Current through February 27, 2024
(a) Unless otherwise provided by law, an
electric utility shall purchase, in accordance with (c) - (k) of this section,
any electric power which is made available from a qualifying
facility.
(b) Notwithstanding (a)
of this section, an electric utility is not required to purchase electric power
from a qualifying facility if
(1) due to
operational circumstances, purchases from a qualifying facility result in costs
greater than those which the electric utility would have incurred if it had not
made such purchases but had instead generated or purchased an equivalent amount
of power; if purchases have started, an electric utility seeking to stop
purchase under this paragraph shall notify in writing each affected qualifying
facility in time for the qualifying facility to stop the delivery of electric
power to the electric utility, or the electric utility shall pay the expense it
would have incurred had power continued to be purchased from the qualifying
facility at established rates during the same period;
(2) during a system emergency, purchases from
a qualifying facility would further contribute to the emergency; or
(3) with the agreement of the qualifying
facility, the electric utility transmits the electric power to another electric
utility which is obligated to purchase that electric power as if it were
supplied directly by the qualifying facility.
(c) Rates for purchases of electric power
must be just and reasonable and in the public interest must not discriminate
against qualifying facilities or adversely affect the consumers of the electric
utility.
(d) For purchases from a
qualifying facility, rates must be based on the cost of energy and capacity
which the electric utility avoids by virtue of its interconnection with the
qualifying facility. The following factors must, to the extent practicable, be
taken into account:
(1) the data provided
under 3 AAC
50.790(e).
(2) the availability of capacity or energy
from a qualifying facility during the system daily and seasonal peak periods,
including
(A) the ability of the utility to
dispatch the qualifying facility;
(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, termination notice requirements, and
sanctions for non-compliance;
(D)
the extent to which scheduled outages of the qualifying facility can be
usefully coordhiated with scheduled outages of the utility's
facilities;
(E) the usefulness of
energy and capacity supplied from a qualifying facility during system
emergencies, including its ability to separate its load from its
generation;
(F) the individual and
aggregate value of energy and capacity from qualifying facilities on the
electric utility's system; and
(G)
the smaller capacity increments and the shorter lead times available with
additions of capacity from qualifying facilities;
(3) the relationship of the availability of
energy or capacity from the qualifying facility as derived in (2) if this
subsection, to the ability of the electric utility to avoid costs, including
the deferral of capacity additions and the reduction of fossil fuel use;
and
(4) the cost 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.
(g) An electric utility which is legally
obligated to obtain all of its requirements for electric power from another
electric utility shall submit to the commission the requisite avoided cost data
of its supplying utility and the rates at which it currently purchases such
energy and capacity. The supplying electric utility shall make the necessary
information available to the purchasing electric utility at the time its
wholesale power rates are approved by the commission.
(h) An electric utility or qualifying
facility may agree by special contract, subject to
3
AAC 48.390, to different rates, terms, or conditions
for purchases than otherwise required by this section. A contract between an
electric utility and a qualifying facility is valid if the commission
determines the rates, terms, or conditions for purchases are just and
reasonable to the customers of the electric utility and in the public interest.
The contract may not be nullified under
3
AAC 50.770(b) (1) without prior
commission approval.
(i) For
purchases of energy from a qualifying facility with a design capacity of 100
kilowatts or less, the rates must be calculated supported, and filed as
follows:
(1) unless otherwise ordered by the
commission, the avoided energy costs must be expressed in
cents-per-kilowatt-hour and determined from the sum of fuel and variable
operation and maintenance expenses and the energy portion of purchased-power
expense for the same period used by the utility to project costs and sales in
its adjustment clause methodology, approved by the commission, updated by
subsequent fuel costs, and divided by the number of kilowatt-hours sold for the
same time period expenses and kilowatt-hours sold associated with generation
that is not avoided by virtue of purchases from qualifying facilities with a
design capacity of 100 kilowatts or less must be specifically excluded from the
computation of avoided costs;
(2)
an electric utility shall submit to the commission the following information
for the same period used in support of the utility's adjustment clause filing,
to support rates for purchases of energy:
(A)
the data and computation of avoided energy costs specified in (1) of this
subsection; and
(B) at its option,
in addition to the information required in (A) of this paragraph, the data and
computation of avoided energy costs based on any other methodology deemed
appropriate and justifiable by the electric utility;
(3) the utility's request to use an alternate
methodology in (2)(B) of this subsection is subject to review and advance
approval of the commission.
(j) An electric utility shall submit to the
commission the information necessary to support the methodology and
calculations used in developing rates for purchased power based on avoided
energy and capacity costs.
(k) Each
qualifying facility shall have the option either
(1) 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
(2) to provide energy or capacity under 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 before the beginning of the specified
term, be based on either
(A) the avoided costs
calculated at the time of delivery; or
(B) the avoided costs calculated at the time
the obligation is incurred.
Authority:AS
42.05.141
AS 42.05.151
AS 42.05.291
AS 42.05.301
AS 42.05.361
AS 42.05.381
AS
42.05.391
