W. Va. Code R. § 150-3-12

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 150-3-12 - Cogeneration and Small Power Production

12.1. Definitions.

12.1.1. Terms defined in the Public Utility Regulatory Policies Act of 1978 (PURPA), 16 U.S.C. 2601, et seq., shall have the same meaning for purposes of this Rule 12 as they have under PURPA, unless further defined in this rule.

12.1.1.a. "Qualifying facility" means a cogeneration facility or a small power production facility which satisfies the criteria for qualifying facilities set forth in Subpart B of Part 292 of the rules of the Federal Energy Regulatory Commission, Qualifying Cogeneration and Small Power Production Facilities, 18 C.F.R. § 292.201 through § 292.207.

12.1.1.b. "Purchase" means the purchase of electric energy or capacity or both from a qualifying facility by an electric utility.

12.1.1.c. "Sale" means the sale of electric energy or capacity or both by an electric utility to a qualifying facility.

12.1.1.d. "System emergency" means a condition on a utility's system which is likely to result in imminent significant disruption of service to customers or is imminently likely to endanger life or property.

12.1.1.e. "Rate" means any price, rate, charge, or classification made, demanded, observed or received with respect to the sale or purchase of electric energy or capacity, or any rule, regulation, or practice respecting any such rate, charge, or classification, and any contract pertaining to the sale or purchase of electric energy or capacity.

12.1.1.f. "Avoided costs" means the incremental costs to an electric utility of electric energy or capacity or both which, but for the purchase from the qualifying facility or qualifying facilities, such utility would generate itself or purchase from another source.

12.1.1.g. "Interconnection costs" means the reasonable cost of connection, switching, metering, transmission, distribution, safety provisions and administrative costs incurred by the electric utility directly related to the installation and maintenance of the physical facilities necessary to permit interconnected operations with a qualifying facility, to the extent such costs are in excess of the corresponding costs which the electric utility would have incurred if it had not engaged in interconnected operations, but instead generated an equivalent amount of electric energy itself or purchased an equivalent amount of electric energy or capacity from other sources. Interconnection costs do not include any costs included in the calculation of avoided costs.

12.1.1.h. "Supplementary power" means electric energy or capacity or both supplied by an electric utility, regularly used by a qualifying facility in addition to that which the facility generates itself.

12.1.1.i. "Back-up power" means electric energy or capacity or both supplied by an electric utility to replace energy ordinarily generated by a facility's own generation equipment during an unscheduled outage of the facility.

12.1.1aj. "Interruptible power" means electric energy or capacity or both supplied by an electric utility subject to interruption by the electric utility under specified conditions.

12.1.1.k. "Maintenance power" means electric energy or capacity or both supplied by an electric utility during scheduled outages by the qualifying facility.

12.1.1.l. "Commission" means Public Service Commission of West Virginia.

12.2. Scope.

12.2.1. Applicability -- The provisions of Rule 12 et seq., apply to the regulation of sales and purchases between qualifying facilities with a design capacity in excess of 100 KW and electric utilities.

12.2.2. Negotiated rates or terms -- Nothing in Rule 12 et seq:

12.2.2.a. Limits the authority of any electric 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 required by this rule; or

12.2.2.b. Affects the validity of any contract entered into between a qualifying facility and an electric utility for any purchase.

12.3. Cost data to be supplied by electric utilities.

12.3.1. Each utility required to file data with the Federal Energy Regulatory Commission under 18 C.F.R. 292.302, Availability of Electric Utility System Cost Data, shall file the same data with the Commission in accordance with the time schedules and utility classifications set forth in that section.

12.3.2. Any data submitted by an electric utility under Rule 12.3 shall be subject to Commission review. In any such review, the electric utility has the burden of coming forward with justification for its data.

12.4. Electric utility obligation under Rule 12 et seq.

12.4.1. Obligation to purchase from qualifying facilities -- Each electric utility shall purchase, in accordance with Rule 12.6, any energy and capacity which is made available from a qualifying facility:

12.4.1.a. Directly to the electric utility; or

12.4.1.b. Indirectly to the electric utility in accordance with Rule 12.4.4.

12.4.2. Obligation to sell to qualifying facilities -- Each electric utility shall sell to any qualifying facility, in accordance with Rule 12.7, any energy and capacity requested by the qualifying facility.

