7. Conclusion

Based on our consideration of the record, we adopt the policies and procedures to implement AB 1613 as described in this decision. We conclude that our authority to implement a program under AB 1613 includes authority to determine the price that the electrical corporations must offer to pay for excess electricity produced by eligible CHP facilities. This price is not limited to utility avoided cost or the CAISO market price. We further conclude that in order to ensure that ratepayers are held indifferent to the AB 1613 tariff, the price paid under the tariff shall include costs associated with societal benefits associated with the electricity provided by the eligible CHP systems. These benefits would include environmental and locational benefits.

Under AB 1613, all benefiting customers shall be allocated the costs and benefits of the program. Benefiting customers under this program shall include bundled service customers and customers receiving electric service from electric service providers or community choice aggregators.

We decline to adopt any limitation on the amount of excess electricity that may be procured under this program at this time. If an electrical corporation finds that the number of eligible CHP systems participating in this program has an adverse impact on its long-term resource planning or system reliability, it may file an application seeking authorization to establish a maximum kilowatthours limitation on the amount of excess electricity it must purchase under this program

The price to be offered for excess electricity under AB 1613 shall be be based on the costs of a combined cycle gas turbine and comprised of a fixed and a variable component. There shall also be a 10% location bonus applied to eligible CHP located in high-value areas. Additionally, there shall be a pass through from the Seller to the Buyer of any GHG compliance costs associated with the excess electricity sold. All GHG attributes associated with the excess electricity sold shall also be transferred to the Buyer.

There shall be two contracts offered under the program. A standard contract would be offered to all eligible CHP up to 20 MW, and a simplified contract will be offered to eligible CHP systems that export up to 5 MW. These contracts are included as Attachments A and B, respectively, of this decision. All electrical corporations, except Sierra Pacific, PacifiCorp, Mountain Utilities and BVES, shall be required to offer both contracts. Within six months of the effective date of this decision, each electrical corporation, unless otherwise excepted, shall file a Tier 2 Advice Letter to adopt an even more simplified contract for eligible CHP systems exporting 500 kW or less.

Sierra Pacific and PacifiCorp may offer either the simplified contract (Attachment B) or the even more simplified contract for eligible CHP systems exporting 500 kW or less discussed in this decision. Mountain Utilities and BVES shall not be required to offer a standard or simplified contract, but are not excused from complying with AB 1613. Except as discussed in this decision, we adopt the Final Staff Proposal and Energy Division staff's proposed modifications to the standard and simplified contracts.

We affirm Energy Division staff's statement that AB 1613 does not prohibit an eligible CHP facility or host customer from receiving other ratepayer funded initiatives, such as the SGIP. Therefore, an eligible CHP system could receive incentives from another program if it meets all the requirements from that other program.