16 U.S.C. § 824a-3 : US Code - Section 824A-3: Cogeneration and small power production

Search 16 U.S.C. § 824a-3 : US Code - Section 824A-3: Cogeneration and small power production

(a) Cogeneration and small power production rules
Not later than 1 year after November 9, 1978, the Commission
shall prescribe, and from time to time thereafter revise, such
rules as it determines necessary to encourage cogeneration and
small power production, and to encourage geothermal small power
production facilities of not more than 80 megawatts capacity, which
rules require electric utilities to offer to -
(1) sell electric energy to qualifying cogeneration facilities
and qualifying small power production facilities (!1) and
(2) purchase electric energy from such facilities.
Such rules shall be prescribed, after consultation with
representatives of Federal and State regulatory agencies having
ratemaking authority for electric utilities, and after public
notice and a reasonable opportunity for interested persons
(including State and Federal agencies) to submit oral as well as
written data, views, and arguments. Such rules shall include
provisions respecting minimum reliability of qualifying
cogeneration facilities and qualifying small power production
facilities (including reliability of such facilities during
emergencies) and rules respecting reliability of electric energy
service to be available to such facilities from electric utilities
during emergencies. Such rules may not authorize a qualifying
cogeneration facility or qualifying small power production facility
to make any sale for purposes other than resale.
(b) Rates for purchases by electric utilities
The rules prescribed under subsection (a) of this section shall
insure that, in requiring any electric utility to offer to purchase
electric energy from any qualifying cogeneration facility or
qualifying small power production facility, the rates for such
purchase -
(1) shall be just and reasonable to the electric consumers of
the electric utility and in the public interest, and
(2) shall not discriminate against qualifying cogenerators or
qualifying small power producers.
No such rule prescribed under subsection (a) of this section shall
provide for a rate which exceeds the incremental cost to the
electric utility of alternative electric energy.
(c) Rates for sales by utilities
The rules prescribed under subsection (a) of this section shall
insure that, in requiring any electric utility to offer to sell
electric energy to any qualifying cogeneration facility or
qualifying small power production facility, the rates for such sale
-
(1) shall be just and reasonable and in the public interest,
and
(2) shall not discriminate against the qualifying cogenerators
or qualifying small power producers.
(d) "Incremental cost of alternative electric energy" defined
For purposes of this section, the term "incremental cost of
alternative electric energy" means, with respect to electric energy
purchased from a qualifying cogenerator or qualifying small power
producer, the cost to the electric utility of the electric energy
which, but for the purchase from such cogenerator or small power
producer, such utility would generate or purchase from another
source.
(e) Exemptions
(1) Not later than 1 year after November 9, 1978, and from time
to time thereafter, the Commission shall, after consultation with
representatives of State regulatory authorities, electric
utilities, owners of cogeneration facilities and owners of small
power production facilities, and after public notice and a
reasonable opportunity for interested persons (including State and
Federal agencies) to submit oral as well as written data, views,
and arguments, prescribe rules under which geothermal small power
production facilities of not more than 80 megawatts capacity,
qualifying cogeneration facilities, and qualifying small power
production facilities are exempted in whole or part from the
Federal Power Act [16 U.S.C. 791a et seq.], from the Public Utility
Holding Company Act,(!2) from State laws and regulations respecting
the rates, or respecting the financial or organizational
regulation, of electric utilities, or from any combination of the
foregoing, if the Commission determines such exemption is necessary
to encourage cogeneration and small power production.
(2) No qualifying small power production facility (other than a
qualifying small power production facility which is an eligible
solar, wind, waste, or geothermal facility as defined in section
3(17)(E) of the Federal Power Act [16 U.S.C. 796(17)(E)]) which has
a power production capacity which, together with any other
facilities located at the same site (as determined by the
Commission), exceeds 30 megawatts, or 80 megawatts for a qualifying
small power production facility using geothermal energy as the
primary energy source, may be exempted under rules under paragraph
(1) from any provision of law or regulation referred to in
paragraph (1), except that any qualifying small power production
facility which produces electric energy solely by the use of
biomass as a primary energy source, may be exempted by the
Commission under such rules from the Public Utility Holding Company
Act (!2) and from State laws and regulations referred to in such
paragraph (1).
