HomeMy WebLinkAboutOrd2000-014
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Sponsored by: Janke
Introduction Date: May 22, 2000
Public Hearing Date: June 12,2000
Enactment Date: June 12, 2000
CITY OF SEWARD, ALASKA
ORDINANCE 2000-14
AN ORDINANCE AMENDING THE SEWARD CITY CODE, CHAPTER
14.15, ELECTRICITY, AND THE CITY OF SEWARD ELECTRICAL
TARIFF, TO ADOPT RULES AND RATE METHODOLOGIES
APPLICABLE TO PURCHASES OF: POWER FROM QUALIFYING
FACILITIES.
WHEREAS, Section 210 (16 U.S.C.A. S 824a-3) of the Public Utility Regulatory Policies
Act of1978 (tlpURP A") and the Federal Energy Regulatory Commission' s (tlFERC' s") PURP A rules
(18 C.F.R. Part 292) require non-regulated electric utilities to implement FERC' s PURP A rules after
notice and opportunity for public hearing; and
WHEREAS, the City Council ofthe City of Seward is the regulatory body that is responsible
for the City of Seward, Electric Enterprise Fund (tlUtility") implementation ofFERC' s PURP A rules;
and
WHEREAS, PERC's PURPA rules generally require electric utilities to offer to purchase
power from, and sell power to, qualifYing facilities (tlQFs") at rates that are just and reasonable to the
electric utility's customers and which do not unduly discriminate against QFs; and
WHEREAS, a non-regulated electric utility may implement FERC's PURPA rules either by
adopting substantive regulations that are consistent with FERC's regulations or by applying FERC's
rules to individual QFs on a case-by-case basis; and .
WHEREAS, the City of Seward desires to implement FERC's PURPA rules by applying
them to individual QFs on a case-by-case basis; and
WHEREAS, FERC' S PURP A rules require electric utilities to place into effect standard rates
for purchases from QFs that have a design capacity of 100 kW or less; and
WHEREAS, the City of Seward desires to adopt procedural rules for implementing FERC's
PURPA rules on a case-by-case basis when responding to inquiries from QFs that have a design
capacity of greater than 100 kW; and
WHEREAS, the City of Seward desires to adopt schedules in the Utility's Electrical Tariff
that set forth the methodology for calculating the rates that will apply to contract purchases of power
from QFs that have a design capacity of greater than 100 kW and from QFs that have a design
capacity of 100 kW or less.
CITY OF SEWARD, ALASKA
ORDINANCE 2000-14
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA, that:
Section 1. Seward City Code Chapter 14.15, Electricitv, is amended by adding Article
7 (~ 14.15.710 - ~ 14.15.730) as follows:
Article 7. Rules for Responding to Inquiries from Qualifying
Facilities Having a Capacity of Greater Than 100 KW
14.15.710 Application, purpose, and waiver.
A. These rules govern the City of Seward, Electric Enterprise Fund ("Utility")
implementation ofthe cogeneration and small power production regulations prescribed by the Federal
Energy Regulatory Commission ("FERC"), 18 C.F.R. Part 292, as amended, under Section 210 of
the Public Utility Regulatory Policies Act of1978, as amended, 16 U.S.C. ~ 824a-3, ("pURPA"), as
such rules apply to qualified cogeneration and small power production facilities ("QFs") with a design
capacity of more than 100 kilowatts ("kW').
B. The purpose of these rules is to set forth guidelines for the implementation ofFERC's
cogeneration and small power production regulations on a case-by-case basis.
C. Any requirement in these rules may be waived, in whole or in part, or be modified by
the City Council of the City of Seward ("City Council") upon application and a showing of good
cause, provided that such waiver is not otherwise prohibited by applicable law.
14.15.715 Availability ofsystem cost data.
A. Except as provided for in B. of this section, no later than 60 days after the effective
date of this tariff, the Utility shall compile and maintain for public inspection upon request, the
following data, or data comparable thereto, to enable QFs to estimate the Utility's avoided costs:
1. The Utility's estimated avoided energy costs for various levels of purchases
from QFs, expressed in cents per kilowatt hour, for the current calendar year and each ofthe next five
years;
2. The Utility's plan for the addition of capacity by amount and type, for
purchases offirm energy and capacity, and for capacity retirements, for each of the next ten years;
and
3. The estimated capacity costs at completion of the planned capacity additions
and planned firm capacity purchases, on the basis of dollars per kilowatt, and the associated energy
costs of each unit, expressed in cents per kilowatt hour.
B. After public notice in the Utility's service area, and after opportunity for public
comment, the Utility may provide data different from those which are otherwise required by this
section if the Utility determines that avoided costs can be estimated from such data.
