2010 Pennsylvania Code
Title 66 - PUBLIC UTILITIES
Chapter 5 - Powers and Duties
528 - Use of foreign coal by qualifying facilities.

     § 528.  Use of foreign coal by qualifying facilities.
        (a)  Legislative findings.--The General Assembly hereby finds
     as follows:
            (1)  Potential qualifying facilities which would generate
        electricity from United States energy sources are, and will
        for the foreseeable future continue to be, able to supplement
        adequately the capacity needs of public utilities in this
        Commonwealth.
            (2)  Some of those qualifying facilities offer the
        multiple benefits of supplying electricity to Pennsylvania
        ratepayers at a reasonable price, creating jobs in areas of
        high unemployment in this Commonwealth and helping to clean
        up this Commonwealth's environment.
            (3)  Although Federal law places a duty on public
        utilities to buy electricity generated by qualifying
        facilities, Federal law does not dictate how the price paid
        by public utilities and the charges to ratepayers for that
        electricity are to be calculated.
            (4)  The energy source used by a qualifying facility is a
        significant factor in determining if a qualifying facility
        would be able to meet its commitment to supply electricity to
        a public utility at a reasonable price.
            (5)  Coal mined in a foreign country is subject to major
        supply interruptions, price increases and quality reductions
        which are unpredictable and which may result not only from
        market factors, but also from foreign policy decisions of the
        United States Government or one or more foreign governments
        or from domestic policy changes in the foreign country in
        which the coal is mined.
            (6)  It is much easier for a public utility and the
        commission to predict the reliability of a qualifying
        facility and the reasonableness of the price of the
        electricity to be supplied by that qualifying facility if
        United States energy sources are to be used than if coal
        mined in a foreign country is to be used.
            (7)  A qualifying facility which would burn coal mined in
        a foreign country is too potentially unreliable to justify a
        public utility in foregoing alternative capacity commitments
        and in paying the qualifying facility a price which includes
        any capacity credit.
        (b)  General rule.--The price paid by a public utility to a
     qualifying facility and the charge imposed on the utility's
     ratepayers for electricity generated by that qualifying facility
     shall not include any capacity credit if that qualifying
     facility burns coal mined in a foreign country.
        (c)  Restriction on contract approval.--The commission shall
     not approve any contract between a public utility and a
     qualifying facility which burns coal mined in a foreign country
     for the purchase by the utility of electricity generated by the
     qualifying facility unless:
            (1)  the price to be paid by the utility reflects no more
        than the actual avoided cost of the utility when the payment
        is made; and
            (2)  the contract does not exceed five years in duration.
        (d)  Review of contracts.--Notwithstanding any other
     provision of law, a contract in effect on the effective date of
     this section or thereafter between a public utility and a
     qualifying facility for the purchase by the utility of
     electricity generated by the qualifying facility shall, after
     notice and hearing, be subject to review and modification in
     accordance with subsections (b) and (c) at any time upon
     complaint or upon the commission's own motion if the qualifying
     facility burns coal mined in a foreign country.
        (e)  Recovery from ratepayers.--For the express purpose of
     implementing the intent of this section, a public utility shall
     not be permitted to recover from ratepayers pursuant to section
     1307 (relating to sliding scale of rates; adjustments) any of
     the costs associated with a contract between the utility and a
     qualifying facility which burns coal mined in a foreign country
     for the purchase by the utility of electricity generated by the
     qualifying facility. Any such costs which the commission
     determines to be reasonable and prudent shall be recoverable
     only through a base rate proceeding pursuant to Chapter 13
     (relating to rates and rate making).
        (f)  Definition.--For the purposes of this section,
     "qualifying facility" means any cogeneration facility or small
     power producer which is a qualifying facility pursuant to the
     Federal Energy Regulatory Commission's guidelines set forth at
     18 CFR §§ 292.101(b)(1) (relating to definitions) and 292.203(a)
     and (b) (relating to general requirements for qualification).
        (g)  Severability.--The provisions of this section shall be
     severable. If any provision of this section or the application
     thereof to any public utility, qualifying facility or
     circumstance is held invalid, the remainder of this section and
     the application of any provision thereof to any other public
     utilities, qualifying facilities or circumstances shall not be
     affected thereby.
     (July 6, 1988, P.L.490, No.83, eff. imd.)

        1988 Amendment.  Act 83 added section 528.