Oregon Commission Adopts New Rules Related to QF Contracts

On April 25, 2023, the Oregon Public Utility Commission (Commission) issued an order in Docket No. AR 631 related to rules for contracting procedures and standard contracts for small qualifying facilities (QF) 10 MW and under. The Commission adopted new rules and directed the utilities in Oregon to file new standard contracts. 

This rulemaking started with an informal phase starting in January 2021 with Commission Staff and stakeholders that involved many rounds of comments and workshops. The rulemaking then moved into the formal phase starting in October 2021 with more rounds of comments, workshops, and Commissioner meetings.

The rules are comprehensive and cover a wide variety of topics including eligibility to receive a draft power purchase agreement, contracting procedures, security requirements, damages and termination, performance standards, commercial operation dates, insurance requirements, incremental facility upgrades, force majeure, and much more. One key change is that QFs may now select a commercial operation date up to five years from the date of contract execution. In some instances, this may shorten the time period for fixed prices. Another major change is that new QFs that are not creditworthy will be required to post project development security up to $150/kW and default security up to $50/kW. Project development security must be posted within 120 days of contract execution. Rules surrounding force majeure were removed from the rules and will be left to be defined in each utility’s standard contract. Finally, a number of changes were made in the rules for the contracting procedures, including adding a duty of good faith and fair dealing. The utilities must file revised standard contracts for review to determine if the contracts comply with the new rules by June 26, 2023.

Sanger Law, PC represented the Northwest & Intermountain Power Producers Coalition (NIPPC) and the Renewable Energy Coalition (REC) in this proceeding.

NIPPC represents electricity market participants in the Pacific Northwest, including independent power producers, electricity service suppliers, and transmission companies. NIPPC is committed to facilitating cost-effective electricity sales, offering consumers choices in their energy supply, and advancing fair, competitive power markets.

REC advocates for reasonable Public Utility Regulatory Policies Act and interconnection policies on behalf of renewable qualifying facilities that are located in Idaho, Montana, Oregon, Utah, Washington, and Wyoming.

These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.