C. Except as otherwise required by applicable law, the Utility shall not be required to
disclose information that would compromise the integrity or confidentiality of the Utility's
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CITY OF SEWARD, ALASKA
ORDINANCE 2000-14
competitive power supply procurement process or that might otherwise result in the disclosure of
competitively sensitive information. The Utility may, at its sole discretion, require a QF to enter into
a confidentiality agreement prior to gaining access to competitively sensitive information.
14.15.720 Procedures for responding to inquiries from QFs.
A. Upon receiving a written request by a QF to sell power to the Utility, the Utility shall
provide to the requesting QF a copy of the Utility's "standard form contract" for interconnection,
power purchases, and power sales with a QF. The standard form contract shall be adopted, and
modified from time to time, by Council resolution. The standard form contract shall not constitute
an offer by the Utility to interconnect, purchase power, or sell power. Instead, the standard form
contract is intended solely to inform the QF regarding some ofthe general terms and conditions that
would typically apply to such transactions with a QF. The standard form contract shall contain a
number terms which will require negotiation between the Utility and the QF with respect to the
specific circumstances of the QF project being proposed.
B. After reviewing the standard form contract, the QF shall notify the Utility in writing
ifit desires to further pursue selling power to the Utility.
C. If the QF desires to further pursue selling power to the Utility, the Utility shall notify
the QF regarding what information the QF must provide to enable the Utility to (1) accurately
calculate its avoided cost and (2) determine what contract terms and conditions are appropriate given
the specific circumstances of the proposed QF project (facility).
D. The information to be provided by the QF under C. shall be determined by the Utility;
such information may include, but shall not be limited to, the following:
1. Detailed description of the facility;
2. Detailed explanation demonstrating that the facility qualifies as a "qualifying
facility" as that term is defined in 18 C.F.R. Part 292;
3. Precise location of the facility;
4. Nameplate electric generating capacity, net electric energy output, and plant
factor ofthe facility;
5. Minimum and maximum availability of firm capacity and/or energy from the
facility during the Utility's daily and seasonal peak periods;
6. Projected date on which deliveries of capacity and! or energy would commence;
7. Plans for facility construction; facility financing; and the acquisition of all
necessary property rights, permits, authorizations, and fuel contracts;
8. Expected and demonstrated annual and seasonal reliability of the facility;
9. Periods of scheduled maintenance and outages;
10. Plans for dispatchability of the facility;
11. If applicable, plans for acquiring access to adequate firm transmission services
and the terms and conditions of such access; and
12. Any other information the Utility deems appropriate under C. of this section.
E. In addition to the requirement in C. of this section, the QF shall advance to the Utility
a cash deposit in the amount of the Utility's estimated total costs of performing computer modelling
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CITY OF SEWARD, ALASKA
ORDINANCE 2000-14
to calculate the Utility's avoided costs associated with the specific characteristics of the facility, plus
a contingency margin of 10 percent. After all final calculations of the Utility's avoided costs are
complete, if the actual costs incurred by the Utility to perform such modelling are less than the
amount advanced by the QF, the Utility shall refund the difference to the QF within 30 days. If the
actual costs incurred by the Utility exceed the amount advanced by the QF, the QF shall pay the
Utility the difference within 30 days.
F. After the QF has satisfied all requirements provided for in C. through E., the Utility
shall initiate the collection and analysis of whatever data are necessary for the Utility to fulfill its
obligations under FERC' s cogeneration and small power production regulations. Within a reasonable
period of time after the QF has satisfied all the requirements provided for in C. through E., the Utility
Staff shall take one of the following actions:
1. Initiate negotiations with the QF for a contract specifying the charges, rates,
terms, and conditions of interconnection, purchases, and sales between the Utility and the QF, in
compliance with FERC's cogeneration and small power production regulations; or
2. Notify the City Council and any affected QF that, due to special circumstances,
the Utility is not obligated under FERC's cogeneration and small power production regulations to
purchase power from the QF, and provide sufficient explanation to the City Council in support of its
conclusion.
G. If the Utility Staff initiates negotiations with the QF pursuant to F.1. and the Utility
and the QF are able to successfully negotiate a contract for interconnection, purchases, and sales
within a reasonable period of time, the Utility Staff shall file the contract with the City Council for
its consideration under the procedures prescribed in Section 14.15.725.
H. If the Utility Staff and the QF are not able to successfully negotiate such a contract
within a reasonable period of time, or ifthe Utility Staff notifies the City Council that, due to special
circumstances, the Utility is not obligated under FERC's cogeneration and small power production
regulations to purchase power from the QF, the QF may file a written complaint with the Manager
of the Utility for consideration by the City Council under the procedures prescribed in
Section 14.15.730.
I. After public notice in the Utility's service area, the Utility may at any time apply to
FERC for a waiver from its obligations under FERC's cogeneration and small power production
regulations. In such event, the procedures provided for in this Article 7 may be suspended pending
final disposition of the Utility's application, including any administrative or judicial appeals.
