CHP Feed-in Tariff
CA Assembly Bill 1613 (Blakeslee 2007) as amended by Assembly 2791 (Blakeslee 2008), codified in Public Utilities Code 2840, directed the CPUC, the California Energy Commission and the Air Resources Board to implement the Waste Heat and Carbon Emissions Reduction Act. Pursuant to this Act, the CPUC to establish a feed-in tariff (FiT) for combined heat and power (CHP) systems that are small (less than 20 megawatt), new (in operation after January 1, 2008) and highly efficient (operating above a 62% total efficiency).
Utility Tariff Sheets, Contracts and Pricing
The pricing for AB 1613 is specified in each utility's tariff sheet. Tariff sheets along with Standard Power Purchase and Sale Agreements (PPAs) for the program are available from the utility websites at:
CHP facilities interested in receiving a contract under the AB 1613 program should apply for program eligibility from the California Energy Commission (CEC) and for certification as a Qualifying Facility (QF) from Federal Energy Regulatory Commission (FERC).
In response to AB 1613, the CPUC opened rulemaking (R.)08-06-024. The rulemaking was divided into two Phases: Phase I established the rules of the program, the price paid and approved standard offer contracts for the purchase of excess electricity from eligible CHP generators. Phase II aimed to developed a "Pay-As-You-Save" (PAYS) pilot program for eligible CHP systems deployed in Government or Non-Profit sectors. Several decisions related to the program have been issued under this rulemaking:
- Decision (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 less than 5 MW.
- D.10-04-055 dismisses the joint Utilities' motion for stay of Decision (D.)09-12-042; modifies D.09-12-042; and denies rehearing of D.09-12-42, as modified.
- D.10-12-055 grants in part and denies in part the petition from the Joint Utilities for modification of Decision (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 Decision (D.)10-15-055 on issue of GHG Compliance costs; modifies decision, denies rehearing of decision as modified; and denies motion to stay.
In addition, FERC has issued three orders regarding the CHP FiT program. Download a Legal Summary of the three FERC Orders mentioned below.
- On July 15, 2010, FERC found that (1) the CHP generators from which the CPUC is requiring the IOUs to purchase energy and capacity must obtain QF status under the Public Utility Regulatory Policy Act (PURPA) and (2) the rate established by the CPUC for the standard offer contracts cannot exceed the avoided cost of the purchasing utility.
- On October 21, 2010, FERC issued an additional order which clarified that the state has a wide degree of latitude in setting avoided cost, can utilize a multi-tiered avoided cost rate structure, and that this approach is consistent with the avoided cost requirements set forth in Section 210 of PURPA.
- On January 20, 2011, FERC denied a rehearing of its Clarification Order issued in October.