon wheehrg senke for energy anCor capecity i from the qualifying facility as described in paragraph ($) of this subsection w di be the respon- l sibihty of the impacted utility. The impoeted utdity shall construct such s)seem aMa6ons or j improvements u espedahously as possMe. For prosision of as as adable trammission w heel, ing sen ke under persgraph (S) of thas subsecuaa the com of sy sseen a&huons or improvements reanoaably needed to accomanodate the transaction may be borne by the quahfying fwdity l or by the purchasing utdety at the purchasing utdity's cyeaan  !

(D) M 3," et teemaanha6sa wheenes see ice. Planned capwiry tr-uion wheeling ser- i sice may only be insertypeed la case of a system or area emergeocy when the continuawe  !

of such senice would comanbuse to dse emergency. As asadable trauminion whaehag ut-  !

! ske shall be subject to intenvetion la the unn circumstarn:ee or ahea continuation of such  :

l senke wou13 impur the abday of the utdity providing such senke to preside reliab&e ser- I I

ske to its firm customers. In the neat interrupuon of tranuminion wheehag senix is an-ticipated or espenenced, each utdity providtat such nice shall nottfy all aftuted qualtfying fxdaies u soon as practxable. Such acore shall include the time at which the inserrugeon j becomes eMectne, the est2 mated darnuon of the insenuptat, and the romans for the inserruyam. l (E) TartNs and agreeenessa.

l ti) Each ut.dtry that charges for transminion whorling senice subject to this sect >ce shall.  ;

within 30 da)s of the effwtive daic of this secticet, file a tanff that spa.ifies the fwdaties i raec per megawas for planned capecity tranumuion wheeling senice sad the charge  !

per megawatt mde for as avadable trammmuon senice as cakulaaed accordtag to  !

l

$23.66- 5 i

paragraph (5)(c) of this subsection. The tariff shall also include generamms and con.

ditions for providing transmission wheeling service for capacity and/or energy from a qualifying facility to a purchasing utility in accordance with these rules. Notice of the initial tariff niing shall be made by a one time publication in a newspaper of general circulation published within each city or town with a population of 25,000 within the utility's service area. The tariff and charges are subject to review and change in each subsequent rate case of the utility. Utilities that do not reasonably expect to be required to provide transmission wheeling service under this section shall be exempt from the initial filing requirement, but shall file an appropriate tariff within 30 days after a re-quest to provide transmission wheeling service is received.

(ii) Nothing in this subsection shall prohibit an impacted utility and a qualifying facility or its representative from agrecirg to a rate and terms and conditions for provision of transmission wbecling service for capacity and/or energy from the qualifying facili-ty to a purchasing utility that differ from those specified in this subsection. To the ex-tent required by the Public Utility Regulatory Act, such agreements are subject to review and approval by the commission.

(iii) All utilities filing applications for approval of whccling tariffs with the Federal Energy Regulatory Commission (FERC) or any other federal agency having jurisdiction of wheeling tariffs shall give notice to the commission of such filing by providing the commission with a duplicate copy of any and all such documents filed with the FERC or other federal agency within 20 days of such filing. Tariffs currently on file with any agency dall be filed with the commission within 20 days of the effective date of thisrule.

(F) General obligations.

(1) The host utility shall notify the qualifying facility upon request of all utilities potential-ly entitled to compensation under this rule ior the proposed wheeling transaction. At the qualifying facihty's request and expense the host utility shall conduct preliminary impact studies for specified wheeling transactions. Any utility subject to this section shall, upon request by the commission staff, provide the commission with annual im-pact and loss studies for hypothetical wheeling transactions specified by the staff.

(ii) All requests for transmission wheeling service under this section shall be made in writing and shall provide information in sufficient detail to allow evaluation of the transaction.

An impacted utility shall respond in writing to such request within 60 days of receipt of the request unless the power transfer is of such magnitude, duration, and/or cora-plexity that additional time is needed to evaluate its impact. Under no circumstances shall a response be made later than 120 days following the date of the request.

