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

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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.

How Does The CHP Settlement Affect Me?

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

  • <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.

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.

Contact Us

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

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.