| (i) Applicability of CTC to customers receiving power from
new on-site generation or eligible generation. A retail customer receiving
power from new on-site generation or eligible generation to serve its internal
electrical requirements may not avoid payment of stranded costs except as
provided in this subsection. A customer's responsibility for payment of stranded
costs shall be determined as follows:
(1) No CTC. An end-user whose actual load is lawfully served
by eligible generation and who does not receive any electrical service that
requires the delivery of power through the facilities of a transmission and
distribution utility is not responsible for payment of any stranded cost charges.
(2) CTC for eligible generation. A retail customer whose
actual load is lawfully served by eligible generation who also receives electrical
service that requires the delivery of power through the facilities of a transmission
and distribution utility shall be responsible for payment of stranded cost
charges based solely on the services that are actually provided by the transmission
and distribution utility, if any, to the customer after the eligible generation
facility became fully operational, such as delivery of supplemental, standby,
or backup service. Such charges may not include any costs associated with
the service that the customer was receiving from the electric utility or its
affiliated transmission and distribution utility under their tariffs before
the operation of the eligible generation. A customer who changes the type
of service received from the electric utility or its affiliated transmission
and distribution utility after the customer commences taking energy from eligible
generation will pay stranded cost charges associated with the service it is
actually receiving from the transmission and distribution utility.
(3) CTC for new on-site generation. A retail customer
who commences taking power from new on-site generation that represents a material
reduction in the customer's use of energy delivered through the utility's
facilities shall be responsible for payment of stranded cost charges that
are calculated by multiplying the output of the new on-site generation utilized
to meet the internal electrical requirements of the customer each month by
the sum of the applicable stranded cost charges in effect for that month.
The applicable CTC for such customer shall be the CTC associated with the
service that the customer was receiving from the electric utility prior to
switching to new on-site generation. These stranded cost charges shall be
paid in addition to the stranded cost charges applicable to energy actually
delivered to the customer through the transmission and distribution utility's
facilities. A customer who commences taking power from new on-site generation
that does not represent a material reduction in the customer's use of energy
delivered through the transmission and distribution utility's facilities shall
pay the CTC calculated as set forth in paragraph (2) of this subsection for
that portion of the customer's load served by the new on-site generation.
(4) Material reduction. For purposes of this subsection,
a material reduction shall be a reduction of 12.5% or more of the retail customer's
use of energy delivered through the utility's transmission and distribution
facilities. The reduction shall be calculated by comparing the customer's
monthly use of energy attributable to new on-site generation to the customer's
average monthly use of energy delivered through the utility's facilities for
the 12-month period immediately preceding the date on which the customer commenced
taking energy from the new on-site generation.
(5) Multiple on-site power production facilities. A retail
customer may designate any number of on-site power production facilities located
on a single site as eligible generation under subsection (c)(2)(B) of this
section as long as the sum of rated capacities of such facilities does not
exceed ten megawatts. Stranded cost charges for any on-site power production
facility with a rated capacity of ten megawatts or less, not designated as
eligible generation under this paragraph, shall be calculated in accordance
with the methodology set forth in paragraph (3) of this subsection for new-on-site
generation that results in a material reduction in the retail customer's use
of energy delivered through the utility's transmission and distribution facilities.
For purposes of determining whether the installation of multiple on-site power
production facilities under this paragraph has caused a material reduction
in the customer's use of energy under paragraph (4) of this subsection, all
of the energy delivered to the customer from such facilities will be taken
into account. A customer may not create separate entities on a single site
for the purpose of gaining exemptions under this paragraph. A retail customer
may change the designation of such an on-site power production facility:
(A) No sooner than one year after the facility's initial designation;
(B) No sooner than one year after the facility's subsequent
designation; or
(C) Upon addition or retirement of any such on-site power production
facility being used to serve the customer's load.
(6) Reporting requirements. Persons owning or operating
new on-site generation or eligible on-site generation shall submit the information
required by §25.105 of this title (relating to Registration and Reporting
by Power Marketers, Exempt Wholesale Generators, and Qualifying Facilities).
Those persons shall also comply with procedures and reporting requirements
described in the transmission and distribution utility's tariffs related to
the assignment and collection of the CTC from eligible and new on-site generation
and any other commission rule or regulation related to the implementation
of this section.
(7) Adjustment to overall CTC. On and after January 1,
2005, the commission will periodically review the overall allocation of the
CTC among customers and/or customer classes to incorporate the loss of contribution
due to customers taking advantage of the specific statutorily granted exceptions
under this section and adjust the charges prospectively. To the extent these
are known and measurable at the time of the April 2000 filing, sufficient
information shall be provided by the filing utility to allow for calculation
of the CTC.
(j) Collection and rate design of CTC charges. These charges
shall be billed to a customer's retail electric provider. The CTC shall recover
the amount of stranded costs as defined in PURA, Chapter 39, Subchapter F
that are reasonably projected to exist on the last day of the freeze period.
Utilities shall consolidate existing rate classes into the minimum number
of classes needed to sufficiently recognize differences in usage of the underlying
generation assets. Customers shall be classified into no fewer than the following
classes: Residential, Commercial, Firm Industrial, Non-firm, and Back-up Service.
No customer classes shall be materially disadvantaged by class consolidation.
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