CHP Procurement Processes

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:  

 

Utility CHP Requests for Offers to Comply with the QF/CHP Settlement 

CHP Procurement Page

RFO 1

RFO 2

RFO 3

RFO 4

RFO 5

RFO 6

RFO 7

PG&E 

2011

2013

2014

 

 

 

 

SCE 

2011*

2013*

2014*

2016*

2017*

2018*

2019*

SDG&E 

2012

2013

2015

2016

 

 

 

RFOs for CHP not issued principally for the QF/CHP Settlement but which may contribute to meeting Settlement targets

SDG&E

2014

*RFO information not available online.

CAISO Regulatory Must-Take Generation

Effective December 2012, combined heat and power facilities that are no longer subject to a grandfathered power purchase agreement can retain a higher regulatory must-take generation scheduling priority for the capacity dedicated to their industrial hosts. CAISO's must-take submission requirements are available online.

AB 1613 Feed-in Tariff (FiT)

CPUC established the FiT to fulfill requirements in California Assembly Bill (AB) 1613 (Blakeslee 2007), the Waste Heat and Carbon Emissions Reduction Act as amended by AB 2791 (Blakeslee 2008). The AB 1613 FiT is a standard agreement for CHP facilities that are:

(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:

Utility Tariff Sheets, Contracts and Pricing

AB 1613 Website and
Tariff Sheets

Power Rating
≤ 20 MW

Net Output
 ≤ 5 MW

Power Rating
< 500 kW

PG&E AB 1613 Site

Schedule E-CHP

Schedule E-CHPS

Schedule E-CHPSA

 

Standard PPA

Standard PPA

Standard PPA

SCE AB 1613 Site

Form 14-798

Form 14-799

 

Standard PPA

Standard PPA

Standard PPA

SDG&E AB 1613 Site*

Schedule CHP

 

Standard PPA

Standard PPA

Standard PPA

*No site available

Short Run Avoided Cost (SRAC):

Several contracting options available to CHP employ the short run avoided cost (SRAC) energy pricing structure outlined in the QF/CHP Settlement. The Short-Run Avoided Cost reflects the IOU's costs that would be incurred at that instant to provide power if the QF did not exist as an alternate power source. The SRAC does not consider long-term investments such as the potential investment cost and potential availability of energy from constructing new facilities. SRAC fluctuates with seasonal demand, fuel costs, and many other variables. See the Section 10 of the QF/CHP Settlement Term Sheet for SRAC pricing details.

 Energy and capacity prices for QFs, including monthly SRAC prices, are available from each of the utilities' websites:

  • PG&E Pricing Information
  • SCE Pricing Information
  • SDG&E Pricing Information

 

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).

 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.

 

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