Qualifying Facility and Combined Heat and Power Procurement Options

New Standard Offer Contracts for Qualifying Facilities <= 20MW

Beginning in 2020, facilities may elect to execute the standard offer contracts for a term of up to 12-years for new facilities and up to 7-years for existing facilities at the QF’s election. When executing the contract, facilities may opt for pricing determined either at time of contract execution or pricing determined at time of delivery. Energy prices for the new contracts are based on the locational marginal prices available at pricing nodes in the “CAISO network” while capacity prices are based on prices published in the Energy Division’s “ResourceAdequacy Report".  More information on the formulas used to calculate these pricing options can be found “here”.

Each IOU post its version of the standard offer contract on its website:

• PG&E
• SCE
• SDG&E

Qualifying Facilities and Combined Heat and Power Program:

CPUC's Quality Facilities and Combined Heat and Power Program (QF /CHP Program), as defined by the QF/CHP Settlement, includes six procurement options through which QF/CHP facilities may obtain a contract:

Standard Contracting Vehicles:

1. CHP Request for Offers (RFO) PPA.   CHP facilities with nameplate capacity greater than 5 MW are eligible to participate.  Pricing will be determined according to the executed PPA.  A pro forma contract is available for this procurement process.
2. Equal to or Less Than 20 MW PURPA PPA. Available to all QF's equal to or less than 20 MW. Facilities are paid capacity prices established in D.07-09-040 and energy prices as determined by Short Run Avoided Cost (SRAC). A standard offer contract is available for this procurement process.
3. Optional As-Available PPA. Available to CHP facilities larger than 20 MW, with annual average energy deliveries less than 131,400 MWh. These facilities must operate at a minimum 60% efficiency. A standard offer contract is available for this procurement process.
4. AB1613 Feed-in Tariff (FiT). Available to small, new, high efficiency CHP facilities. Utilities must purchase power at prescribed rates and conditions. See the Feed-in Tariff section below for more information.

Non-Standard Contracting Vehicles:

1. Utility Prescheduled Facility (UPF). Available to existing CHP facilities that convert to a utility controlled, dispatchable generation facility.
2. Bilateral Negotiated CHP PPA. Available to all CHP facilities. A CHP facility and a utility negotiate terms on a one-off, facility-specific basis.

Additionally, the utilities may hold other requests for offers, such as all-source requests for offers, in which CHP facilities may be eligible to participate.

As part of the QF/CHP Settlement (See Section 4.2 of the QF/CHP Settlement for details), IOUs were required to hold multiple CHP requests for offers (RFOs) to procure CHP to meet the megawatt and greenhouse gas emissions reduction goals of the QF/CHP Settlement. New and existing CHP facilities with nameplate capacities larger than 5 MW could participate. The table below links to IOU webpages that provide additional details on these RFOs held under the QF/Settlement:  

*RFO information not available online.

(1)  Small (less than 20 megawatts);

(2)  New (in operation after January 1, 2008); and

(3)  Highly efficient (operating above a 62% total efficiency).

The AB 1613 FiT allows facilities to sell power to IOUs at guaranteed rates and conditions. The CPUC approved the tariffs for IOUs starting in late 2011. Facilities using the AB 1613 FiT are summarized in each IOU's QF/CHP Program Semi-Annual Reports, available on the CPUC's QF/CHP program webpage.

Utility Tariff Sheets, Contracts, and Pricing

Pricing information for power supplied under AB 1613 contracts is specified in each utility's tariff sheet. Tariff sheets, along with Standard Power Purchase and Sale Agreements (PPAs), are available from each utility’s website:

*No site available

Eligibility

CHP facilities interested in receiving a contract under the AB 1613 FiT must apply for and receive certification as an eligible CHP facility from the California Energy Commission (CEC) and must apply for and receive certification as a Qualifying Facility (QF) from the Federal Energy Regulatory Commission (FERC).

• CEC Guidelines for AB1613 Certification
• FERC Guidelines for Obtaining QF Certification

 AB 1613 Procedural History Resources

In response to the passage of AB 1613 (Blakeslee 2007), the CPUC opened rulemaking R.08-06-024. The rulemaking was divided into two phases: Phase I established policies and procedures, the pricing options, and approved standard offer contracts for the purchase of excess electricity from eligible CHP generators. Phase II aimed to develop a "Pay-As-You-Save" (PAYS) pilot program for eligible CHP systems deployed in government or non-profit sectors. Due to lack of interest this pilot program was never offered. Several CPUC Decisions (formatted: D.Year-Month-Index Number) related to these developments have been issued under R.08-06-024:

• D.09-12-042 approved the rules for the utility tariffs and two standard offer contracts - one for facilities up to 20 MW and one for facilities with net output not greater than 5 MW.
• D.10-04-055 dismisses the Joint Utilities' motion for a stay of D.09-12-042; modifies D.09-12-042; and denies rehearing of D.09-12-042, as modified.
• D.10-12-055 grants in part and denies in part the petition from the Joint Utilities for modification of D.09-12-042.
• D.11-01-010 determines that a PAYS pilot will not be established due to lack of interest.
• D.11-04-033 grants limited rehearing of D.10-12-055 on the issue of GHG compliance costs; modifies the Decision, denies rehearing of the Decision as modified; and denies a motion to stay. 

In addition to rulings at the state level, the Federal Energy Regulatory Commission (FERC) issued three orders regarding the CHP AB 1613 FiT. A Legal Summary of the three FERC Orders is available online.