§ 23-3-704 - Basis of rate determination -- Waiver of avoided cost standard.
23-3-704. Basis of rate determination -- Waiver of avoided cost standard.
(a) A determination of the avoided energy cost rate or rates for the electric utility shall be based on the electric utility's estimated avoided cost of producing or purchasing electrical energy during the time period of the purchase of electrical energy from the qualifying facility. It shall not be based upon the production or purchase of electrical energy at any time other than during the time period of the purchasing of electrical energy from the qualifying facility. A determination of the avoided capacity cost rate or rates for the electric utility shall be based at the electric utility's cost of capacity additions or purchases avoided during the time period of the purchase of electrical capacity from the qualifying facility. It shall not be based upon the purchase of electrical capacity at any time other than during the time period of the purchase of electrical capacity from the qualifying facility.
(b) (1) In the event the Arkansas Public Service Commission finds and determines that the avoided cost rate is not necessary to encourage the appropriate amount of construction of qualifying facilities and that a rate less than the avoided cost rate is just and reasonable to the electric consumer of the electric utility, is in the public interest, and will not discriminate against qualifying facilities, the Arkansas Public Service Commission shall take all reasonable and appropriate steps to obtain a waiver of the avoided cost standard from the Federal Energy Regulatory Commission or any successor agency.
(2) In addition, a determination of the avoided cost rate or rates for energy or capacity purchased by an electric utility shall:
(A) Be just and reasonable to the electric consumer of the electric utility and in the public interest; and
(B) Not discriminate against qualifying cogeneration and small power production facilities.
(c) Nothing in this subsection requires any electric utility to pay more than the avoided costs for purchases.