DAR File No. 43329

Public Service Commission, Administration

Rule R746-450

Procedural and Informational Requirements for Solar Resource Solicitations and Acquisitions

Notice of Proposed Rule

(New Rule)

DAR File No.: 43329
Filed: 10/29/2018 01:17:27 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The Public Service Commission (PSC) has created Rule R746-450 to comply with Section 54-17-807, Solar Photovoltaic or Thermal Solar Energy Facilities, which was enacted May 8, 2018.

Summary of the rule or change:

This rule applies to a qualified utility's application for PSC approval of a solar solicitation if the solicitation falls under Section 54-17-807 and the definitions established by this rule. For those solicitations, this rule establishes the application requirements and the PSC process for solar solicitation, resource acquisition, and disposition of a solar resource by a qualified facility.

Statutory or constitutional authorization for this rule:

• Section 54-17-807

Anticipated cost or savings to:

the state budget:

There is no impact to the state budget because this new rule establishes the procedural and information requirements for solar resource solicitations and acquisitions by a qualified utility. The underlying responsibilities on state agencies exist in statute, and this new rule only clarifies those statutory requirements.

local governments:

There will be no impact to a local government unless that local government, as a customer of a qualified utility, chooses to request a specific customer solicitation for a solar resource under this rule.

small businesses:

There will be no impact to a small business unless: 1) that small business, as a customer of a qualified utility, chooses to request a specific customer solicitation for a solar resource under this rule; or 2) the small business chooses to submit a bid in a solicitation conducted pursuant to this rule.

persons other than small businesses, businesses, or local governmental entities:

There will be no impact to other persons unless: 1) that person, as a customer of a qualified utility, chooses to request a specific customer solicitation for a solar resource under this rule; or 2) the person chooses to submit a bid in a solicitation conducted pursuant to this rule.

Compliance costs for affected persons:

There is no compliance cost for affected persons unless a person, as a customer of a qualified utility, chooses to request a specific customer solicitation for a solar resource under this rule.

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule establishes procedural, application, and informational requirements for certain solar resource solicitations conducted by a qualified utility, but the underlying legal requirements already exist in statute. These necessary procedures implement the statute, but do not create any fiscal impact on any business other than that already established by statute. Additionally, while a business may choose to avail itself of this rule and the underlying statute, there is no mandatory obligation to do so.

Thad LeVar, Commission Chair

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Public Service Commission
Administration
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Sheri Bintz at the above address, by phone at 801-530-6714, by FAX at 801-530-6796, or by Internet E-mail at sbintz@utah.gov
• Melanie Reif at the above address, by phone at 801-530-6709, by FAX at 801-530-6796, or by Internet E-mail at mreif@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/17/2018

This rule may become effective on:

12/24/2018

Authorized by:

Melanie Reif, Legal Counsel

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2019	FY 2020	FY 2021
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described above. Inestimable impacts for Non-Small Businesses are described below.

 

Appendix 2: Regulatory Impact to Non-Small Businesses

This newly enacted rule arises from legislation addressing a qualified utilities solar resource solicitations. A qualified utility is defined as an electric corporation that serves more than 200,000 retail customers in the state (i.e., PacifiCorp, dba Rocky Mountain Power). This rule identifies actions that a qualified utility must take to receive approval for solar resource solicitations. It is impossible to predict the extent to which qualified utilities will be subject to this new rule.

 

PSC Chair Thad LeVar has reviewed and approved this fiscal analysis.

 

 

R746. Public Service Commission, Administration.

R746-450. Procedural and Informational Requirements for Solar Resource Solicitations and Acquisitions.

R746-450-1. Definitions.

(1) "Acquire," "Acquiring," or "Acquisition" means to purchase, construct, or purchase the output from a photovoltaic or thermal solar energy resource under an agreement that includes a purchase option.

(2) "All Customers" means customers of a Qualified Utility that are not contracting with that utility under Utah Code Sections 54-17-803 or 54-17-806.

(3) "All Customers Solicitation" means a Solar Solicitation pursuant to 54-17-807(3)(c)that will solicit Solar Resources with a rated generating capacity of less than or equal to 300 megawatts that will be used in whole, or in part, to supply All Customers.

(4) "All Customers Large Solicitation" means a Solar Solicitation pursuant to 54-17-807(3)(d) that will solicit Solar Resources with a rated generating capacity of more than 300 megawatts and that will be used in whole, or in part, to supply All Customers.

(5) "Qualified Utility" is defined under Utah Code Section 54-17-801(2).

