Qualifying Facilities and PURPA

The Public Utilities Policies Act of 1978 (PURPA) created an obligation for electric utilities to offer to purchase power from, and interconnect with, qualifying generation projects. PURPA is implemented through a set of rules established by the Federal Energy Regulatory Commission (FERC) and each state with jurisdiction over Pacific Power. Qualifying Facilities (QFs) must meet certain criteria as specified in the FERC rules.

Avoided Cost (the cost a utility avoids as a result of the QF) forms the basis for determining QF purchase pricing.

The process for a Qualifying Facility (QF) under the Public Utility Regulatory Policies Act (“PURPA”) to receive a Power Purchase Agreement (PPA) from Tucson Electric Power Company (TEP) 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 their and TEP’s responsibilities for obtaining a PURPA based PPA.

There are 4 steps to begin the process.  The Applicant must:

  1. Submit an Interconnection Request (IR) to the TEP interconnection team and provide the TEP interconnection queue number assigned to the project.
  2. Provide a completed FERC 556 self-certification and associated docket number certifying that the project in question is a QF.
  3. Provide articles of organization for the company owning the QF.
  4. Fill out the TEP PURPA Preliminary Request For Information form (RFI) and upload all requested documents. You must have documented records for items 1–3 to submit the RFI form and begin the process.

After receiving a complete RFI questionnaire and the associated required documents, TEP will endeavor to review and comment within 10 business days. If any corrections or additional information is required, TEP will notify the applicant. Corrections and requests for additional information will need to be provided before the project can continue to the next step in the process. Once complete, TEP will assign a pricing queue number for the project.

Upon confirmation that all submitted information is correct, TEP will begin calculating the Avoided Cost rate for the applicant QF. The Avoided Cost rate will be broken out seasonally, show an annual average and presented in a Dollar/Megawatt hour format ($/MWh). TEP will endeavor to provide Avoided Cost pricing for the applicant QF within 25 business days of the date TEP certifies that the application documentation is complete.

After receiving the Avoided Cost rate, the applicant has 25 business days to review the pricing, ask questions and decide if they accept the rate and wish to continue the process. If the applicant chooses not to accept the rate given the process stops and the project will be removed from the pricing queue.

If the applicant accepts the Avoided Cost rate, within 25 business days TEP will provide a PPA for the QF project submitted which will contain the issued Avoided Cost rate and terms. The applicant has 25 business days to review the PPA. If the applicant declines to accept the PPA the process stops and the project will be removed from the pricing queue. If the applicant finds the terms acceptable, the authorized applicant must sign the agreement and forward to TEP. TEP will countersign and return to the applicant.

Inquiries about QF purchases must be directed to PURPA@tep.com.