14.15.725 Consideration of contracts between the Utility and a QF.
A. Consideration by the City Council of a contract for interconnection, purchases, and
sales between the Utility and a QF shall be undertaken only after notice and opportunity for written
comment and public hearing.
B. After the filing of such a contract with the City Council, the Utility shall provide
reasonable notice to the public regarding consideration of the contract in the following manner. Not
less then forty-five (45) days prior to the date of the public hearing, the Utility shall publish notice
of the hearing with the Utility's billing statement and/or in a newspaper of general circulation in the
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CITY OF SEWARD, ALASKA
ORDINANCE 2000-14
Utility's service area and post notice of the hearing at the Utility's main offices in a place that is
readily accessible to the public. The notice shall state: (1) the date, time, and place of the public
hearing; (2) a general description of the contract to be considered; (3) that any member of the public
may submit written comments concerning the contract no later than twenty-five (25) days prior to
the date of the public hearing; and (4) how a copy of the contract may be obtained.
C. The public hearing shall be held on the record. The City Council may suspend the
hearing in order to obtain any additional information it finds necessary to render a decision regarding
the contract. The City Council shall render a final decision regarding the contract by resolution on
the record.
D. In rendering its final decision, the City Council shall determine (1) whether the
contract is consistent with FERC's cogeneration and small power production regulations, and (2) if
the contract is consistent with FERC' s cogeneration and small power production regulations, whether
the contract should be approved as proposed.
E. Notwithstanding Seward City Code Section 14. 15.415, the City Council may approve,
and the Utility may perform, a contract that includes terms and conditions for interconnection with
a qualified QF if such interconnection is required by FERC's cogeneration and small power
production regulations.
14.15.730 Consideration of complaints.
A. Consideration of a complaint filed by a QF shall be undertaken only after notice and
opportunity for written comment and public hearing.
B. Upon receiving a written complaint by a QF, the Manager of the Utility shall forward
such complaint to the City Council. The Utility Staff shall have 30 days to file a written answer to
the complaint and a recommendation to the City Council.
C. After receipt of the Utility Staff's answer and recommendation by the City Council,
the Utility shall provide reasonable notice to the public regarding consideration of the QF' s complaint
in the following manner. Not less then forty-five (45) days prior to the date ofthe public hearing, the
Utility shall publish notice of the hearing with the Utility's billing statement and/or in a newspaper of
general circulation in the Utility's service area and post notice of the hearing at the Utility's main
offices in a place that is readily accessible to the public. The notice shall state: (1) the date, time, and
place of the public hearing; (2) a general description of the matter to be considered; (3) that any
member of the public may submit written comments concerning the matter no later than twenty-five
(25) days prior to the date of the public hearing; and (4) how a copy of the QF's complaint and the
Utility Staff's answer may be obtained.
D. The public hearing shall be held on the record. At its sole discretion, the City Council
may opt to appoint or hire a hearing officer to conduct the public hearing. The public hearing shall
afford reasonable opportunity for the QF, the Utility, and the public to present testimony. The City
Council may suspend the public hearing in order to obtain any additional information it finds
necessary to render a decision regarding the complaint. The City Council shall render a final decision
regarding the complaint by resolution on the record.
E. In rendering its final decision, the City Council shall determine whether the Utility
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ORDINANCE 2000-14
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Staff's position and recommendation are consistent with FERC's cogeneration and small power
production regulations. If the City Council finds that the Utility Staff's position and recommendation
are not consistent with FERC's cogeneration and small power production regulations, the City
Council shall take whatever action it deems appropriate to effect the Utility's compliance with
FERC's cogeneration and small power production regulations.
Section 2. The City of Seward Electrical Tariffis amended to add a new schedule titled
Contract Service for QualifYing Facilities Greater Than 100 kW, as follows:
Contract Service for Qualifying Facilities
Having a Capacity of Greater Than 100 KW
A. AVAILABILITY
Available to all qualifYing facilities ("QFs") as defined in the Public Utility Regulatory Policies
Act ("PURPA") (16 USC 824a-3) which are located within the City of Seward, Electric Enterprise
Fund ("Utility's") service territory or for which output is wheeled to the Utility pursuant to applicable
statutory requirements. This tariff applies only to QFs having a design capacity of greater than 100
kilowatts ("kW').
B. TYPE OF SERVICE
The Utility will purchase firm power from QFs under terms and conditions set forth in a
power purchase agreement negotiated between the Utility and the QF. A "standard form contract"
is available from the Utility solely for purposes of informing potential QFs regarding some of the
general terms and conditions that would typically apply under such an agreement.