12.4.3. Obligation to interconnect.

12.4.3.a. Any electric utility shall make such interconnection with any qualifying facility as may be necessary to accomplish purchases or sales under these rules (Rule 12 et seq.): provided, however, that if, solely by reason of purchases or sales over the interconnection, the electric utility would become subject to regulation as a public utility under Part II of the Federal Power Act, then the electric utility will not be required to interconnect.

12.4.3.b. The obligation to pay for any interconnection costs shall be determined in accordance with Rule 12.8.

12.4.4. Transmission to other electric utilities -- If a qualifying facility agrees, an electric utility which would otherwise be obligated to purchase energy or capacity from such qualifying facility may transmit the energy or capacity to any other electric utility. Any electric utility to which such energy or capacity is transmitted shall purchase such energy or capacity under this paragraph as if the qualifying facility were supplying energy or capacity directly to such electric utility. The rate for purchase by the electric utility to which such energy is transmitted shall be adjusted up or down to reflect line losses and shall not include any charges for transmission.

12.4.5. Parallel operation -- Each qualifying facility shall agree to operate in parallel with the electric utility; provided that the qualifying facility complies with the utility's reliability and safety standards on file with the Commission.

12.5. Procedure for establishing rates for purchases.

12.5.1. Utilities and qualifying facilities shall negotiate a mutually acceptable rate for purchase of power taking into consideration all relevant factors, including the factors set forth in Rule 12.6.4. Prior to becoming effective, all negotiated contracts between utilities and qualifying facilities shall be filed with the Commission and approved by the Commission. Unless the Commission specifically modifies or disapproves a negotiated contract within thirty (30) days after filing, the contract shall be approved, as filed.

12.5.2. If a utility and a qualifying facility cannot negotiate terms acceptable to both parties, either party, or both, may request an informal conference with the Commission Staff wherein the matters in controversy will be discussed. If after such conference a resolution acceptable to both parties has not been reached, either party, or both, may file a formal complaint with the Commission, pursuant to the Commission's Rules of Practice and Procedure, 150 C.S.R. 1, setting forth in detail the matters in controversy; the basis for that party's position, including the necessary data in support thereof; and a history of the negotiations.

12.5.2.a. Prefiled testimony shall be required unless waived by the Commission for good cause shown.

12.5.2.b. The Commission shall make such order as necessary to reasonably resolve the controversy.

12.6. Rates for purchases.

12.6.1. Rates for purchases -- Rates for purchases shall:

12.6.1.a. Be just and reasonable to the electric consumer and in the public interest, and

12.6.1.b. Not discriminate against qualifying cogeneration and small power production facilities: however, nothing in this rule shall require an electric utility to pay more than the avoided costs for purchases, as those costs are defined in Rule 12.1.1.f.

12.6.2. Relationship to avoided costs:

12.6.2.a. For purposes of this paragraph, "new capacity" means any purchase from capacity of a qualifying facility, construction of which was commenced on or after November 9, 1978.

12.6.2.b. Rates for purchases of new capacity shall equal the avoided costs determined after consideration of the factors set forth in Rule 12.6.4., regardless of whether the electric utility making such purchases is simultaneously making sales to the qualifying facility. A rate so determined satisfies the requirements of Rule 12.6.1.

12.6.2.c. A rate for purchases (other than from new capacity) may be less than the avoided cost if the Commission determines that a lower rate is consistent with Rule 12.6.1 and is sufficient to encourage cogeneration and small power production.

12.6.2.d. In the case in which the rates for purchases are based upon estimates of avoided costs over the specific term of the contract or other legally enforceable obligation, the rates for such purchases do not violate this rule if the rates for such purchases differ from avoided costs at the time of delivery.

12.6.3. Purchases "as available" or pursuant to a legally enforceable obligation -- Each qualifying facility shall have the option either:

12.6.3.a. To 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 costs calculated at the time of delivery; or

12.6.3.b. To provide energy or capacity pursuant to a legally enforceable obligation for the delivery of energy or capacity over a specified term, in which case the rates for such purchases shall, at the option of the qualifying facility exercised prior to the beginning of the specified term, be based on either:

12.6.3.b.1. The avoided costs calculated at the time of delivery, or

12.6.3.b.2. The avoided costs calculated at the time the obligation is incurred.