(iii) The impacted utility shall use its best effor's to include in its response cost and schedule information reasonably necessary to enable the qualifying facility to evaluate the im-pact of the transmission charges on its proposed sales, or in the case of denir.1 of transmis-sion cervice as allowed in paragraph (5) of thh subsection, an explanation of the reasons for denial. Such information shall include, but not necer.sarily be limited to, all perti-nent load liow data, parameters used and cost and schedule information for necessary system additions and improvements. The normal Electric Reliability Council of Texas summer peak load data base shall be provided to the qualifying facility upon request under mutually agreeable arrangements.

(iv) Upon request of the qualifying facility, an impacted utility shall provide information on terms and conditions of calsting contracts for transmission w hecling service to other utilities.

(5) Charges for trammisalon wheeling service. Transmission wheeling service shall be offered on a planned capacity or on an as available capacity basis at the opuon of the quahfying facility. Howestr, for any single transaction, wheeling contracts with impacted utilities must all be of the same type (i.e., planned capacity er as available capacity). Planned capacity transmission wheeling service

shall be provided with the sarne level of resource commitment, the sarae priorities, similar contrac-tual conditions in accordance with this rule and other treatment similar to that provided to other customers of the utility w ho use firm services provided by the utility. Planned capacity transmission 923.66- 6 1

wheeling service can only be denied if an impacted utility successfully petitions the commission and shows that the cost and/or scheduling of needed system improvements are such that there would be a significant detrimental effect on their other customers or that such service is prohibited by ac-tions of ary gowrnmental agency or regulatory authority having jurisdiction. As available capacity transmission wheeling service may be denied under the same circumstances or if there is insuffi-cient capacity available on the transmission system of the impacted utility or if the transaction will create an undue interference on the utility's obligation to serve its existing firm c istomers. Charges for transmission wheeling service shall be determined as follows:

(A) Cost of transmiedon service. ne annual cost of providing transmission service on the system of each impacted utility shall be determined from the utility's cost of service as approved by the commission in the utility's most recent rate case. If such a study is not available the cost shall be based on the annual expense found in FERC expense accounts 560-564 and 566-573 (or accounts with similar contents) plus the depreciation, federal income taxes, other taxes and commission allowrd rate of return based on FERC plant accounts 350-359 (or accounts with similar contents) less accumulated depreciation and associated deferred taxes. In addi-tion, the cost shall include portions of administrative and general expenses and return on por-tions of general plant and oth:r rate base items such as constmetion work in progress (CWIP),

materials and supplies and prepayments allocated to transmission service in a mt nner consit-tent with the utility's cost of service study. It is recommended, though not required by the commission, that municipally owned uttlities providing whecling service use the cost of ser-vice study most recently approved by their regulatory body or, in the absence of sach a study, the expenses and plant accounts as outlined in this subparagraph.

(B) Billing units. The billing units for planned capacity transmission whecling service to be used in this calculstion shall be equal to the highest monthly system total peak demand (including both firm and interruptible load and losses) experienced during the same annual period used 4

for cost determination in subparagraph (A) of this paragraph, plus the st.m of the contracted capacity of planned capacity transmission wheeling service obSgations in effect during that same period for which the utility is receiving compensation as a designated contract path utili-ty as described in subparagtsph (D) of titis paragraph. Billing units for as available transmis-sion wheeling service shall be the megawatt miles for the transmission system used in calculating the cost of transmission service, ne megawatt-mPes for a system shall be the sum of the products of 80% of the thermal rating of each line (75 C conductor,25 air,1.4 mile per hour wind and emissivity of 0.5) times the length in miles of the line for transmission lines whose nominal operating voltage is at least 60,000 vol's measured phase to phase.

(C) Facilities rates. The annualized facilities rate for providing planned capacity transmission wheel-ing service is found by dividing the annual cost of providing transmission service as found in subparagraph (A) of this paragraph by the planned capacity billing units as foend in sub- i paragraph (B) of this paragraph. De annualized facility rate for as available transmission wheel-  !

ing service is found by dividing the annual cost of providing transmission service as Sund l

in subparagraph (A) of this paragraph by the as available capacity billing units found in sub- l paragraph (B) of this parsgtaph. nese rates shall be specified in the utility's tariff as requir:d  ;

in paragraph (4)(E)(1) of this subsection.

