528 - Use of foreign coal by qualifying facilities.

     § 528.  Use of foreign coal by qualifying facilities.        (a)  Legislative findings.--The General Assembly hereby finds     as follows:            (1)  Potential qualifying facilities which would generate        electricity from United States energy sources are, and will        for the foreseeable future continue to be, able to supplement        adequately the capacity needs of public utilities in this        Commonwealth.            (2)  Some of those qualifying facilities offer the        multiple benefits of supplying electricity to Pennsylvania        ratepayers at a reasonable price, creating jobs in areas of        high unemployment in this Commonwealth and helping to clean        up this Commonwealth's environment.            (3)  Although Federal law places a duty on public        utilities to buy electricity generated by qualifying        facilities, Federal law does not dictate how the price paid        by public utilities and the charges to ratepayers for that        electricity are to be calculated.            (4)  The energy source used by a qualifying facility is a        significant factor in determining if a qualifying facility        would be able to meet its commitment to supply electricity to        a public utility at a reasonable price.            (5)  Coal mined in a foreign country is subject to major        supply interruptions, price increases and quality reductions        which are unpredictable and which may result not only from        market factors, but also from foreign policy decisions of the        United States Government or one or more foreign governments        or from domestic policy changes in the foreign country in        which the coal is mined.            (6)  It is much easier for a public utility and the        commission to predict the reliability of a qualifying        facility and the reasonableness of the price of the        electricity to be supplied by that qualifying facility if        United States energy sources are to be used than if coal        mined in a foreign country is to be used.            (7)  A qualifying facility which would burn coal mined in        a foreign country is too potentially unreliable to justify a        public utility in foregoing alternative capacity commitments        and in paying the qualifying facility a price which includes        any capacity credit.        (b)  General rule.--The price paid by a public utility to a     qualifying facility and the charge imposed on the utility's     ratepayers for electricity generated by that qualifying facility     shall not include any capacity credit if that qualifying     facility burns coal mined in a foreign country.        (c)  Restriction on contract approval.--The commission shall     not approve any contract between a public utility and a     qualifying facility which burns coal mined in a foreign country     for the purchase by the utility of electricity generated by the     qualifying facility unless:            (1)  the price to be paid by the utility reflects no more        than the actual avoided cost of the utility when the payment        is made; and            (2)  the contract does not exceed five years in duration.        (d)  Review of contracts.--Notwithstanding any other     provision of law, a contract in effect on the effective date of     this section or thereafter between a public utility and a     qualifying facility for the purchase by the utility of     electricity generated by the qualifying facility shall, after     notice and hearing, be subject to review and modification in     accordance with subsections (b) and (c) at any time upon     complaint or upon the commission's own motion if the qualifying     facility burns coal mined in a foreign country.        (e)  Recovery from ratepayers.--For the express purpose of     implementing the intent of this section, a public utility shall     not be permitted to recover from ratepayers pursuant to section     1307 (relating to sliding scale of rates; adjustments) any of     the costs associated with a contract between the utility and a     qualifying facility which burns coal mined in a foreign country     for the purchase by the utility of electricity generated by the     qualifying facility. Any such costs which the commission     determines to be reasonable and prudent shall be recoverable     only through a base rate proceeding pursuant to Chapter 13     (relating to rates and rate making).        (f)  Definition.--For the purposes of this section,     "qualifying facility" means any cogeneration facility or small     power producer which is a qualifying facility pursuant to the     Federal Energy Regulatory Commission's guidelines set forth at     18 CFR §§ 292.101(b)(1) (relating to definitions) and 292.203(a)     and (b) (relating to general requirements for qualification).        (g)  Severability.--The provisions of this section shall be     severable. If any provision of this section or the application     thereof to any public utility, qualifying facility or     circumstance is held invalid, the remainder of this section and     the application of any provision thereof to any other public     utilities, qualifying facilities or circumstances shall not be     affected thereby.     (July 6, 1988, P.L.490, No.83, eff. imd.)        1988 Amendment.  Act 83 added section 528.