(1) Each utility shall purchase any energy and capacity made available by a qualifying facility, except that a utility is not obligated to make purchases from an interconnected qualifying facility:

(i) during system emergencies if such purchase would contribute to the emergency;

(ii) as stipulated in the contract between the utility and the qualifying facility;

(iii) if, due to operational circumstances, purchases from a qualifying facility will result in costs greater than those which the utility would incur if it did not make such purchases. This provision is only applicable in the case of light loading periods in which the utility must cut back base load generation in order to purchase the qualifying facility's production followed by an immediate need to utilize less efficient generating capacity to meet a sudden high peak. Any utility seeking to invoke this exception must notify each affected qualifying facility and the commission one month prior to the time it intends to invoke this provision. Failure to properly notify the qualifying facilities and the commission or incorrect identification of such a period will result in reimbursement to the qualifying facility by the utility in an amount equal to that amount due had the qualifying facility's production been purchased.

(2) Except as provided in ARM 38.5.1903(1) , each utility shall purchase any energy and capacity made available by a qualifying facility:

(a) At a standard rate for such purchases which is based on avoided costs to the utility as determined by the commission; or

(b) If the qualifying facility agrees, at a rate which is a negotiated term of the contract between the utility and the facility and not to exceed avoided cost to the utility. However, the utility shall offer long-term contracts with qualifying facilities which permit a rate higher than avoided costs in the early years of the contract and a lower rate in the latter years.

(3) Each utility shall sell to any qualifying facility all electricity requested by the facility.

(4) Each utility shall make such interconnections with a qualifying facility in accordance with the provisions of ARM 38.5.1904.

(5) Each utility shall offer each qualifying facility the option of:

(a) operating in parallel with the utility grid, with a single meter monitoring only the net amount of electricity purchased or sold, or

(b) operating in a simultaneous purchase and sale arrangement with separate meters whereby all power produced by the qualifying facility is sold to the utility at the standard or negotiated purchase rate and all power used by the facility is sold to the facility by the utility at the tariff rate; provided that the requirements of ARM 38.5.1907 are met by the qualifying facility.

(6) Any utility which is otherwise obligated to purchase energy or capacity from a qualifying facility may, if the affected qualifying facility agrees, transmit energy or capacity purchased from the facility to any other electric utility. Any electric utility subject to the commission's jurisdiction that receives this energy or capacity shall be subject to the pricing provisions contained in these rules. The cost of transmission may be assigned to the qualifying facility.

(7) Each utility shall, if required by the commission, include installation and performance incentive provisions in any contract with a qualifying facility. Such provisions shall offer a maximum dollar amount per kw per month for any month in which the facility's energy output meets or exceeds specified levels of performance.

(8) Each utility shall, upon initial contact with a potential qualifying facility, provide the potential qualifying facility with one (1) copy of:

(a) these rules,

(b) the commission's approved standard provisions tariff, and

(c) the commission's standard complaint procedure.

History: 69-3-103, MCA; IMP, 69-3-102, MCA; NEW, 1981 MAR p. 459, Eff. 5/15/81.