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Court sides with QF on Avoided Costs

Fortnightly Magazine - July 15 1995

The Massachusetts Supreme Court has overturned a decision by state regulators that would have allowed Commonwealth Electric Co. to escape paying capacity costs under a 20-year, avoided-cost, purchased-power contract with Plymouth Rock Energy Associates, developers of a 5-megawatt qualifying cogeneration facility (QF).

Citing no capacity need until 2001, the state Department of Public Utilities (DPU) had set the contract price at the utility's short-run energy purchase rate, but the court found a likely capacity need before the contract's eventual expiration, putting the DPU rate below avoided cost and in apparent violation of state regulations and the Public Utility Regulatory Policies Act. Plymouth Rock Energy Asso. v. Mass. DPU, No. SJC-06660, Apr. 26, 1995 (Mass. Supr. Ct.).

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