(D) Facilities charges for planned capacity transmission wheeling serMee. ne facilities charge 1 for planned capacity wheeling by contract path utilities shall be the facilities rate for planned I capacity wheeling as calculated in subparagraph (C) of this paragraph multiplied by contract ,

capacity of the power contract with the purchasing utility Contract path utilities will include '

the host utility and other utilities as selected by the qualifying facility w hose transmission lines of sufficient capacity to handle the transaction are necessary to make a direct electrical con-nection with the purchasing utility's system. Planned capacity wheeling facilities charges for all other impacted utilities shall be calculated according to subparagraph (E) of this paragraph.

(E) Facilities charge foe as available transminaion wheeling service. ne charge for as available transmission wheeling service shall be the as available facilities rate as calculated in subparagraph (C) of this paragraph multiplied by the megawatt mile change on the impacted utility's transmis-sion system due to the transaction. De megawatt mile change or the utility's system shall

$23,66--7  !

~ . =- . - .. _ .

1

. l l

be detersuned by multiplying the increase in power flow in each line by the length of the line and sumnung the resultant products for each line on the system. Lines that have no change  !

or decreases in pwer flows shall be ignored in this calcal=*iaa. Power flow c'.anges due to the transaction shall be deternuned annually by the end of the first quarter of the calendar year from peak load period power flow studies that employ the most recently revised data base and applicable programs maintamed by the Electric Reinabdsey Council of Texas Engineer- >

ing Subcomnunee and shuald include all other existing planned capacity wheeling transac- ,

j 'tions. Impacts for simultaneous transactions shall be based on the rnegawatt flow changes _

resulting from the separate addition of each tranaaniaa to the peak load power flow base case. e (F) Proviales for leases. Increases or decreases in losses lacurred by an impacted utility due to '

a transaction shall be determined from the scheduled transfer used in conjunction with loss t matrices produced by the Electnc Reliability Council of Texas Engmeering subcommittee or i upon average system losses for increased losses at the option of the qualif'ing / facility. In-  !

cresacs or decreases in losses shall be repaid in kind at the time of the transfer if practacal or if such repayment is not practical, accuambsad in peak and off-peak accounts for later  ;

psyback. If both the impacted utility and it's purchasing utility agree payments and credits  ;

for losses may be in cash.

(0) Terms of transudssion wheelies contreets. For planned capacity transminalan wheeling con-tracts impacted utilities shall offer a term at least as long as the term of the qualifying facility's (

, purchase power contract with the purchasing utility. For as available transmiasion wheeling contracts the impacted utility shall not be required to offer a term longer than one year.

, (6) Parallel operation. Each electric utility shall offer to operate in parallel with a qualifying facility within its service area.

(e) Rates for purchases ihnen a qualifyles fheility.

l (1) Rates for purchases of energy and capacity Irom any qualifying facility shall be just and reasonable j to the consumers of the electric utility and in the public interest, and shall not discriminate against qualifying cogeneration and small power production facilities. '

Q) Rates for purchases of energy and capacity from any qualifying facility shall not exceed avoided cost; however, in the case in which the rates for purchase are based upon estunates of avoided costs t over the specific term of the contract or other legally enforceable obligation, the rates for such pur-chases do not violate this subsection if the rates for such purchases differ from avoided cost at the time of delivery. [

j  !

(3) Rates for pmnases satisfy the requirements of paragraph (1) of this subsection if they equal avoid-  ;

ed cost.

! (4) Rates for purchases from qualifying facilities shall be in accordance with paragraph (1)-(3) of this sutr.ection, regardless of whether the electric utility making such purchases is simultaneously mak- i l Ing sales to the qualifying facility.

(5) Payments by a utility to any qualifying facility, if an accordance with paragraphs (1)-(3) of this subsection, shall be considered reasonable and necessary operating expenses of that utility, i

j (f) Standard rates for purchases fresa qualifylag feellities with a design capacity of 100 kileweets er less.

j (1) There shall be included in the tariffs of each electric utility a.madard rates for purchases from quali- ,

i fying facilities with a design capacity of 100 kilowatts or less. The rases for purchases under this

paragraph:

} (A) shall be consistent with subsections (c', md (3) of this section. (Rates for purchases from a 1

j qualifying facility and rates for purchases of nonfirm power from a qualifying facility); ,

l (B) shall consider the aggregate capacity value provided by dispersed qualifying facilities with '

a design capacity of 100 kilowatts or less, if an aggregate capacity value can be reasonably  ;

eenmated a capacey payment shall be included in the standard reses provided there is an avoided

capacity cost; and

'

(C) may differentisse among qualifying facilities usine various technologies on the basis of the

supply characteristics of the different technologies.

