Oregon Administrative Rules › Chapter 860 - PUBLIC UTILITY COMMISSION › Division 150 - Renewable Natural Gas › Section 860-150-0200 - Incremental Costs

Current through Register Vol. 63, No. 7, July 1, 2024
(1) For the
			 purposes of ORS
			 757.396,
			 a large natural gas utility must calculate its total incremental annual cost as
			 follows:
(a) A large natural gas utility must
			 apply a cost-effectiveness calculation to all RNG that the utility acquires for
			 its retail natural gas customers. The cost-effectiveness calculation must be
			 consistent with the methodology used to evaluate RNG resources in the utility's
			 most recently acknowledged integrated resource plan, or integrated resource
			 plan update, or as the utility may otherwise be directed by order of the
			 Commission;
(b) For each purchase
			 of RNG from a third party that is not cost effective according to the
			 calculation in subsection (1)(a) of this rule, the dollar value of the
			 difference between the levelized cost of the purchased RNG and the levelized
			 cost ofa cost-effective purchase of a comparable quantity of geologic natural
			 gas of the same vintage and contract duration represents the incremental cost
			 of that purchased RNG. During each year, the incremental cost of all RNG
			 purchases will be summed to calculate their contribution toward the utility's
			 total annual incremental cost;
(c)
			 For each purchase of RNG from a third party that is cost effective according to
			 the calculation in subsection (1)(a) of this rule, the dollar value of the
			 difference between the levelizedcost of the purchased RNG and the levelized
			 cost of a comparable quantity of geologic natural gas of the same vintage and
			 contract duration represents the cost savings of that purchased RNG. During
			 each year, the cost savings of all RNG purchases will be summed and subtracted
			 from the incremental cost of RNG purchases described in subsection
			 (1)(c);
(d) For each qualified
			 investment that is not cost effective according to the calculation in
			 subsection (1)(a) of this rule, the dollar value of the difference between the
			 cost of the qualified investment plus operating costs associated with that
			 investment and a cost-effective proxy resource represents the incremental cost
			 of that qualified investment;
(e)
			 For each qualified investment that is cost effective according to the
			 calculation in subsection (1)(a) of this rule, the dollar value of the
			 difference between the cost of the qualified investment plus operating costs
			 associated with that investment and a proxy resource represents the cost
			 savings of that qualified investment;
(f) During each year, the levelized
			 incremental costs associated witheach qualified investment described in
			 subsections (1)(d)and (1)(e)must be summed to calculate a gross total annual
			 incremental levelized cost; and
(g)
			 To calculate a net total annual incremental levelized cost, a large natural gas
			 utility must sum the value calculated according to subsection (1)(b) and the
			 gross total annual incremental levelized cost according to subsection (1)(f),
			 then subtract from this total any value received during that year by a large
			 natural gas utility upon any resale of RNG to an entity other than a retail
			 utility customer, including any associated RTCs.