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at specified times. ~f all' is-sins which must be res4l~ed in <br />contract ne,©tiations, that ~ ,avokde cost defiermihat on is <br />oremost. rnce 'avr~s a cost's termine rates,- t ey termine <br />tie' gnomic viakiilty of any small.. power project. The main <br />i sue ,discussed in the next chapter of this publication .is,, the- <br />determination of svoided costs. . <br />Alternative purchase and sale conditions <br />QFs have several options sutomatieaily available to thee::, , <br />First , power may be sold t© the utility on an "as availab-le~" <br />basis. For this power the QF wiil be paid avoded.CO~t~ ca1CU- <br />fated at the time of delivery of the power. The. r~rmah- pattern <br />under this arrangement is that, the QF gupplies its oan ..n,~ec~s. <br />first, then sells any excess power to .the utility when ?I:t is <br />.available. Second,' the QF may enter into a legally enforceable <br />contract for delivery of power -over a specified time, F`or .;thfs <br />power the QF can be paid either avoided costs ~°alculated at tip <br />of delivery or .calculated at the time the; contract is` signed:. <br />Third, the. QF may' simultaneously purchase all of its _ eleatri,c <br />requirements from the' utility and sell. the entice output from its <br />own generation to the utility.5 When the QF' elects "sim~ltaneoust - <br />purchase and sale.," rates far each must be'determined as~i~ ~pur~ <br />chase -and °sale were totally separate °act.ivities. <br />While QFs have an automatic right to :sell-:.power "asi°avail- <br />able" or elect "simultaneous purchase and sale," other marl~eting . <br />arrangements may be' made by appropriately. contracting with. the <br />utility. <br />Power sold by utili-ties`to QFs <br />Utilities are. required to sell four types of power- listed <br />below to QFS at "nondiscriminatory" rates.. These rates-wQUld be <br />those that the' QF would.. have been charged- had it :not .awned. any <br />generation capability. electric customers are charged oifferent <br />rates depending upon -their electric load characteristics;and the, <br />utility's cost of serving them. For this yeas©n rates d`f~er far <br />residential, commercial, and industrial customers. A Major part <br />of all rate cases in Colorado has to ,do with the ° cost af; ser~vi~g <br />customers of different types.' <br />,The cost of service, and' therefore rates, is `determined, by <br />thhe kind of power demanded by< customers. QFs have a right to <br />four different kinds of power:6 <br />1. Su lementary dower - This sat-isfies the, QF':s <br />re uirement~ over and,-, above its own,- generation, <br />capability. <br />2. Back-u ower - In the event of a forced, outage of <br />e Q ~ s generation equipment,.. back..-up `powe.r -may be. <br />needed to replace power which cannot be generated <br />internally, <br />3: ' <br />