Vote Solar on Jan. 25 asked the Colorado Public Utilities Commission for rehearing, reargument or reconsideration of two elements of a Jan. 5 commission decision in a case involving small power projects.
First, Vote Solar seeks reconsideration of the commission’s decision to require qualifying facilities (QFs) that sell power to Public Service Co. of Colorado (PSCo) under the small QF tariff to relinquish the renewable energy credits (RECs) associated with the power to the company. Second, Vote Solar seeks reconsideration of the commission’s decision to approve PSCo’s proposed use of a 1-MW block of QFs to derive marginal energy costs.
In this case, PSCo proposed substantial changes to the standard rate at which it buys power from small QFs under Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA), and federal and Colorado implementing regulations. PSCo proposed to change the way it derives small QF payment rates, including implementation of technology-specific rates, and to set new conditions on the power it buys from small QFs under these rates.
In its decision, the commission modified the company’s proposal in several important ways. For example, the commission required PSCo to use a single combustion turbine (CT), instead of PSCo’ proposed two-CT average, to determine the capacity payment component of the rate; directed PSCo to add a step in its methodology to consider avoided transmission and distribution costs; and rejected PSCo’s initially-proposed model, which used historic data inputs, to develop forward-looking avoided energy costs. While these modifications improve PSCo’s methodology, the commission’s decision is flawed in two ways that merit reconsideration, Vote Solar said.
- First, the commission ruled that small QFs must transfer to PSCo the RECs associated with the QF power the company purchases under the tariff. The approved tariff condition fails to provide small QFs with any compensation for the RECs that they must surrender to PSCo, Vote Solar said. Reconsideration of the REC ruling is warranted because the tariff condition has no basis in Colorado or federal law, and would require small QFs to transfer their RECs to PSCo without receiving any compensation for them. In the alternative, if the commission prefers that small QFs transfer their RECs to PSCo with the purchase of power under the small QF tariff, the commission should direct PSCo to compensate the small QFs for the RECs.
- Second, the commission approved PSCo’s proposed use of a 1-MW block to derive marginal energy costs and rejected Vote Solar’s alternative approach using a 100-MW block of small QFs. In so doing, the commission affirmed the administrative law judge’s conclusion that the use of a 100-MW block would require a finding that the number of small QFs required to reach such a block will take (or is currently taking) service under the tariff. Reconsideration of the 1-MW block ruling is warranted because this approach to deriving marginal energy costs does not adequately account for the aggregate value of small QF energy on the company’s system, said Vote Solar. The result is energy payment rates that fail to reflect full avoided costs, as required by PURPA. Vote Solar requests that the commission reject PSCo’s 1-MW approach to deriving marginal energy costs and adopt Vote Solar’s aggregate approach. Alternatively, even if the Commission does not adopt Vote Solar’s approach, it should reverse its conclusion (as adopted from the ALJ’s recommended decision) that the use of a block of QF energy requires a finding that the number of small QFs totaling that block will take service under the tariff.