(3) No qualifying small power production facility or qualifying
cogeneration facility may be exempted under this subsection from -
(A) any State law or regulation in effect in a State pursuant
to subsection (f) of this section,
(B) the provisions of section 210, 211, or 212 of the Federal
Power Act [16 U.S.C. 824i, 824j, or 824k] or the necessary
authorities for enforcement of any such provision under the
Federal Power Act [16 U.S.C. 791a et seq.], or
(C) any license or permit requirement under part I of the
Federal Power Act [16 U.S.C. 791a et seq.] any provision under
such Act related to such a license or permit requirement, or the
necessary authorities for enforcement of any such requirement.
(f) Implementation of rules for qualifying cogeneration and
qualifying small power production facilities
(1) Beginning on or before the date one year after any rule is
prescribed by the Commission under subsection (a) of this section
or revised under such subsection, each State regulatory authority
shall, after notice and opportunity for public hearing, implement
such rule (or revised rule) for each electric utility for which it
has ratemaking authority.
(2) Beginning on or before the date one year after any rule is
prescribed by the Commission under subsection (a) of this section
or revised under such subsection, each nonregulated electric
utility shall, after notice and opportunity for public hearing,
implement such rule (or revised rule).
(g) Judicial review and enforcement
(1) Judicial review may be obtained respecting any proceeding
conducted by a State regulatory authority or nonregulated electric
utility for purposes of implementing any requirement of a rule
under subsection (a) of this section in the same manner, and under
the same requirements, as judicial review may be obtained under
section 2633 of this title in the case of a proceeding to which
section 2633 of this title applies.
(2) Any person (including the Secretary) may bring an action
against any electric utility, qualifying small power producer, or
qualifying cogenerator to enforce any requirement established by a
State regulatory authority or nonregulated electric utility
pursuant to subsection (f) of this section. Any such action shall
be brought only in the manner, and under the requirements, as
provided under section 2633 of this title with respect to an action
to which section 2633 of this title applies.
(h) Commission enforcement
(1) For purposes of enforcement of any rule prescribed by the
Commission under subsection (a) of this section with respect to any
operations of an electric utility, a qualifying cogeneration
facility or a qualifying small power production facility which are
subject to the jurisdiction of the Commission under part II of the
Federal Power Act [16 U.S.C. 824 et seq.], such rule shall be
treated as a rule under the Federal Power Act [16 U.S.C. 791a et
seq.]. Nothing in subsection (g) of this section shall apply to so
much of the operations of an electric utility, a qualifying
cogeneration facility or a qualifying small power production
facility as are subject to the jurisdiction of the Commission under
part II of the Federal Power Act.
(2)(A) The Commission may enforce the requirements of subsection
(f) of this section against any State regulatory authority or
nonregulated electric utility. For purposes of any such
enforcement, the requirements of subsection (f)(1) of this section
shall be treated as a rule enforceable under the Federal Power Act
[16 U.S.C. 791a et seq.]. For purposes of any such action, a State
regulatory authority or nonregulated electric utility shall be
treated as a person within the meaning of the Federal Power Act. No
enforcement action may be brought by the Commission under this
section other than -
(i) an action against the State regulatory authority or
nonregulated electric utility for failure to comply with the
requirements of subsection (f) of this section (!3) or
(ii) an action under paragraph (1).
(B) Any electric utility, qualifying cogenerator, or qualifying
small power producer may petition the Commission to enforce the
requirements of subsection (f) of this section as provided in
subparagraph (A) of this paragraph. If the Commission does not
initiate an enforcement action under subparagraph (A) against a
State regulatory authority or nonregulated electric utility within
60 days following the date on which a petition is filed under this
subparagraph with respect to such authority, the petitioner may
bring an action in the appropriate United States district court to
require such State regulatory authority or nonregulated electric
utility to comply with such requirements, and such court may issue
such injunctive or other relief as may be appropriate. The
Commission may intervene as a matter of right in any such action.
(i) Federal contracts
No contract between a Federal agency and any electric utility for
the sale of electric energy by such Federal agency for resale which
is entered into after November 9, 1978, may contain any provision
which will have the effect of preventing the implementation of any
rule under this section with respect to such utility. Any provision
in any such contract which has such effect shall be null and void.
(j) New dams and diversions
Except for a hydroelectric project located at a Government dam
(as defined in section 3(10) of the Federal Power Act [16 U.S.C.