C. CONDITIONS OF SERVICE
A contract between the QF and the Utility is required to quality for the rates paid under this
schedule for the purchase of firm and non-firm power. Service under this schedule is governed by
the provisions contained in the Seward City Code Chapter 14.15, Article 7, Rules for Responding to
Inquiries from Qualifying Facilities Greater than 100 KW.
D. RATES
The avoided cost methodology and QF rate formulas below provide a method that can be
used to determine rates for a variety ofQFs to develop a contract rate that is responsive to changes
in costs throughout the term of a QF contract.
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CITY OF SEWARD, ALASKA
ORDINANCE 2000-14
1. Avoided Firm Energy Price
The Avoided Firm Energy Price is based on the incremental cost of electric energy to the
Utility which, but for the purchase from the QF, the Utility would generate itself or purchase from
another source. Ifthe Utility is a contract customer of another supplying utility, the Avoided Firm
Energy Price shall be reduced to account for any costs, penalties, or sanctions which the Utility will
incur under such contract as a result of energy purchases from the QF. In any event, the Avoided
Firm Energy Price shall be adjusted as necessary to ensure that the Utility is in no worse a financial
position than it would have been had it not purchased the QF' s output. The actual quantity of energy
to be purchased by the Utility at the Avoided Firm Energy Price will be specified in the power
purchase agreement negotiated between the Utility and the QF.
2. Avoided Firm Capacity Price
The Avoided Firm Capacity Price will be established based on the incremental of electric
capacity which, but for the purchase from the QF, the Utility would generate itself or purchase from
another source over the next ten-year period. If the Utility is a contract customer of another
supplying utility, the Avoided Firm Capacity Price shall be reduced to account for any costs,
penalties, or sanctions which the Utility will incur under such contract as a result of capacity
purchases from the QF. In any event, the Avoided Firm Capacity Price shall be adjusted as necessary
to ensure that the Utility is in no worse a financial position than it would have been had it not
purchased the QF's output. Payment of Avoided Firm Capacity Prices will not begin until the first
year in which the Utility would have otherwise received output from the avoided capacity.
E. REVISION
This Rate schedule may be revised by resolution of the City Council of the City of Seward.
Section 3. The City of Seward Electrical Tariff is amended to add a new schedule titled
Non-Firm Contract Service for QualifYing Facilities With a Capacity of 100 kW or Less, as follows:
Non-Firm Contract Services for Qualifying
Facilities With a Capacity of 100 KW or Less
A. AVAILABILITY
Available to any person or entity which owns a qualifYing facility ("QF") within the City of
Seward, Light and Power Division's ("Utility's") area. This schedule is limited to cogeneration
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ORDINANCE 2000-14
facilities or small power production facilities with a capacity of 100 kilowatts (UkW") or less and is
offered pursuant to the provisions of the contract signed by the QF. This schedule is not applicable
to breakdown, standby, or resale electric service.
B. CHARACTER OF SERVICE
Single or three phase 60 hertz alternating current at the voltage and phase of the Utility's
established distribution system most available to the location of the QF.
C. RA TES FOR SALE OF ENERGY TO A OF
Rates for electricity provided to the QF will be the applicable retail rate from the Utility's
tariff
D. RATES FOR PURCHASE OF ENERGY FROM THE OF
The rates which the Utility will pay for non-firm energy supplied to it by the QF are the
Utility's estimated average avoided energy costs for the following 12-month period. The following
rate for purchase of non-firm power from QFs will be revised annually, or more frequently if deemed
necessary by the Utility.
The avoided cost for determining the non-firm power rate is calculated as follows:
(1)
Estimated energy charges and surcharges
for energy purchased from a supplying utility,
plus estimated diesel fuel expense for the
one-year period beginning January 1,2000
$2.343.800
(2)
Estimated kWh sales for the one-year
period beginning January 1, 2000
60,000,000
Non-firm power rate [(1)/(2)]
$0.03906
At any time, the rates resulting from the formula above may be adjusted if necessary to ensure
that the Utility is in no worse a financial position than it would have been had it not purchased the
QF's output.
E. CONDITIONS
The QF will be required to enter into a written Special Contract with the Utility prior to
interconnection between the Utility and the QF. This Special Contract shall contain all applicable
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CITY OF SEWARD, ALASKA
ORDINANCE 2000-14
terms and conditions which must be met and complied with by the QF. The Special Contract will be
subject to the approval of the City Council of the City of Seward.
F. REVISION
This Rate schedule may be revised by resolution of the City Council of the City of Seward.
Section 4. This ordinance shall take effect ten (10) days following its enactment.
ENACTED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, this
12 day ofJune, 2000.
. THE CITY OF SEWARD, ALASKA
r~.._ 11~<~0
Edgar Blatchford, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
Calhoon, Orr, King, Shafer, Clark, Blatchford
None
Brossow
None
ATTEST:
~4J~
Patrick Reilly
City Clerk
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