Loading...
HomeMy WebLinkAboutOrd2000-014 I I I 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 -2- I I I 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 -3- 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 -4- I I I 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 -5- CITY OF SEWARD, ALASKA ORDINANCE 2000-14 -- I 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. -6- I I I 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 -7- CITY OF SEWARD, ALASKA 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 -8- I I I 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 . ,.,....." (CIty Seal~""Of SE.t/',,, ~..,~" .......... ~..,,~ ~ (}oW'" fJ'O~, <:> ~ ~ ..- ~:..." = ! ___ --0, ~ - 'SEAL - :.! 1_: : \ : = . \ - . I ~ ..~~ ...",1. ill': ...':'.~ ~'"'. ~ '\~~.".'a~:.;:.co~* "Ii, Cf" OF ,..v,,'I" ',.......,,'~ -9-