QF Fails to Raise Avoided Cost Rates

Fortnightly Magazine - July 1 1996
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The West Virginia Public Service Commission (PSC) has ruled that it is preempted by federal law from modifying the avoided-cost rate in a purchased-power agreement implemented under the Public Utility Regulatory Policies Act of 1978 (PURPA).

The developers of a qualifying cogeneration facility (QF), Bituminous Power Partners, L.P., had asked the PSC to raise the contract rate for avoided energy in its purchased-power contract with Monongahela Power Co. Complaining of substantial operating losses and cash flow problems due to lower-than-forecasted energy costs for the utility as well as higher-than-forecasted operating expenses for the cogeneration plant, Bituminous asked the PSC to raise the current payments under the contract from 1.455 cents per kilowatt-hour (¢/Kwh), the utility's current actual avoided energy rate, to 1.9¢/Kwh.

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