OAR 860-029-0044: Allocation of Costs to Related Deliveries from Off-system Qualifying Facilities

(1) If the merchant function of the purchasing public utility has access to information that the proposed Point of Delivery in an off-system qualifying facility's request for a draft standard power purchase agreement may be unavailable due to transmission capacity constraints or competing uses of reserved transmission, the purchasing public utility will provide the qualifying facility with written notice of the possible constraint or reserved use and if applicable, the purchasing public utility's decision to decline the qualifying facility's proposed Point of Delivery. A purchasing public utility must act reasonably and without undue discrimination in declining the qualifying facility's proposed Point of Delivery. Nothing in this section prevents the purchasing public utility from proposing an alternate Point of Delivery or requires the purchasing public utility to undertake informational or other studies or to change its standard study processes to seek information not reasonably in its possession during the contracting process. (2) If the qualifying facility proposes an alternate Point of Delivery in response to a purchasing public utility's written notice under section (1), the purchasing public utility will have 15 business days to complete its review of proposed alternate Point of Delivery and provide the notification described in section (1) if applicable. (3) Provided that the purchasing public utility and the qualifying facility have agreed upon a Point of Delivery, the standard power purchase agreement for an off-system qualifying facility may, at the public utility's discretion, include a provision specifying that costs to construct transmission-service related Network Upgrades of the purchasing public utility's system necessary for transmission service for a qualifying facility's output may be allocated to the qualifying facility by Commission order after the process described in sections (4), (5), and (6) of this rule. (4) If the purchasing public utility chooses to include a transmission-service-related Network Upgrade cost-allocation provision in the standard power purchase agreement for an off-system qualifying facility, the purchasing public utility must: (a) Specify in the power purchase agreement that the development period in the standard power purchase agreement does not commence until after the processes in section (4) and, if applicable, sections (5) and (6), are complete; and the scheduled commercial operation date, fixed price term, and purchase term in the power purchase agreement shall each be extended on a day-for-day basis until such processes are complete; (b) No later than 15 business days after the Effective Date of the standard power purchase agreement, submit an application to the appropriate transmission provider requesting designation of the qualifying facility as a network resource and requesting network transmission service for the purpose of transmitting the power purchased from the qualifying facility to the purchasing public utility's load; (c) Request an effective date for commencement of network transmission service for the qualifying facility that is: (A) 90 days prior to the scheduled commercial operation date; or (B) As soon as practicable after the Effective Date of the executed standard power purchase agreement if the scheduled commercial operation date is less than 90 days following the Effective Date. (d) No later than five business days after the purchasing public utility's receipt of a response to the application submitted under subsection (b), inform the qualifying facility of the transmission provider's response; (e) No later than 15 business days after the purchasing public utility's receipt of a response to the application submitted under subsection (b), notify the qualifying facility in writing whether it has determined that costs should be allocated to the qualifying facility and, if so, what costs. Within 15 business days of receiving that cost allocation determination, the qualifying facility must notify the purchasing public utility of whether it objects to its cost allocation determination. (f) If the purchasing public utility is notified of an objection to its cost allocation determination under subsection (e), it must initiate a proceeding with the Commission by filing its proposed cost allocation determination within 15 business days. (5) Upon receipt of a request for a cost allocation determination under subsection (4)(e), the Commission will conduct a proceeding at which the purchasing public utility and qualifying facility will each have opportunity to present their respective positions to the Commission as to the proper allocation of the costs of transmission-service-related Network Upgrades. After providing notice and opportunity to comment regarding a request filed under subsection (4)(f), the Commission will issue an order regarding the appropriate allocation of costs of transmission service Network Upgrades. (6) After receipt of notice under subsection (4)(e) of this section that the purchasing public utility is seeking a cost allocation determination, but no later than 15 business days after any Commission order allocating costs of transmission-service-related Network Upgrades to the qualifying facility, the qualifying facility may terminate the power purchase agreement upon written notice to the purchasing public utility or may request the public utility agree to an alternate Point of Delivery under section (2). The qualifying facility's timely termination of the standard power purchase agreement under this section will not be an event of default, and no damages or other liabilities under the power purchase agreement will be owed by or to either party. If the qualifying facility requests an alternate Point of Delivery, the public utility's response is subject to the requirements in this rule. (7) Notwithstanding the other sections in this rule, nothing prevents the purchasing public utility and qualifying facility from agreeing to amend the standard power purchase agreement to address transmission-service-related Network Upgrade costs or to substitute a new Point of Delivery.