[

Q) Terms and condalons umque to qualifying facilities with a design capacity of 100 kilowatts or less such as metering arrangements, safety equipment requirernents, liability for injury or equipment j ln.66-s I i  !

l l

damage, access to equipment and additional administrative costs, if any, shall be included in a stan-dard tariff.

(3) The standard tariff shall offer at least the following opuons.

(A) parallel operation with interconnecuon through a single meter that measures net consumption; (i) net consumption for a given billing period shall be billed in accordance with the stan-dard tariff applicable to the customer class to which the user of the qualifying facility's output belongs; (ii) net production will not be metered or purchased by the utility and therefore there will be no additional customer charge imposed on the qualifying facility; (B) parallel operation with in:erconnection through two meters with one measuring net consump-tion and the other measuring net produccon; (i) net consumption for a given billing period shall be billed in accordance with the stan-dard tariff applicable to the customer class to which the user of the qualifying facility's output belongs; *

(ii) net production for a given billing period shall be purchased at the standard rate provid-ed for in paragraph (1)(A) and (B) of this subsection; (C) interconnection through two meters with one measuring all consumption by the customer and the other measuring all production by the qualifying facility; ,

(i) all consumption by the customer for a given billing period shall be billed in accordance with the standard tariff applicable to the customer class to which the customer would belong in the absence of the qual.ifying facility; (ii) all production by the qualifying facility for a given billing period shall be purchased at the standard rate provided for in secuons (t)(A) and (B) of this subsection.

(4) In addition, each electric utility shall offer qualifying facilities using renewabla resources with an aggregate design capacity of 50 kilowatts or less the option ofinterconnecting through a single meter that runs forward and backward.

(A) Any consumption for a given billing period shall be billed in accordance with the standard tariff applicable to the customer class to which the user of the qualifying facility's output belongs.

(B) Any production for a given billing period shall be purchased at the standard rate provided for in paragraph (t)(A) of this subsection.

(5) Interconnection requirements necessary to permit interconnected operations between the qualifying facility and the utility and the costs associated with such requirements shall be dealt with in a man-net consistent with subsection (k) of this section.

(6) The rates, terms and conditions contained in the standard tariff for qualifying facilities with a design capacity of 100 kilc,satts or less shall be subject to review and revision by the commission.

(7) Requirements for the provision of insurance under this subsecdon shall be of a type commonly available from insurance carners in the region of the state where the customer is located and for the classification to which the customer would belong in the absence of the qualifying facility.

(g) Tariffs setting out the ul# T-4 for purchases of nonfirse power fresa a qualifying facelty. Tariffs setting out the methodologies for purchases of nonfirm power from a qualifying facility shall be filed with the commission based on one of the following two approaches:

(1) Rates for purchases of nonfirm power may, by agreunent of both the utility and the qualifying facility, be based on the utility's average avoided energy costs. A utility may use its fuel adjustment charge until it has developed an appropnate avoided energy cost rate but may not do so aAer June 30,1982.

Administrative, billing, and metering costs shall be recovered through a monthly customer charge to the qualifying facility.

(2) Rates for purchases of nonfirm power may, at the option of the qualifying facility, be based on 4

the full cost at the time of delivery of decremental energy that would have been incurred by the utility had the qualifying facility not been in operation.

(A) The following facto +s should be considered in the calculation of the cost of ds.n...w.;al energy:

(i) fuel costs; (ii) variable operating and maintenance costs; (iii) line losses; (iv) heat rates; t

$23.66--9

(v) cost of purchases from other sources; (vi) other energy related costs; (vii) capacity costs, if, as a class, qualifying facilities providing nonfirm energy offer some predictable capacity; and (viii) for short term energy purchases, the time and quantity of energy furnished.

(B) If practical, the avoided cost should be determmed by calculating by time period, using the utility's economic dispatch model (or comparable methodology), the difference between the cost of the total energy furnished by both the qualifying facility and the utility, computed as though the energy furnished by the qualifying facility had been furnished by the utility, and the actual cost of energy furni:hed by the utility.

