Oregon PUC requires PGE to Offer 15 Year Fixed Price QF Contracts

On July 13, 2017, the Oregon Public Utility Commission (Oregon Commission) ordered PGE to begin allowing qualifying facilities (QF) the option to enter into power purchase agreements (PPA) with fifteen years of fixed prices. The order was consistent with the Oregon Commission’s previously articulated policy that Oregon utilities must offer PPAs with fixed-price periods of fifteen years.   

A complaint was filed against PGE by the Northwest and Intermountain Power Producers Coalition, Renewable Energy Coalition, and Community Renewable Energy Association, which are trade associations representing renewable energy and independent power generators. The complaint requested that PGE be forced to conform its practices to be consistent with its current Oregon Commission-approved standard contract, which they alleged required fifteen years of fixed prices. PGE had interpreted its standard contract as offering fixed prices at the time of contract execution rather than power deliveries. As new QFs take between one and four years to be built, PGE’s interpretation would result in most QFs only being paid between 11 and 14 years of fixed prices.

Without any analysis of the standard contract terms or any explanation, the Oregon Commission concluded that PGE’s standard contract filings limited the availability of fixed prices to the first fifteen years measured from contract execution.

The Oregon Commission, however, provided relief on a going forward basis by requiring PGE to revise its standard contract with language consistent with the requirement that the 15-year term of fixed prices commence when the QF transmits power to the utility. The Oregon Commission recognized that PGE’s approved standard contract was inconsistent with its policy because it began the 15-year fixed price period upon contract execution. The Oregon Commission recognized that prices “paid” to a QF are only meaningful when a QF is actually delivering power to the utility. The Oregon Commission explained that, to provide a QF the full benefit of the fixed-price requirement, the 15-year term must commence on the date of power delivery.

 

 

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