Qualifying Facility | Practical Law

Qualifying Facility | Practical Law

Qualifying Facility

Qualifying Facility

Practical Law Glossary Item 0-521-0210 (Approx. 3 pages)

Glossary

Qualifying Facility

A category of electric power producers established under the Public Utility Regulatory Policy Act of 1978 (PURPA) to encourage the diversification of the US domestic energy market. There are two types of qualifying facilities:
  • Small power production facilities. These are power plants with a capacity of less than 80 megawatts (MW) whose primary energy source is a renewable resource, including biomass, geothermal, hydroelectricity, solar, and wind. However, under certain circumstances, power plants that have a higher capacity may also qualify as a QF.
  • Cogeneration facilities. These are plants that produce both heat and electricity using any type of fuel.
(18 CFR §292.204 and 18 C.F.R. §292.205.)
QF status confers many advantages including:
  • The right to sell energy and capacity to a utility.
  • The right to buy electricity from utilities to meet their back-up, supplemental, and other energy needs at rates that are just and reasonable.
  • The right to interconnect to a utility's system on a non-discriminatory basis.
  • Relief, in some cases, from complying with the certain provisions of the Public Utility Holding Company Act of 2005, the Federal Power Act, and certain state laws.
An owner or operator of a generating facility or power plant with a capacity of greater than 1 MW (1000 kW) may obtain QF status by either submitting a self-certification or obtaining a certification of QF status from the Federal Energy Regulatory Commission.
For more information on qualifying facilities, see Practice Notes, Power Purchase Agreements: Key Issues and Provisions and Understanding Renewable Energy: Solar.