AB 1613 (Assembly Bill 1613) - Standard Contracts for Combined Heat and Power Facilities

Pacific Gas and Electric (PG&E) offers long-term wholesale electric energy contracts to eligible Combined Heat and Power (CHP) generators under Assembly Bill 1613 (AB 1613), known as the Waste Heat and Carbon Emissions Reduction Act. This program encourages the development of new CHP facilities in California by purchasing excess power from facilities that meet specific qualifications.

Eligible CHP facilities must have a generating capacity of no more than 20 megawatts, have begun operations no earlier than January 1, 2008, and must meet efficiency requirements issued by the California Energy Commission (CEC). The facilities must also comply with Public Utilities Regulatory Policy Act (PURPA) requirements unless owned by a public agency exempt from Federal Energy Regulatory Commission jurisdiction.

PG&E offers three standardized contracts based on facility size: facilities with less than 500 kW capacity (Electric Sample Form 79-1138), facilities with no more than 5 MW contract capacity (Electric Sample Form 79-1121), and facilities with capacity up to 20 MW (Electric Sample Form 79-1120). All contracts are CPUC-approved and cannot be modified or negotiated. Contract terms range from one to ten years, with the seller determining the contract length at execution. Deliveries must begin no later than 24 months after PPA execution for existing CHP facilities, or 60 months for new CHP facilities.

Pricing comprises both fixed and variable components. The fixed component is based on the Market Price Referent approved by the CPUC and does not increase during the contract term. The variable component is derived from monthly gas prices multiplied by a fixed heat rate and escalating variable Operations and Maintenance rates. A 10 percent energy price adder (location bonus) applies if the facility is interconnected within a California Independent System Operator (CAISO)-identified Local Resource Adequacy area during the contract year. Facilities must obtain CEC certification before operations commence and must provide resource adequacy delivery status under CAISO rules to receive full AB 1613 pricing.