796(10)]) at which non-Federal hydroelectric development is
permissible, this section shall not apply to any hydroelectric
project which impounds or diverts the water of a natural
watercourse by means of a new dam or diversion unless the project
meets each of the following requirements:
(1) No substantial adverse effects
At the time of issuance of the license or exemption for the
project, the Commission finds that the project will not have
substantial adverse effects on the environment, including
recreation and water quality. Such finding shall be made by the
Commission after taking into consideration terms and conditions
imposed under either paragraph (3) of this subsection or section
10 of the Federal Power Act [16 U.S.C. 803] (whichever is
appropriate as required by that Act [16 U.S.C. 791a et seq.] or
the Electric Consumers Protection Act of 1986) and compliance
with other environmental requirements applicable to the project.
(2) Protected rivers
At the time the application for a license or exemption for the
project is accepted by the Commission (in accordance with the
Commission's regulations and procedures in effect on January 1,
1986, including those relating to environmental consultation),
such project is not located on either of the following:
(A) Any segment of a natural watercourse which is included in
(or designated for potential inclusion in) a State or national
wild and scenic river system.
(B) Any segment of a natural watercourse which the State has
determined, in accordance with applicable State law, to possess
unique natural, recreational, cultural, or scenic attributes
which would be adversely affected by hydroelectric development.
(3) Fish and wildlife terms and conditions
The project meets the terms and conditions set by fish and
wildlife agencies under the same procedures as provided for under
section 30(c) of the Federal Power Act [16 U.S.C. 823a(c)].
(k) "New dam or diversion" defined
For purposes of this section, the term "new dam or diversion"
means a dam or diversion which requires, for purposes of installing
any hydroelectric power project, any construction, or enlargement
of any impoundment or diversion structure (other than repairs or
reconstruction or the addition of flashboards or similar adjustable
devices).
(l) Definitions
For purposes of this section, the terms "small power production
facility", "qualifying small power production facility",
"qualifying small power producer", "primary energy source",
"cogeneration facility", "qualifying cogeneration facility", and
"qualifying cogenerator" have the respective meanings provided for
such terms under section 3(17) and (18) of the Federal Power Act
[16 U.S.C. 796(17), (18)].
(m) Termination of mandatory purchase and sale requirements
(1) Obligation to purchase
After August 8, 2005, no electric utility shall be required to
enter into a new contract or obligation to purchase electric
energy from a qualifying cogeneration facility or a qualifying
small power production facility under this section if the
Commission finds that the qualifying cogeneration facility or
qualifying small power production facility has nondiscriminatory
access to -
(A)(i) independently administered, auction-based day ahead
and real time wholesale markets for the sale of electric
energy; and (ii) wholesale markets for long-term sales of
capacity and electric energy; or
(B)(i) transmission and interconnection services that are
provided by a Commission-approved regional transmission entity
and administered pursuant to an open access transmission tariff
that affords nondiscriminatory treatment to all customers; and
(ii) competitive wholesale markets that provide a meaningful
opportunity to sell capacity, including long-term and short-
term sales, and electric energy, including long-term, short-
term and real-time sales, to buyers other than the utility to
which the qualifying facility is interconnected. In determining
whether a meaningful opportunity to sell exists, the Commission
shall consider, among other factors, evidence of transactions
within the relevant market; or
(C) wholesale markets for the sale of capacity and electric
energy that are, at a minimum, of comparable competitive
quality as markets described in subparagraphs (A) and (B).
(2) Revised purchase and sale obligation for new facilities
(A) After August 8, 2005, no electric utility shall be required
pursuant to this section to enter into a new contract or
obligation to purchase from or sell electric energy to a facility
that is not an existing qualifying cogeneration facility unless
the facility meets the criteria for qualifying cogeneration
facilities established by the Commission pursuant to the
rulemaking required by subsection (n) of this section.
(B) For the purposes of this paragraph, the term "existing
qualifying cogeneration facility" means a facility that -
(i) was a qualifying cogeneration facility on August 8, 2005;
or
(ii) had filed with the Commission a notice of self-
certification, self recertification or an application for
Commission certification under 18 CFR 292.207 prior to the date
on which the Commission issues the final rule required by
subsection (n) of this section.
(3) Commission review
Any electric utility may file an application with the
Commission for relief from the mandatory purchase obligation
pursuant to this subsection on a service territory-wide basis.