(6) "Solar Solicitation" means a solicitation that includes a Solar Resource pursuant to Utah Code Section 54-17-807.

(7) "Solar Resource" means a solar photovoltaic or thermal solar energy facility.

(8) "Specific Customer Solicitation" means a Solar Solicitation pursuant to 54-17-807(3)(a) and (b) for a customer of a Qualified Utility that meets the requirements of either Utah Code Section 54-17-803 or Utah Code Section 54-17-806.

 

R746-450-2. Applicability.

(1) This rule applies to qualified utility applications for Commission approval of:

(a) a solar solicitation that may result in the qualified utility's acquisition of a solar resource using rate recovery based on a competitive market price; and

(b) a qualified utility's acquisition of a solar resource resulting from a solar solicitation approved under these rules, whether the resource will be solely or jointly owned, only if the qualified utility seeks rate recovery based on a competitive market price.

(2) This rule does not apply to a qualified utility's acquisition of solar resources located on the customer's side of the meter that have a rated generating capacity of less than two megawatts.

(3) Except as otherwise specified in this rule, the requirements of Parts 1 through 5 of the Energy Resource Procurement Act (Utah Code Section 54-17-101 through Section 54-17-501) and Commission rules R746-420-1 through R746-420-6; R746-430-1 through R746-430-4; and R746-440-1 through R746-440-3, do not apply to applications for approval under this rule.

 

R746-450-3. Requests for Solar Solicitation Approvals.

(1) A qualified utility that seeks to acquire a solar resource using rate recovery based on a competitive market price shall file an application with the Commission for approval of a solar solicitation that includes the following:

(a) a description of the solicitation process the qualified utility proposes to use, including an explanation of the customer(s) on whose behalf the solicitation is proposed and the manner in which the solicitation will be published;

(b) a copy of the complete proposed solar solicitation with any appendices, attachments and draft pro forma contracts;

(c) information sufficient to demonstrate that the filing complies with the requirements of Utah Code Section 54-17-807 and Commission rules;

(d) descriptions of the criteria and the methods to be used to evaluate bids, including the weighting and ranking factors to be used to evaluate bids, and explanation of the extent to which grid services frequency regulation, spinning reserves, and/or ramp control that the resource is capable of providing in addition to energy and/or capacity will be considered or evaluated;

(e) other than for a solar solicitation administered by a customer, information directing interested parties to all questions and answers regarding the solar solicitation and solicitation process posted on an appropriate website;

(f) the qualified utility's proposed cost accounting for management of the solar solicitation;

(g) if the solar solicitation is intended to solicit resources for more than one customer in a specific customer solicitation, or a specific customer solicitation will be combined with an all customers solicitation or an all customers large solicitation, the following shall also apply:

(i) the solicitation will include a proposal for how the resources or the output from resources will be apportioned to the various customers; and

(ii) in addition to combined pricing for a portion, or all of, the requested quantity, the solicitation must allow bidders to place separate bids for customers that meet the requirements of Utah Code Section 54-17-803, customers that meet the requirements of Utah Code Section 54-17-806, and all customers, each to the extent included in the solicitation.

(h) For a specific customer solicitation or all customers solicitation that a qualified utility will either administer, or participate in bid evaluation or selection for, a description of the qualified utility's proposal for:

(i) how the qualified utility's personnel involved in evaluating bids and the qualified utility's personnel involved in preparing bids to the solicitation from the qualified utility will be prevented from sharing information in a manner that may lead to unfair advantage or the perception of unfair advantage in the selection of a solar resource; and

(ii) how the qualified utility will avoid its involvement in bid evaluation or selection from being affected by bias.

(i) Any other information the Commission may require.

(2) Solar Solicitation Approval Process.

(a) For a specific customer solicitation that is not combined with an all customers solicitation or an all customers large solicitation:

(i) the qualified utility shall also include in its application information sufficient for the Commission to make the following determinations:

(A) that the solar solicitation and bid evaluation will create a level playing field that will allow fair competition between the qualified utility and other bidders;

(B) that, excluding applicable requirements of the qualified utility's federally regulated transmission function, the interconnection and transmission related requirements and conditions will be equally applicable to the qualified utility and other bidders;

(C) that projects proposing to interconnect or deliver to various locations on the qualified utility's transmission system will have a fair opportunity to bid and have the impacts of the interconnection or delivery locations objectively considered in the selection process, provided that solicitation parameters requested by specific customers may limit interconnection or delivery locations; and

(D) that the solar solicitation is in the public interest.

