Qualifying Facilities (PURPA Standard Offer Contract)

Consistent with the Federal Energy Regulatory Commission’s (FERC) PURPA regulations 18 C.F.R. § 292.304, the new Qualifying Facilities Standard Offer Contract (“New QF SOC”) adopted through California Public Utilities Commission (CPUC) Decision (D.) 20-05-006 includes the following two pricing options for both capacity and energy. See table below.

Notice: On December 22, 2020, SDG&E, together with the other Investor-Owned Utilities (IOUs), sent a letter to the Executive Director of the California Public Utilities Commission (Commission) requesting suspension of the fixed energy price option of the New QF Standard Offer Contract (SOC), consistent with the Federal Energy Regulatory Commission’s Order No. 872, which became effective on January 1, 2021. If any QF files an application requesting the fixed energy price option and the Commission acts to suspend it before the New QF SOC is executed, SDG&E will deny the application and offer the QF the option of taking a variable energy price together with a fixed capacity price instead.

Pricing Option	Energy Price	Capacity Price
Fixed Price Option: Seller elects pricing fixed at time of contract execution	3-year average of publicly available CAISO locational marginal prices for the PNode specific to QF Calculated on a monthly basis with periods based on the Commissioner's most recently approved standard time-of-use periods, and a collar based on prices at the relevant Energy Trading Hub	5-year weighted average of publicly available resource adequacy prices Shaped to time periods based on generation capacity allocation factors adopted by the Commission and applied to updated time-of-use periods 2.5% escalation factor for each year of the contract term after the last year included in the average A capacity price is based on the provision of Resource Adequacy.
Pricing at Time of Delivery Option : Seller elects pricing at time of delivery	Locational marginal pricing from CAISO's day-ahead market for the node specific to a QF	Same methodology used for capacity price at time of execution (above) Price recalculated annually based on changes in the cost of RA and/or capacity allocation factors, and time-of-use periods

Pricing Option

Energy Price

Capacity Price

Fixed Price Option: Seller elects pricing fixed at time of contract execution

3-year average of publicly available CAISO locational marginal prices for the PNode specific to QF

Calculated on a monthly basis with periods based on the Commissioner's most recently approved standard time-of-use periods, and a collar based on prices at the relevant Energy Trading Hub

5-year weighted average of publicly available resource adequacy prices

Shaped to time periods based on generation capacity allocation factors adopted by the Commission and applied to updated time-of-use periods

2.5% escalation factor for each year of the contract term after the last year included in the average

A capacity price is based on the provision of Resource Adequacy.

Pricing at Time of Delivery Option : Seller elects pricing at time of delivery

Locational marginal pricing from CAISO's day-ahead market for the node specific to a QF

Same methodology used for capacity price at time of execution (above)

Price recalculated annually based on changes in the cost of RA and/or capacity allocation factors, and time-of-use periods

The maximum term for the New QF SOC is twelve years for new facilities and seven years for existing facilities, and the contract will be available until suspended by the CPUC’s Executive Director.

Parties interested in submitting an offer for a New QF SOC should first certify or recertify itself with FERC using Form 556. Once the certification docket number is available, the completed Form 556.

Disclaimers

The PURPA QF information on this page (including any presentations prepared by SDG&E and any imbedded links) is provided by SDG&E as a convenience to the public. This information may not completely or accurately describe or link to all relevant provisions of the PURPA QF regulations, and expressly does not constitute legal advice to or for any party. A party should consult with appropriate experts on how the PURPA QF regulations can impact any specific transaction, agreement, relationship, or circumstance. The publication of the information on this page does not constitute an offer to buy or sell electricity. Every PURPA QF power purchase agreement between SDG&E and any party is subject to SDG&E management approval and the prior execution of definitive documents by both parties.