Texas Administrative Code › Title 16 - ECONOMIC REGULATION › Part 2 - PUBLIC UTILITY COMMISSION OF TEXAS › Chapter 25 - SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS › Subchapter J - COSTS, RATES AND TARIFFS › Division 1 - RETAIL RATES › Section 25.242 - Arrangements Between Qualifying Facilities and Electric Utilities

Current through Reg. 49, No. 28; July 12, 2024
(a) Purpose. The purpose of this section is
					 to regulate the arrangements between qualifying facilities, retail electric
					 providers with the price to beat obligation (PTB REPs), and electric utilities
					 as required by federal and state law in a manner consistent with the
					 development of a competitive wholesale power market.
(b) Application. This section applies to all
					 PTB REPs and to all electric utilities, including transmission and distribution
					 utilities. The provisions of this section concerning purchase or sale of
					 electricity between an electric utility and a qualifying facility do not apply
					 to a transmission and distribution utility. This section does not apply to
					 municipal utilities, river authorities, or electric cooperatives.
(c) Definitions. The following words and
					 terms, when used in this section, shall have the following meanings, unless the
					 context clearly indicates otherwise:
(1)
					 Avoided costs--The incremental costs to a PTB REP, or electric utility of
					 electric energy, which, but for the purchase from the qualifying facility or
					 qualifying facilities, such PTB REP or electric utility would generate itself
					 or purchase from another source.
(2) Back-up power--Electric energy or
					 capacity supplied to replace energy or capacity ordinarily generated by a
					 qualifying facility's own generation equipment during an unscheduled outage of
					 the qualifying facility.
(3) Cost
					 of decremental energy--The cost savings to a utility associated with the
					 utility's ability to back-down some of its units or to avoid firing units, or
					 to avoid purchases of power from another source because of purchases of power
					 from qualifying facilities.
(4)
					 Electric utility--For purposes of this section, an integrated investor-owned
					 utility that has not unbundled in accordance with Public Utility Regulatory Act
					 §39.051.
(5) Firm power--From
					 a qualifying facility, power or power-producing capacity that is available
					 pursuant to a legally enforceable obligation for scheduled availability over a
					 specified term.
(6) Host
					 utility--The utility with which the qualifying facility is directly
					 interconnected.
(7) Maintenance
					 power--Electric energy or capacity supplied during scheduled outages of the
					 qualifying facility.
(8) Market
					 price--The market-clearing price of energy (MCPE) in the balancing energy
					 market for the Electric Reliability Council of Texas (ERCOT) congestion zone in
					 which the power is produced, minus any administrative costs, including an
					 appropriate share of ERCOT-assessed penalties and fees typically applied to
					 power generators.
(9) Non-firm
					 power from a qualifying facility--Power provided under an arrangement that does
					 not guarantee scheduled availability, but instead provides for delivery as
					 available.
(10) Parallel
					 operation--A mode of operation which enables a qualifying facility to export
					 automatically any electric capacity which is not consumed by the qualifying
					 facility or the user of the qualifying facility's output. Parallel operation
					 results in three possible states of operation at any point in time:
(A) The qualifying facility is generating an
					 amount of capacity that is less than the customer's load. The customer is
					 therefore a net consumer.
(B) The
					 qualifying facility is generating an amount of capacity that is more than the
					 customer's load. The customer is therefore a net producer.
(C) The qualifying facility is generating an
					 amount of capacity that is equal to the customer's load. The customer is
					 therefore neither a net producer nor a net consumer.
(11) Purchase--The purchase of electric
					 energy or capacity or both from a qualifying facility by a PTB REP or electric
					 utility.
(12) Purchasing
					 utility--The electric utility that is purchasing a qualifying facility's
					 capacity and/or energy.
(13)
					 Quality of firmness of a qualifying facility's power--The degree to which the
					 capacity offered by the qualifying facility is an equivalent quality substitute
					 for firm purchased power or an electric utility's own generation. At a minimum
					 the following factors should be considered in determining quality of firmness:
(A) reliability of generation and
					 interconnection;
(B) forced outage
					 rate;
(C) availability during peak
					 periods;
(D) the terms of any
					 contract or other legally enforceable obligation, including, but not limited
					 to, the duration of the obligation, performance guarantees, termination notice
					 requirements, and sanctions for noncompliance;
(E) maintenance scheduling;
(F) availability for system emergencies,
					 including the ability to separate the qualifying facility's load from its
					 generation;
(G) the individual and
					 aggregate value of energy and capacity from qualifying facilities on the
					 electric utility's system;
(H)
					 other dispatch characteristics;
(I)
					 reliability of primary and secondary fuel supplies used by the qualifying
					 facility; and
(J) impact on utility
					 system stability.
(14)
					 Retail electric provider with the price to beat obligation (PTB REP)--A REP
					 that makes available a PTB pursuant to PURA §39.202.
(15) Sale--The sale of electric energy or
					 capacity or both supplied to a qualifying facility.
(16) Supplementary power--Electric energy or
					 capacity regularly used by a qualifying facility in addition to that which the
					 facility generates itself.
(17)
					 System emergency--A condition on a utility's system that is likely to result in
					 imminent significant disruption of service to customers or is imminently likely
					 to endanger life or property.
(18)
					 Transmission and distribution utility (TDU)--As defined in §
												RSA 25.5
					 of this title (relating to Definitions).