7. Conclusion

Based on our consideration of the record, we adopt the policies and procedures to implement AB 1613 as described in this decision consistent with PURPA and avoided cost principles. 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 avoided cost price to be offered for excess electricity under AB 1613 shall 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 local RA areas, identified pursuant to the CAISO's local capacity technical study. There shall be a pass through from the Seller to the Buyer of any GHG compliance costs associated with the excess electricity sold. However, any such pass through shall be capped at the GHG compliance costs of the proxy CCGT unit. All GHG attributes associated with the excess electricity sold shall also be transferred to the Buyer. Finally, there shall be a two tier pricing scheme such that AB 1613 CHPs complying with AB 1613 as set forth in the CEC's eligibility requirements shall be paid the AB 1613 avoided cost price based on the MPR as set forth herein. Should a CHP under an AB 1613 contract fail to comply with AB 1613 and the CEC's eligibility requirements then it will receive payments pursuant to the most current short run avoided cost in place.

There shall be two contracts offered under the program. A standard contract shall 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.¹¹⁵

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.

¹¹⁵ D.10-12-055 reset this 6-month deadline so that the advice letter deadline is now June 17, 2011.