(ii) the Commission shall provide public notice of the application. Interested parties may file comments on the application within 30 days of the notice. Interested parties shall have 15 days to respond to any comments, and, unless the Commission determines that another process or additional time is warranted and is in the public interest, the Commission will issue an order within 60 days of the application.

(b) For an all customers solicitation, including an all customers solicitation that is combined with a specific customer solicitation:

(i) the qualified utility shall also include in its application information sufficient for the Commission to make the following determinations:

(A) that the solar solicitation and bid evaluation will create a level playing field that will allow fair competition between the qualified utility and other bidders;

(B) that, excluding applicable requirements of the qualified utility's federally regulated transmission function, interconnection and transmission related requirements and conditions will be equally applicable to the qualified utility and other bidders;

(C) that projects proposing to interconnect or deliver to various locations on the qualified utility's transmission system will have a fair opportunity to bid and have the impacts of the interconnection or delivery locations objectively considered in the selection process, provided that solicitation parameters requested by specific customers may limit interconnection or delivery locations; and

(D) that the solar solicitation is in the public interest.

(ii) the Commission will provide public notice of the application. Interested parties may file comments on the application within 30 days of the notice. Interested parties shall have 15 days to respond to any comments. The Commission will hold a scheduling conference to set the time for public hearing. Unless the Commission determines that another process or additional time is warranted and is in the public interest, the Commission will set a hearing date that is within 75 days of the application.

(c) For an all customers large solicitation, including an all customers large solicitation that is combined with an all customers solicitation or a specific customer solicitation, or both:

(i) Parts 1 through 5 of the Energy Resource Procurement Act are applicable.

(ii) the qualified utility shall include all of the information required under subsection 3(1) of this rule in its application under R746-420.

(iii) in its application for Commission approval under R746-420 for an all customers large solicitation, the qualified utility shall also include in such application information sufficient for the Commission to make the following additional determinations:

(A) that the solar solicitation and bid evaluation will create a level playing field that will allow fair competition between the qualified utility and other bidders;

(B) that, excluding applicable requirements of the qualified utility's federally regulated transmission function, interconnection and transmission related requirements and conditions will be equally applicable to the qualified utility and other bidders;

(C) that projects proposing to interconnect or deliver to various locations on the qualified utility's transmission system will have a fair opportunity to bid and have the impacts of the interconnection or delivery locations objectively considered in the selection process, provided that solicitation parameters requested by specific customers may limit interconnection or delivery locations; and

(D) that the solar solicitation is in the public interest.

(iv) the Commission will provide public notice of the application. The process for approval of the application will be governed by the Energy Resource Procurement Act and R746-420.

(d) If no solar resource is selected at the conclusion of a solar solicitation approved by the Commission:

(i) the qualified utility shall file a report with the Commission within 30 days that includes the following:

(A) a summary of the results of the solar solicitation;

(B) the reasons for not acquiring the lowest cost solar resource bid into the solar solicitation; and

(C) any other information the Commission may require.

(ii) the Commission will provide public notice of the report. Interested parties may file comments regarding the qualified utility's report or the solar solicitation that resulted in such report within 30 days of the notice. Interested parties shall have 15 days to respond to any comments. After considering the report and information filed by the qualified utility and the comments received, the Commission may determine whether further comments, proceedings, or actions may be appropriate and in the public interest.

 

R746-450-4. Solar Resource Acquisition Approval Process.

(1) Before acquiring a solar resource selected through a specific customer solicitation approved under this rule:

(a) a qualified utility shall file an application for approval of the acquisition with the Commission that includes information sufficient for the Commission to make the following determinations:

(i) that the solicitation, bid evaluation and resource selection processes complied with these rules, other Commission rules, the Utah Code, and the Commission's order approving the solicitation process; and

(ii) that the acquisition of the solar resource is just and reasonable, and in the public interest.

(b) the Commission will provide public notice of the application and interested parties may file comments on the application within 30 days of the notice. Interested parties shall have 15 days to respond to any comments. The Commission will hold a scheduling conference to set the time for public hearing. Unless the Commission determines that another process or additional time is warranted and is in the public interest, the Commission will set a hearing date that is within 75 days of the application.

