Renewable & Alternative Power - Combined Heat and Power (CHP)

 

What is the CHP Settlement?

The “Qualifying Facility and Combined Heat and Power Program Settlement Agreement” (Settlement Agreement or CHP Settlement) resolves numerous outstanding Qualifying Facility (QF) disputes and provides for an orderly transition from the existing QF program to a new QF/Combined Heat and Power (CHP) program for QFs greater than 20 MWs. Facilities between 5 and 20 MWs can choose to participate in this new program or the traditional Public Utility Regulatory Policies Act of 1978 (PURPA) procurement program. This new program is designed to preserve existing resource diversity, fuel efficiency, potential greenhouse gas (GHG) emissions reductions, and other benefits and contributions of CHP. The Settlement Agreement is also designed to promote new cost-effective, lower GHG-emitting CHP facilities and encourage the repowering, operational changes through utility-pre-scheduling, or retirement of existing, higher GHG-emitting CHP facilities.

When is the Settlement Agreement effective?

The Settlement Agreement became effective on November 23, 2011 (Settlement Effective Date).

How does the CHP Settlement affect me?

New and existing QFs should consider the following options offered as part of the CHP Program:

• Legacy Amendment: Existing QFs under unexpired legacy QF power purchase agreements (PPAs) have the option of amending the energy payment terms of their QF PPAs by selecting one of several payment options under the Settlement Agreement and executing the Legacy Amendment of the Settlement Agreement by May 21, 2012 (i.e., within 180 days of the Settlement Effective Date). Please note that QFs under existing PPAs who take no action will nevertheless be subject to the revised SRAC.
• Transition PPA: Existing CHP facilities whose existing QF PPAs or extensions thereof is scheduled to expire prior to 2015 have the option to continue existing deliveries, after the expiration of their existing QF PPAs, until July 1, 2015, by executing the Transition PPA of the Settlement Agreement by March 22, 2012 (i.e., within 120 days of the Settlement Effective Date). Non-CHP QFs (i.e., renewable QFs) are not eligible for the Transition PPA, but are eligible for the new <20 MW PURPA PPA if the nameplate ratings of the facilities do not exceed 20 MW. Larger renewable QFs are eligible to participate in SCE’s Renewable Requests for Proposals, and are strongly encouraged to do so.
• <20 MW PURPA PPA: QFs of 20 MW or less, including small power producers and renewable QFs, have the option to enter into standard offer contracts to make firm or as-available sales to the IOUs.
• Optional As-Available PPA: Gas-fired CHP facilities with nameplates greater than 20 MW, but annual average deliveries less than 131,400 MWh, have the option to enter into standard offer PPAs for as-available deliveries.
• CHP RFO: New and existing CHPs larger than five (5) MW may participate in Request for Offers (RFOs) issued by SCE. SCE’s CHP-only RFO will be launched by February 21, 2012 (i.e., within 90 days of the Settlement Effective Date).

If you would like to complete any one of these agreements, please fill out the relevant application in the “CPUC Decision and Related Documents” section below and return to chp@sce.com.

Important Interconnection Information

Generators must have an interconnection agreement to operate connected to the electric system. For existing generators that will transition from an existing PPA to one of the new contracts outlined above, it will be necessary that you work with SCE’s Grid Interconnections department to address the need for a new and separate agreement for interconnection and distribution service to be executed between the QF and SCE. This is because, in most “legacy” QF PPAs, the functions of power purchase contract and interconnection agreement are combined in a single agreement, the PPA. This means that, when the PPA terminates, the QF’s right to be interconnected with the SCE system is also ended. This process of conversion to a new interconnection agreement may require technical review and administrative activities that could need substantial lead time and, potentially, cost, to complete, so it is advisable to start this process well in advance of the date on which you expect your Legacy QF PPA to terminate.

Please note that this interconnection conversion process only applies if your existing PPA is terminating. If this is not the case, then the interconnection rights provided by your PPA will remain in effect as long as your PPA remains in effect. In that case, it is still advisable that you initiate the request for a new interconnection, as discussed above, well in advance of your PPA termination date to minimize the chances of an interruption in your ability to deliver power to the SCE electric system.

New generators must request interconnection service and potentially distribution service with the electric system, to initiate the appropriate technical review and studies. Interconnection facilities and system upgrades which may be needed to interconnect the generator will also be identified in this process, and will provide the basis of the interconnection agreement. This study process and related construction may take months or years to complete, depending on project size and location, among other factors. Therefore, parties are encouraged to understand the impacts that interconnection and transmission may have on any potential project plans and contractual commitments.

CPUC Decision and Related Documents

Links to the CPUC Decision for the Settlement Agreement and its related documents are provided below:

• CPUC D.10-12-035
• CHP Program Settlement Agreement Term Sheet
• SCE Amendment to Legacy QF Contracts, Legacy Amendment Application
• Transition PPA, Transition PPA Application
• <20 MW PURPA PPA, <20 MW PURPA PPA Application
• Optional As-Available PPA, Optional As-Available PPA Application
• CHP RFO PPA

Settlement Agreement Information Session

Southern California Edison Company hosted a meeting on July 22, 2011 to discuss the Settlement Agreement. The meeting covered overall information on the Settlement Agreement, SCE's plans for the CHP Request for Offers, and Interconnection related issues.

View the recording of the presentation >>
Download the meeting presentation(PDF) >>

Frequently Asked Questions

Questions about the Settlement Agreement are available by clicking on the following link: FAQ.
Additional questions of a general nature will be posted on this website as appropriate.

Contact us

For More Information about CHP, send questions to chp@sce.com or contact Gerome Torribio at (626) 302-9669, Benny Wu at (626) 302-3230, or Dahlia Siegel at (626) 302-2515.

The information on this page relating to the CHP Settlement (including any presentations prepared by SCE and any imbedded links) is provided by SCE as a convenience to the public. This information may not completely or accurately describe or link to all relevant provisions of the CHP Settlement, and expressly does not constitute legal advice to or for any party. A party should consult with appropriate experts to determine the effect of the CHP Settlement on any specific transaction, agreement, relationship, or circumstance. The publication of the information on this page does not constitute an offer to buy or sell electricity. Every CHP purchase agreement between SCE and any party is subject to SCE management approval and the prior execution of definitive documents by both parties.

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