Terms and Conditions of Feed-In Tariffs

Under the Feed-In tariffs,  Sellers will receive a fixed base rate determined by the current Market Price Referent (MPR) table for a period of 10, 15, or 20 years.  The rates are set and adjusted by Time of Use (TOU)[1]  factors as authorized by the Commission. The MPR is the predicted annual average cost of production for a combined-cycle natural gas fired baseload proxy plant.  Energy produced during utility peak hours should command a higher price reflecting the higher cost of generation during those hours.  Conversely, energy produced during off-peak hours is less valuable to the utility and the tariff should vary accordingly.  Using Time of Delivery (TOD) adjustment factors will result in annual payments under this program that better match with the MPR. 

The current MPR table and the TOD adjustment factors must be readily available in the Tariff or PPA.  The date that a contract is signed or that service under one of the tariffs is requested will determine which MPR table is applicable, but the date of actual commercial operation will determine which specific MPR rate is applicable.  Only BVES, Sierra Pacific and MU may use an annual average if they choose.  Table 3 is the current 2007 MPR table, adopted October 4, 2007 in Resolution E-4118.

Table 3. 2007 Market Price Referents

To calculate the actual price paid for eligible renewable power under this program, the metered energy production at the point of interconnection is multiplied by the applicable MPR and then by the applicable TOD adjustment factor.  So if:
 
A_t = kWh of energy distributed onto the utility grid at time “t”
B = MPR fixed at time of actual commercial operation
C_t= TOD adjustment factor for time “t”

then the price paid in $/kWh (P_t) for any given kWh produced and sold to the utility at time “t” would be calculated by the formula

  A_t  * B * C_t = P_t

The utilities filed Advice Letters in early August to establish their respective tariffs and agreements for purchase of eligible renewable generation from public water and wastewater facilities with a limited expansion to eligible renewable generation from non-water and waste-water facilities.

Illustrative TOU Period Payments for kWh sold under the Feed-In Tariffs ($/kWh)

*Average daily price for constant generation or random, intermittent generation with no storage, like a wind installation, adjusted for TOU.

**For sale of kWh between the hours of 8am and 6pm, or roughly the time when solar PV can be expected to provide power.  This is a statistical estimate of solar incidence over the given time period.  Solar will benefit from a slightly higher on peak rate.

This table is a representative un-weighted sample of the prices available for the purchase of renewable generation under the tariffs filed by the major IOUs.  These prices would be for a 15 year contract at a facility that starts operation in 2008.  The fixed MPR would be $0.09383/kWh, and this would be adjusted for actual time of delivery according to the schedule in the tariff under which service was requested.  These prices are illustrative only, actual prices will vary based on the technology and generation profiles of individual facilities.  Each facility interested in the feed-in tariff should perform its own calculations.