(C) The economic dispatch model should take into consideration the following factors:

(1) fuel costs; (ii) variable operating and maintenance costs; (iii) line losses; (iv) heat rates; (v) purchased power opportunity; (vi) system stability; and (vil) operating characteristics.

(D) Time periods should be hourly if the utility has an automated economic a*[*h mod .! available; otherwise the shortest reasonable time period for which costs can be determmed should be used.

(E) Administrative, billing, and metering costs shall be recovered through a monthly customer charge to the qualifying facility.

(h) Rates for purchases of firm power from a qualifying facility.

(1) Rates for firm purchases from qualifying facilities shall be based upon the avoided cost of energy and capacity. Where the cost to be avoided is based on cancellation or deferral of a utility facility.

any reasonable cost associated with such cancellation or deferral shall be subtracted from the cost of construction of the utility facility to obtain the avoided cost. An assumpdon of reasonable cancella-i tion or deferral costs is not b!nding on the commission in any subsequent rate proceeding.

(2) Rates for purchases of energy and capacity frorn any qualifying facility shall be deemed to comply with this rule if the estimated net present value of the sum of both the capacity and energy payments to the cogenerator and the associated costs of cancelled or deferred construction do not exceed the net present value of the sum of the utility's avoided capacity and energy costs s.s specified in paragraph (3) of this subsection, adjusted for the quality of firmness of the capacity provided by the qualifying facility and the risks associated with alternative payment structures to qualifying facilities. This rule allows, but does not require, alternative payment streams to qualifying facilities as long as the ex-pected net present value of the total payments to the qualifying facility does not exceed the total expected avoided cost of the utility. For sitdations where the characteristics of the capacity offered by a qualifying facility are not idenocal to the characteristics of the avoided capacity, capacity payments may be adjusted accordingly and performance incentives are allowed. These capacity payments struc-tures, however, must be set in such a manner that the ratepayer is indifferent to, or prefers, the

' expected net present value and risk of the revenue requirement stream and capacity associated with the qualifying facility to the revenue requirement stream and capacity associated with the avoided unit or set of avoidable units.

(3) By December X 1984, and by December 30,1987, and every two years thereaAer, each electric utility shall file with the commission a standard avoided cost calculation and terms and conditions for the purchase of firm energy and capacity from qualifying facilities, the terms of which are sub-ject to commission review and approval aAer nodce and opportunity for hearing. For good cause, a utility may revise its avoided cost calculation and terms and conditions and fde them with the commission at any time before its next required filing otherwise is due. If the utility elects to (de an interim standard avoided cost calculation, then on the date that the standard avoided cost calcula-tion would otherwise be due the utility must file a new standard avoided cost calculation or indicate that the interim remains valid. Prior to a hearing, the presiding exammer shall discuss settlement of all issues in dispute. The parties shall be required to present to the presiding examiner a list of all issues whkh have been settled and a list s'all issues which remain in dispute. The hearing on

$23.66--10

the merits shall be limited to those issues which remain in dispute. Failute to participate in the set- i tiement conference by any party shall be grounds for dismissal as a party to the proceedings. The  !

purpose of the standard avoided cost calculauon and terms and condstions for the purchase is to

provide prices, terms and conditions that rnay be applicable to purchase arrangements between a utility and a qualifying facility. The senadard avoided cost calculation shall be stated in terms of  !

dollars-per kilowatt (or per KVA) per year (or per month) and cents per kilowatt-hour. Along with j these calculmenana, each utility shall file with the commission the program logic (except to commer- )

i- cial programs subject to copyright protectson) and associated data used to derive these calculations, j along with any narrative instruction necessary to understand the calculations. The actual computer -

4 1;;ograms, or reasonable substitute, and data shall be made avadable by the utility on the appropnate i computer media at not more than the actual repraaweian cost. At least one standard avoided cost 3

calculation and terms and conditions for purchase shall contam the following

.

(A) the net present value of the avoided capacity costs of the utility calculated according to the

commnted unit basis methodology. The commmed unit basis methodology develops avoeded l 1 capacity costs based on the estimated cost of a specific, avoidable generating unit or group of avoidable generating units in the utility's expansion plan. The following critxia shall be  !

used in the calculauon of avoided costs:

(i) cost of debt - a weighted average of returns on tax exempt bonds and bonds yielding a

taxable interest according to the most recent Moody's Bond Survey applicable to the  !

j utility's bond ratings; I j (ii) cost of preferred stock - most recent Moody's Bond Survey applicable to utility's l preferred stock rating;  !

