The Public Utilities Regulatory Policies Act of 1978 (PURPA) made it mandatory for electric utilities to buy electricity from and connect with certain types of facilities called qualifying facilities (QFs). A Qualifying Facility (QF) can be either a small power production facility that generates up to 80 Megawatts (MW) of renewable energy from sources like hydro, wind, solar, biomass, waste, or geothermal resources, or a cogeneration facility that produces electricity and useful thermal energy (like heat or steam) together in a more efficient way than producing them separately.
How Does Qualifying Facility (QF) Work?
QFs operate through a Power Purchase Agreement (PPA) to receive payment for the electricity they generate. The pricing is determined by the avoided cost, which refers to the additional expense an electric utility would incur if it had to generate the same amount of energy or capacity by itself or purchase it from another source, instead of buying it from the QF.
How to Obtain QF Status for Your Facility
To obtain QF status for your facility, there are two options available. If your generating facility has a net power production capacity exceeding 1 MW (1000 kW), you can either submit a self-certification or apply for and receive a Commission certification of QF status. To initiate the process, you need to complete and electronically file Form No. 556 with the Commission. The form can be downloaded, filled out electronically, saved locally, and submitted as an attachment through the Commission’s online eFiling system. The instructions provided within the Form No. 556 itself offer additional guidance on the eFiling process. It’s important to note that self-certifications do not require a fee, whereas applications for Commission certifications involve a fee.
What are the Benefits of QF?
A Qualifying Facility (QF) has several advantages or benefits provided by Federal, State, and local laws. The benefits granted by Federal law can be categorized into three main areas:
- QFs have the capability to sell electricity or capacity directly to a utility.
- They have the option to procure specific services from utilities.
- They are exempted from certain regulatory obligations or burdens, providing them with relief.
Must Read: What is Quantum Efficiency (QE)?
