OAR 860-029-0120
Standard Power Purchase Agreements
(1)
Each public utility must offer standard power purchase agreements to eligible qualifying facilities.(2)
Each public utility must file with the Commission a schedule outlining the process for acquiring a standard power purchase agreement that is consistent with the provisions of OAR 860 division 029 and Commission policy and that satisfies the requirements of this rule.(3)
Qualifying facilities have the unilateral right to select a purchase term of up to 20 years for a power purchase agreement. Qualifying facilities electing to sell firm output at fixed-prices have the unilateral right to a fixed-price term of up to 15 years.(4)
A qualifying facility may specify a scheduled commercial on-line date consistent with the following:(a)
Anytime within three years from the date of agreement execution;(b)
Anytime later than three years after the date of agreement execution if the qualifying facility establishes to the utility that a later scheduled commercial on-line date is reasonable and necessary and the utility agrees.(5)
Unless otherwise excused under the power purchase agreement, the utility is authorized to issue a Notice of Default if the qualifying facility does not meet the scheduled commercial on-line date in the standard power purchase agreement. If a Notice of Default is issued for failure to meet the scheduled commercial on-line date in the power purchase agreement, the qualifying facility has one year in which to cure the default for failure to meet the scheduled commercial on-line date, during which the public utility may collect damages for failure to deliver. Damages are equal to the positive difference between the utility’s replacement power costs less the prices in the standard power purchase agreement during the period of default, plus costs reasonably incurred by the utility to purchase replacement power and additional transmission charges, if any, incurred by the utility to deliver replacement energy to the point of delivery.(6)
Subject to the one-year cure period in section (5) above, a utility may terminate a standard power purchase agreement for failure to meet the scheduled commercial on-line date in the power purchase agreement, if such failure is not otherwise excused under the agreement.(7)
The standard power purchase agreement must include a mechanical availability guarantee (MAG) for intermittent qualifying facilities as follows:(a)
For wind facilities, a 90 percent overall guarantee starting three years after the commercial operation date for qualifying facilities with new contracts or one year after the commercial operation date for qualifying facilities that renew contract or enter into a superseding contract, subject to an allowance for 200 hours of planned maintenance per turbine per year that does not count toward calculation of the overall guarantee.(b)
A qualifying facility may be subject to damages for its failure to meet the MAG calculated by:(A)
Determining the amount of the “shortfall” for the year, which is the difference between the projected average on- and off-peak net output from the project that would have been delivered had the project been available at the minimum guaranteed availability for the contract year and the actual net output provided by the qualifying facility for the contract year;(B)
Multiplying the shortfall by the positive difference, if any, obtained by subtracting the Contract Price from the price at which the utility purchased replacement power; and(C)
Adding any reasonable costs incurred by the utility to purchase replacement power and additional transmission costs to deliver replacement power to the point of delivery, if any.(8)
A public utility may issue a Notice of Default, and subsequently terminate a standard power purchase agreement pursuant to its terms and limitations, for failure to meet the MAG if the qualifying facility does not meet the MAG for two consecutive years if such failure is not otherwise excused by the power purchase agreement.
Source:
Rule 860-029-0120 — Standard Power Purchase Agreements, https://secure.sos.state.or.us/oard/view.action?ruleNumber=860-029-0120.