3 (iii) cost of equity - that determined in the, most recent Texas rate case of the utility; (iv) capital structure that determined in the rnoet recent Texas raes case of the utility; l (v) AFUDC rate - a raes derived from the most recent Texas rose case of the utility; .

] (vi) percent CWIP - the simple average of the percent CWIP allowed in the utility's rate i

l base during its two most recent rate cases or 50%, whichever is less;  ;

(vil) tax (- ' " + rate - the accelerseed depreciation rase for electric utdsues as authoriz.

I ed by the internal Revenue . Service at the point in time a which capacity payments ,

commence; -

(Vill) property taxes and lasurance costs - thoet cases calculated at ratios allowed in the ,

, utility's most recent Texas rate cases; (1x) lacremental federal incoase tax rate - the federal income tax rate for utilities allow-ed by the Internal Revenue Service; l

(x) service life of planned projects in years - that service life as esumated according  !

, to the utility's plan; ,

(xi) eettmated changes la plant output over life of project - that output as estimated by the utility according to its plan; {

)

i (xii) Inflation theter - an appropriate regional forecast of power plant construction costs  ;

j as published by recognized forecasting services such as Data Resources, Inc. or Chase l

Econometnes; and i (alli) discount rate - the overall cost of capital obtained by applying clauses (i)-(iv) and l (ii) of this subparagraph.  !

(B) the espected net present value of the energy costs associated with the type of fuel to be used  !

in the unit, or units, specified in (hX3XA) of this section; i

(C) terms and conditions for the purchase of electricity from qualifying facilities; {

l (D) the amount of capacity, in excess of its own installed generation or purchased according to  ;

j a legally enforceable obligation, that the utility will require by year for the next 10 years and j

! the percentage of that capacity to be provided by qualifying facilities; l j (E) a reasonable estimate of the cost of cancellation or deferral of the avoedeble unit and the basis .

for such estimate.  !

i J) If a utility does not generate electric power or have any avoidable units in its generation expension l plan, then that utility is esempted from the requirements of subparagraph (3XA) and (B) of this i sobeection. Inseeed of the filing deses provided in the first senaeace of paragraph (3) of this subsec-tion, a utility shall file by January 31,1985, and by January 31,1988, and every two years theresher, (

i 623.66- I1 l

. l

,_--- _ _ __ ..__ _ _ , _ . _ _ - - ~ _ - - . - _ _ _ -. . - , _ _ . . _ _ . _ _ , _ - - _ _ --____-

I l

information based on one of two options. (Provided, however, that it may revise its fding at any time before the next fding date is due and shall revise its fding in the event its construction plans call for a generating plant):

(A) a standard avoided cost calculation and proposal for isrchase of firm capacity and energy based upon the capacity and energy components of lu avoMable firm power purchases, or (B) the name and address of the utility which supplies power to the nongenerating utility.

(5) Instead of the dates provided in the first sentence of paragraph (3) cf this subsecten, a cooperative-owned generation and transmission utility or a river authority is aHowed to file, by January 31, 1985, and by January 31,1988, and every two years thereafter, an avoided cost calculation and terms and conditions for pun:hase from qualifying facilities that determinec avoided capacity costs according to the committed unit basis methodology, but which employs criteria which differ from these listed in paragraph (3XAXI)-(3)(AXxiii) of this subeection, as long as the criteria chosen replicate assumptions applicable to their financial structures. A cooperative-owned generation and transmis-sion utility or a river authority remains subject to all the other requirements of paragraph (3) of this rubsection.

(i) Periods during which purchases not required.

(1) Any electric utility which gives notice to each affected qualifying facility in time for the qualifying facility to cease delivery of energy or capacity to the electric utility will not be required to purchase electric energy or capacity during any period during which, due to operational circumstaxes, pur-chases from qualifying facilities will resuk in costs greater than those which the utility would incur if it did not make such purchases, but instecd generated an equivalent amount of energy itself, pro-vided however, that this subsection does not override contractual obligations of the electric utility to purchase from a qualifying facility.