(2) Combining applications for Commission approval:

(a) A qualified utility may combine its application for Commission approval of a specific customer solicitation with its application for Commission approval of the acquisition of a solar resource selected through that specific customer solicitation if the following conditions are met:

(i) all information required under R746-450-3(1) is included in the combined solicitation and acquisition approval application;

(ii) the qualified utility did not prepare or administer the specific customer solicitation, and was not involved in the evaluation or selection of the solar resource selected through that specific customer solicitation;

(iii) the specific customer solicitation is not combined with any other form of solicitation under these rules; and

(iv) the qualified utility's application for combined approval meets the requirements of both R746-450-3(2)(a) and R746-450-4(1).

(b) The Commission shall provide public notice of the application and interested parties may file comments on the application within 30 days of the notice. Interested parties shall have 15 days to respond to any comments. The Commission will hold a scheduling conference to set the time for public hearing. Unless the Commission determines that another process or additional time is warranted and is in the public interest, the Commission will set a hearing date that is within 75 days of the application.

(3) Approval of an acquisition under an all customers large solicitation is also subject to Part 3 of the Energy Resource Procurement Act and must be approved in accordance with that Part 3 and R746-430 and these rules. An acquisition under an all customers solicitation is subject to Part 4 of the Energy Resource Procurement Act and must be approved in accordance with that Part 4 and R746-440 and these rules.

(a) In an application for approval of an acquisition resulting from an all customers solicitation or an all customers large solicitation, in addition to the requirements of Part 3 and R746-430 or Part 4 and R746-440, the qualified utility shall include in such application information sufficient for the Commission to make the following determinations:

(i) that the solicitation, bid evaluation and resource selection processes complied with these rules, other Commission rules, the Utah Code and the Commission's order approving the solicitation process;

(ii) that the acquisition of the solar resource is just and reasonable, and in the public interest;

(iii) that the accounting treatment of the acquired solar resource proposed by the qualified utility in the application will be properly reflected in the qualified utility's accounting system, reports, energy balancing accounts, and for interjurisdictional allocations; and

(iv) that the qualified utility's acquisition of the solar resource at a competitive market price is the lowest cost ownership option, which will be based on:

(A) the solicitation criteria and the bid results; and

(B) information to be included in the application by the qualified utility that compares customer costs and benefits for acquisition of the solar resource using the competitive market price to the costs and benefits of the solar resource if it were treated as a traditional regulated resource included in rate base.

(b) The Commission will provide public notice of the application. The process for approval of the application will be governed by applicable provisions of the Energy Resource Procurement Act and Commission rules.

(4) If the Commission issues an order granting acquisition approval under this section R746-450-4, including entering into a power purchase agreement containing a purchase option by the qualified utility, using rate recovery based on a competitive market price:

(a) the prices approved by the Commission shall constitute competitive market prices; and

(b) assets owned by the qualified utility and used to provide service as approved under this section are not public utility property.

(5) Within six months following the date of a Commission order approving the acquisition of a solar resource pursuant to an all customers solicitation or an all customers large solicitation, or for such longer period as the Commission determines to be in the public interest a qualified utility may file an application with the Commission seeking approval to acquire another solar resource that is similar to the one for which a competitive market price was established without requiring a new solar solicitation approval process. For the purposes of this section, whether a solar resource is "similar" shall be determined based on the overall similarity between the solar resources after evaluating the following factors: resource size, capacity factor, technology type, resource location, contract term length, generation profile, reliability capabilities, transmission, and such other factors the Commission deems appropriate.

(a) The qualified utility's application shall also provide information sufficient to demonstrate that:

(i) there is a need to acquire the solar resource;

(ii) the competitive market price remains reasonable; and

(iii) the acquisition is in the public interest.

(b) The Commission shall provide public notice of the application. Interested parties may file comments on the application within 30 days of the notice. Interested parties shall have 15 days to respond to any comments. The Commission will hold a scheduling conference to set the time for public hearing. Unless the Commission determines that another process or additional time is warranted and is in the public interest, the Commission will set a hearing date that is within 75 days of the application.

 

R746-450-5. Disposition of a Solar Resource.

(1) No later than 180 days before the end of the Commission approved term for a solar resource, the qualified utility shall file a request for determination that its intended retention or disposition complies with Utah Code Section 54-17-807(10). The filing shall demonstrate that the qualified utility's proposed retention or disposition will result in the qualified utility retaining the benefits and assuming the costs and risks of ownership of the solar resource. The Commission will provide public notice of such filing, and before approving the proposed retention or disposition of the solar resource will provide an opportunity for public input and hold a public hearing.

 

KEY: procedural and informational requirements, solar resource solicitations, solar resource acquisitions

Date of Enactment or Last Substantive Amendment: 2018

Authorizing, and Implemented or Interpreted Law: 54-17-807