Qualifying Facilities and PURPA

The Public Utilities Policies Act of 1978 (PURPA) created an obligation for electric utilities to purchase energy and capacity from qualifying generation projects at the utility’s avoided cost rate. PURPA is implemented through a set of rules established by the Federal Energy Regulatory Commission (FERC) and the Arizona Corporation Commission (ACC). Qualifying Facilities (QFs) must meet certain criteria as specified in the FERC rules.

The process for a Qualifying Facility (QF) under the Public Utility Regulatory Policies Act (“PURPA”) to receive a Power Purchase Agreement (PPA) from Tucson Electric Power Company (TEP) is multi-step and iterative.

This section of our website is designed to guide applicants step-by-step through this process and help them understand the requirements for obtaining a PURPA based PPA.

There are 4 steps to begin the process.  The Applicant must:

  1. Submit an Interconnection Request (IR) to the TEP interconnection team and provide the TEP interconnection queue number assigned to the project.
  2. Provide a completed FERC 556 self-certification and associated docket number certifying that the project in question is a QF.
  3. Provide articles of organization for the company owning the QF.
  4. Fill out the TEP PURPA Preliminary Request For Information form (RFI) and upload all requested documents. You must have documented records for items 1–3 to submit the RFI form and begin the process.

Upon confirmation that all submitted information is correct, TEP will begin calculating the avoided cost rate for the applicant QF. Rates for energy and capacity purchased from a QF shall be priced at the long-run avoided cost based on the Company’s avoided cost methodology and the applicable generation technology. TEP will provide the avoided cost rate to the applicant QF within 25 business days of the date TEP certifies that the application documentation is complete.

After receiving the avoided cost rate, the applicant has 25 business days to review, ask questions and decide if they are willing to accept the rate in order to continue the PPA negotiation process. If the applicant chooses not to accept the rate, the process stops, and the project will be removed from the pricing queue.

If the applicant accepts the avoided cost rate, TEP will provide the QF with a PPA for the project within 25 business days.

Upon receiving the PPA, the applicant has 25 business days to review the terms and conditions of the PPA and notify the Company it wants to proceed with negotiations. If the applicant fails to notify the Company its intent to proceed with negotiations, the project will be removed from the pricing queue. Upon successful negotiation of a PPA, the authorized applicant must sign the agreement and forward to TEP. TEP will countersign and submit the contract to the ACC for final approval.

Inquiries about QF purchases must be directed to PURPA@tep.com.