Such application shall set forth the factual basis upon which
relief is requested and describe why the conditions set forth in
subparagraph (A), (B), or (C) of paragraph (1) of this subsection
have been met. After notice, including sufficient notice to
potentially affected qualifying cogeneration facilities and
qualifying small power production facilities, and an opportunity
for comment, the Commission shall make a final determination
within 90 days of such application regarding whether the
conditions set forth in subparagraph (A), (B), or (C) of
paragraph (1) have been met.
(4) Reinstatement of obligation to purchase
At any time after the Commission makes a finding under
paragraph (3) relieving an electric utility of its obligation to
purchase electric energy, a qualifying cogeneration facility, a
qualifying small power production facility, a State agency, or
any other affected person may apply to the Commission for an
order reinstating the electric utility's obligation to purchase
electric energy under this section. Such application shall set
forth the factual basis upon which the application is based and
describe why the conditions set forth in subparagraph (A), (B),
or (C) of paragraph (1) of this subsection are no longer met.
After notice, including sufficient notice to potentially affected
utilities, and opportunity for comment, the Commission shall
issue an order within 90 days of such application reinstating the
electric utility's obligation to purchase electric energy under
this section if the Commission finds that the conditions set
forth in subparagraphs (A), (B) or (C) of paragraph (1) which
relieved the obligation to purchase, are no longer met.
(5) Obligation to sell
After August 8, 2005, no electric utility shall be required to
enter into a new contract or obligation to sell electric energy
to a qualifying cogeneration facility or a qualifying small power
production facility under this section if the Commission finds
that -
(A) competing retail electric suppliers are willing and able
to sell and deliver electric energy to the qualifying
cogeneration facility or qualifying small power production
facility; and
(B) the electric utility is not required by State law to sell
electric energy in its service territory.
(6) No effect on existing rights and remedies
Nothing in this subsection affects the rights or remedies of
any party under any contract or obligation, in effect or pending
approval before the appropriate State regulatory authority or non-
regulated electric utility on August 8, 2005, to purchase
electric energy or capacity from or to sell electric energy or
capacity to a qualifying cogeneration facility or qualifying
small power production facility under this Act (including the
right to recover costs of purchasing electric energy or
capacity).
(7) Recovery of costs
(A) The Commission shall issue and enforce such regulations as
are necessary to ensure that an electric utility that purchases
electric energy or capacity from a qualifying cogeneration
facility or qualifying small power production facility in
accordance with any legally enforceable obligation entered into
or imposed under this section recovers all prudently incurred
costs associated with the purchase.
(B) A regulation under subparagraph (A) shall be enforceable in
accordance with the provisions of law applicable to enforcement
of regulations under the Federal Power Act (16 U.S.C. 791a et
seq.).
(n) Rulemaking for new qualifying facilities
(1)(A) Not later than 180 days after August 8, 2005, the
Commission shall issue a rule revising the criteria in 18 CFR
292.205 for new qualifying cogeneration facilities seeking to sell
electric energy pursuant to this section to ensure -
(i) that the thermal energy output of a new qualifying
cogeneration facility is used in a productive and beneficial
manner;
(ii) the electrical, thermal, and chemical output of the
cogeneration facility is used fundamentally for industrial,
commercial, or institutional purposes and is not intended
fundamentally for sale to an electric utility, taking into
account technological, efficiency, economic, and variable thermal
energy requirements, as well as State laws applicable to sales of
electric energy from a qualifying facility to its host facility;
and
(iii) continuing progress in the development of efficient
electric energy generating technology.
(B) The rule issued pursuant to paragraph (1)(A) of this
subsection shall be applicable only to facilities that seek to sell
electric energy pursuant to this section. For all other purposes,
except as specifically provided in subsection (m)(2)(A) of this
section, qualifying facility status shall be determined in
accordance with the rules and regulations of this Act.
(2) Notwithstanding rule revisions under paragraph (1), the
Commission's criteria for qualifying cogeneration facilities in
effect prior to the date on which the Commission issues the final
rule required by paragraph (1) shall continue to apply to any
cogeneration facility that -
(A) was a qualifying cogeneration facility on August 8, 2005,
or
(B) had filed with the Commission a notice of self-
certification, self-recertification or an application for
Commission certification under 18 CFR 292.207 prior to the date
on which the Commission issues the final rule required by
paragraph (1).