Qualifying Facilities and PURPA
The Public Utilities Policies Act of 1978 (PURPA) created an obligation for electric utilities to purchase energy and capacity from qualifying generation projects at the utility’s avoided cost rate. PURPA is implemented through a set of rules established by the Federal Energy Regulatory Commission (FERC) and the Arizona Corporation Commission (ACC). Qualifying Facilities (QFs) must meet certain criteria as specified in the FERC rules.
The process for a Qualifying Facility (QF) under the Public Utility Regulatory Policies Act (“PURPA”) to receive a Power Purchase Agreement (PPA) from UniSource Energy Services (UNSE) is multi-step and iterative.
This section of our website is designed to guide applicants step-by-step through this process and help them understand the requirements for obtaining a PURPA based PPA.
To begin the QF process the Applicant must:
- Submit an Interconnection Request (IR) to the UNSE interconnection team and provide the UNSE interconnection queue number assigned to the project.
Once the IR is submitted , the applicant shall fill out the UNSE PURPA Preliminary Request For Information form (RFI) and provide documented records of the IR application.
Upon confirmation that all submitted information is correct, UNSE will provide a QF Application Package. The QF Applicant must complete the Application, which consists of the following documents and information:
- QF Application Submittal Workbook
- Non-disclosure Agreement
- Jurisdictional Filings
- Site Description and Control
- Project* Attributes Workbook
*UNSE will only consider QF projects that have a COD within four years (48 months) of the initial QF Application submittal date.
Once a complete QF Application is received, UNSE will review the application within 45 business days. After the review, UNSE will provide the QF applicant with a Commitment Notice to be signed within 10 Business Days and a non-refundable application fee of $5,000 will be collected.
UNSE will begin calculating the avoided cost rate for the applicant QF. Rates for energy and capacity purchased from a QF shall be priced at the long-run avoided cost based on the Company’s avoided cost methodology and the applicable generation technology. Avoided costs will be derived from the most recent May or November datasets 1. UNSE will provide the avoided cost rate to the applicant QF within 45 business days of the date that the Commitment Notice is signed.
UNSE will provide a PPA Term Sheet at the time that avoided costs are provided. Upon receiving the PPA, a negotiation period of sixty (60) business days will begin. UNSE expects to execute the PPA within the negotiation period. Within this period, the applicant QF can review the terms and conditions of the PPA and notify the Company it wants to proceed with negotiations. If the applicant fails to notify the Company of its intent to proceed with negotiations, the project will be removed from the pricing queue. Upon successful negotiation of a PPA, the authorized applicant must sign the agreement and forward to UNSE. UNSE will countersign and submit the contract to the ACC for final approval.
Inquiries about QF purchases must be directed to PURPA@tep.com.
1 Prices will be renewed Biannually in May and November as needed. If a QF Applicant has failed to respond or declined an avoided cost rate they will be unable to restart the QF process until there has been a subsequent price refresh.