Purchase of Energy From and Sales of Energy to Small Power Producers & Cogenerators

The Association will purchase at its “avoided costs” power and energy from qualifying facilities in accordance with Sections 201 and 210 of PURPA.  The Association will also sell power and energy to the qualifying facility as it may require.  The Association will sell the qualifying facility its needs over and above its generating capabilities or, at the qualifying facility’s option, will purchase 100% of its generation output and sell to the qualifying facility 100% of its needs.

The Association will base “avoided costs” on that portion of its wholesale power cost which, by virtue of the purchase from the qualifying facility, it now avoids.

Energy cost avoidance will equal the wholesale cost of energy on a one-for-one basis at the point of interconnection.

Firm capacity cost avoidance will equal the wholesale cost of firm capacity on a one-for-one basis for all capacity the qualifying facility can provide on an equally firm basis as the Association’s wholesale power supplier.  Non-firm or intermittent capacity will not qualify for payment.

Power and energy sales to the qualifying facility shall be made at standard rates.

PURPA provides that the other Association members shall not subsidize the qualifying, facility.  Thus, all costs including engineering, construction, material and related expenses are to be paid by the Small Power Producers and Cogenerators.

The Association and the other Association members are to be held harmless from all acts or omissions on the part of the qualifying facility.  The qualifying facility will be required to carry adequate insurance and will be required to reimburse the Association for its additional insurance premiums which may be caused by the connection of the qualifying facility.

The PURPA regulations also mandate that service to other Association members shall not be degraded because of the presence or connection of the qualifying facility.  The qualifying facility shall construct, operate and maintain its facilities or cause them to be constructed, operated and maintained, in a manner conforming to all existing safety codes, regulations and best operating practices.  Failure to comply shall be cause for disconnection of the qualifying facility.

Future costs or system improvements which may become necessary by reason of the continued connection of additional qualifying facilities to a Association facility shall be shared by all qualifying facilities that contribute to the need for the improvement to the Association facility.  The sharing of costs shall be prorated on a capacity basis at the time the cost is incurred.

The design of the interconnecting facilities and system modifications shall incorporate apparatus and devices compatible with those existing on the Association’s system and compatible with facilities other Small Power Producers and Cogenerators connect to the Association system.  The design shall incorporate features that will permit construction, operation and maintenance of the facility without disruption or degradation of service to the consumers served by the Association.

Metering of KW and KWH quantities shall be provided by “in” and  “out” meters as appropriate.  Based on readings of these meters, the Association will monthly render a statement showing in necessary detail the purchase by the Association, the sales by the Association and the net monies owed by the Association or due to the Association.

The Association will maintain an accurate and complete accounting of all expenses related to the application and connection of each Small Power Producer and Cogenerator and shall promptly bill the Small Power Producer or Cogenerator for all related expenses.  Related expense shall include but not be limited to labor, materials, insurances, overheads, legal services, consulting services, meter reading, switching costs, mileage and equipment costs.

The Association and the Small Power Producer or Cogenerator shall enter into a written agreement setting forth in necessary detail the manner in which the Association shall purchase and sell power and energy to the Small Power Producer or Cogenerator, the facilities to be constructed, the character of service, the planned mode of operation and maintenance of the facilities.  The agreement shall also detail the rate, billing and payment arrangements for power and energy transactions, the billing and payment procedures for Association expenses related to the Small Power Producer or Cogenerator and other items that are a necessary part of the agreement.

If the Small Power Producer or Cogenerator desires to enter into a sales agreement with another utility, the Association will wheel the power and energy at costs outlined in the Association’s Rate WH.  A loss calculation will be applied to all wheeling.  The member’s load shall be metered separately where power is sold to others.

All Small Power Producers and Cogenerators shall be governed by the Interconnection Standards.