12.6.4. Factors affecting rates for purchases -- In determining avoided costs, the following factors shall, to the extent practicable, be taken into account:

12.6.4.a. The data provided pursuant to Rule 12.3., including Commission review of any such data:

12.6.4.b. The availability of capacity or energy from a qualifying facility during the system daily and seasonable peak period, including:

12.6.4.b.1. The ability of the utility to dispatch the qualifying facility;

12.6.4.b.2. The expected or demonstrated reliability of the qualifying facility;

12.6.4.b.3. The terms of any contract or other legally enforceable obligation, including the duration of the obligation, termination notice requirement and sanctions for noncompliance;

12.6.4.b.4. The extent to which scheduled outages of the qualifying facility can be usefully coordinated with scheduled outages of the utility's facilities;

12.6.4.b.5. The usefulness of energy and capacity supplied from a qualifying facility during system emergencies, including its ability to separate its load from its generation;

12.6.4.b.6. The individual and aggregate value of energy and capacity from qualifying facilities on the electric utility's system; and

12.6.4.b.7. The smaller capacity increments and the shorter lead times available with additions of capacity from qualifying facilities.

12.6.4.c. The relationship of the availability of energy or capacity from the qualifying facility as derived in Rule 12.6.4.b. to the ability of the electric utility to avoid costs, including the deferral of capacity additions and the reduction of fossil fuel use; and

12.6.4.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, if the purchasing electric utility generated an equivalent amount of energy itself or purchased an equivalent amount of electric energy or capacity.

12.6.5. Periods during which purchases are not required.

12.6.5.a. Any electric utility which gives reasonable notice pursuant to Rule 12.6.5.b, below, will not be required to purchase electric energy or capacity during any period during which, due to operational circumstances, purchases from qualifying facilities will result in costs greater than those which the utility would incur if it did not make such purchases, but instead generated an equivalent amount of energy itself. The costs referred to herein shall be calculated in the same or a similar manner that was used to calculate the costs for the purpose of establishing the rate for purchases from the qualifying facility.

12.6.5.b. For the purposes of Rule 12.6.5.a, reasonable notice is that which provides each affected qualifying facility adequate time to cease delivery of energy or capacity to the electric utility.

12.6.5.b.1. Any utility failing to provide reasonable notice will be required to pay the contract rate for such purchase of energy or capacity from the facility.

12.6.5.c. A claim by an electric utility that such period as described in Rule 12.6.5.a, has occurred or will occur is subject to verification by the Commission.

12.7. Rates for sales.

12.7.1. Rates for sales shall be just and reasonable and in the public interest and not discriminate against any qualifying facility in comparison to rates for sales to other customers served by the electric utility.

12.7.2. When a qualifying facility's load or other cost-related characteristics are similar to those of other customers receiving service under a given rate schedule, the same rate schedule shall apply to the qualifying facility. If there is no existing rate schedule applicable to the qualifying facility, the utility shall file with the Commission a proposed tariff and supporting cost-of-service data.

12.7.3. Upon request of a qualifying facility, each electric utility shall provide supplementary power, back-up power, maintenance power and interruptible power; provided, however, that if, after public notice and hearing, it is determined that compliance with any of these requirements will impair the electric utility's ability to render adequate service to its customers or will place an undue burden on the electric utility, then the Commission may waive such requirement(s).

12.7.3.a. The rates for sale of back-up power or maintenance power 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 shall 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.

12.8. Interconnection costs.

12.8.1. Each qualifying facility shall be obligated to pay any interconnection costs as defined in Rule 12.1.1.g. Such costs shall be assessed on a nondiscriminatory basis with respect to other customers with similar load characteristics. Reasonable costs of interconnection shall be negotiated by the qualifying facility and the utility, and any disputes shall be resolved in accordance with the procedure established in Rule 12.5.2.

12.8.2. The utility shall be reimbursed by the qualifying facility at the time interconnection costs are incurred. Upon petition by any party involved and for good cause shown, the Commission may allow for reimbursement of costs over a reasonable period of time and upon such conditions as the Commission may determine: Provided, however, that no other customers of the utility shall bear any of the costs of interconnection.

12.9. System emergencies or maintenance period -- During a system emergency:

12.9.1. A qualifying facility will be required to supply energy or capacity only to the extent:

12.9.1.a. Provided by contract between the utility and qualifying facility; or

12.9.1.b. Ordered under Section 202(c) of the Federal Power Act;

12.9.2. An electric utility may discontinue:

12.9.1.a. Purchases from a qualifying facility if such purchases would contribute to the emergency; and

12.9.2.b. Sales to a qualifying facility: Provided, that such discontinuance is on a nondiscriminatory basis.

12.9.3. During system maintenance periods -- An electric utility may discontinue purchases from a qualifying facility during periods of maintenance when safety conditions would require the de-energizing of facilities.

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W. Va. Code R. § 150-3-12

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