170 IAC 4-4.1-8 Rates for energy purchase

Sec. 8. (a) The rate to be paid by a generating electric utility for purchase of energy from a qualifying facility shall be an average of marginal running costs of the generating electric utility adjusted for line losses in accordance with: Where: Pj = Rate for purchase of energy in the jth rating period. λij = Expected current fuel and associated variable operating and maintenance costs for the most expensive unit or source on line in the ith hour of the jth rating period as derived from recent historical data adjusted to the present or from appropriate generation simulation programs. l = Line losses, expressed as a percentage, for the previous year. nj = Number of hours in jth rating period. (b) The rate to be paid by a non-generating electric utility for purchase of energy from a qualifying facility shall be a weighted average of the rate or rates a non-generating electric utility pays to its suppliers, adjusted by the non-generating utility's line losses, in accordance with: Where: P = Rate for purchase of energy. n = Number of suppliers. ci = Cost per kilowatt-hour to be charged by ith supplier. qi = Quantity to be purchased from ith supplier. l = Line losses, expressed as a percentage, for the previous year. (c) Adjustments. For intended purchases of 72,000 kilowatt-hours or more per month from a qualifying facility, the electric utility and the qualifying facility may agree to increase or decrease the rates determined by subsections (a) and (b) in recognition of the following factors: (1) the extent to which scheduled outages of the qualifying facility can be usefully coordinated with scheduled outages of the electric utility's generation facilities; (2) the relationship of the availability of energy from the qualifying facility to the ability of the electric utility to avoid costs, particularly as is evidenced by the electric utility's ability to dispatch the qualifying facility; (3) the usefulness of energy from the qualifying facility during system emergencies, including the ability of the qualifying facility to separate its load from its generation. (d) An electric utility and a qualifying facility may negotiate a rate for energy which differs from the result of subsections (a) and (b).