(2) Any electric utility which falls to give notice to each affected qualifying facility in time for the quali-fying facility to cease the delivery of energy or capacity to the electric utility will be required to pay the same rate for such purchase of energy or capacity as would be required had the period of greater costs not occurred.

(3) A claim by an electric utility that such a period has occurred or will occur is subject to such verifica-tion by the commission either before or aher the occurrence.

(j) Rates for sales to qualifying facilities.

(1) General rules.

(A) Rates for sales shall be just and reasonable and in the public interest, and shall not discritninate '

against any qualifying facility in comparison to rates for sales to other customers served by the electric utility. Rates for standby or other supplementary service shall be based on the amount of capacity contracted for between the wholesale supplier and the distribution utility, and shall not penalize distnbution utilities which also purciase powtr from qualifying facilities.

Special equipment or system modifications shall be required for distribution utilities purchas-ing from qualifying facilhas only when the generating utility demonstrates a need therefor.

Unless usage characteristics classified as a prtial requirements customer by its wholesale supplier.

(B) Rates for sales which are based on accurate data and consistent system wide costing principles shall ret be considered to discriminate against any qualifying facility to the exterd that such rates apply to the utility's other customers with smular load or other cost related characteristics. ,

(2) Addklonal services to be provided to qualifylag facility, (A) Upon request of a qualifying facility within its service area, each electric utility shall provide:

(i) supplementary power; (ii) back up power; (iii) maintenance power; and (iv) interruptible powtr.

(B) An electric utility shall not be required to provide supplementary power, back up power, maintenance power, or interruptible power to a qualifying facility if, after notice in the area i served by the electric utility and aAct opportunity for public comment, the electric utility I demonstrates and the commission finds that provision of such power will: l

$23.66--12

i* ,

(i) impair the electric utility's ability to render adequate service to its customers; or (ii) place an undue burden on the electric utility.

(3) Rates for sales of back-up power and malatenance power. The rate for sales of back-up power or maintenance power:

(A) shall not be based upon an assumption (unless supported by factual data) that forced outages or other reductions in electric output by all qualifying facilities on an electric utility's system will occur simultaneously, or during the system peak, or both; and (B) shall take into account the extent to which schafuled outages of the qualifying facilities can be usefully coordinated with scheduled outages of the utility's facilities.

(k) Interronnection costs.

(1) Interconnection plan. Each utility shall establish, and make available for inspection, guidelines for assuring safe and reliable operation of interconnected qualifying facilities. It may also require the electrical characteristics and data and local interconnection design and protection requirements for the qualifying facility's proposed generation facilities to facilitate the development of the utili-ty's interconnection plan. Upon receipt of such information from the qualifying facility, the utility shall provide the qualifying facility with a cost proposal identifying the interconnection costs and a list of issues to be addressed in the interconnection negotiations at the time the utility provides its interconnection plan in accordance with subsection (d)(1)(C) of this section.

(2) Reimbursement of Interconnection costs. Each qualifying facility shall be obligated to pay any interconnection costs. De utility's methods for determining and billing interconnection costs shall be consistent and shall be applied on a nondiscriminating basis to all qualifying facility applicants for service.

(1) System emergencies.

(1) Qualifying facility obilgation to prodde power during system emergencies. A qualifying facility shall be required to provide energy or capacity to an electric utility during a system emergency only to the extent:

(A) provided by agreement between such qualifying facility and electric utility; or (B) ordered under the Federal Power Act. 9202(c), u enacted on the date of adoption.

(2) Discontinuance of purchases and sales during system emergencies. During any system emergen-cy, an electric utility may discontinue:

(A) purchases from a qualifying faciUty if such purchases would contribute to such emergency; and (B) sales to a qualifying facility, provided that such discontinuance is on a nondixtiminatory basis.

(m) Enforcement. A proceeding to resolve a dispute between a utility and a qualifying facility arising under this section may be instituted by the filing of a petition with the commission. If the petition complies with the rulcs of practice and procedure of the commission, the director of hearings shall docket it in accor-dance with $21.21 of this title (relating to Docketing and Numbering of Causes). The institution, conduct, i and determination of the proceeding shall be in full accordance with the rules of practice and procedure of the commission. l l

l i

l l

i l

l l

l l

l

$23.66--13 I

._.