1982-043 101L (7L)
AN ORDINANCE AMENDING CHAPTER 25, ARTICLE VI OF THE CODE OF
ORDINANCES OF THE CITY OF DENTON, TEXAS, 1966, Aq AMENDED BY
ADDING THERETO NEW SECTIONS 25-96 THROUGH 25-101, ESTABLISHING
THE POLICIES RELATING TO INTERCONNECTIONS OF THE ELECTRIC SYSTEM
OF THE CITY OF DENTON WITH COGENERATION AND SMALL POWER
PRODUCTION FACILITIES, PRESCRIBING DEFINITIONS AND POLICIES
RELATING TO INTERCONNECTIONS WITH QUALIFYING FACILITIES, RATES
FOR SALES OF ELECTRIC ENERGY TO QUALIFYING FACILITIEq, AND RATES
FOR PURCHASES OF ELECTRIC ENERGY FROM QUALIFYING FACILITIES, AND
PROVIDING AN EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
PART I
That Chapter 25, Article VI "Private Utility Franchise
Regulations" of the Code of Orldnances of the City of Denton,
Texas, as amended, 1966, is further amended by adding thereto
new Sections 25-96 through and Including Section 25-]01 which
shall read as follows
GENERAL PROVISIONS
SECTION 25-96 PURPOSE
In order to comply with Sections 701 and 210 of the Public
Utility Regulatory Policies Act of ]978 and with the rules and
regulations of the Federal Energy Regulatorv Commission
pertaining thereto, the following policies relating to
lnterconnections of the electric system of the City of Denton,
Texas, with cogeneration and small power production facilities,
rates for sales of electric energy to such facilities, and rates
for purchases of electric energy from such facilities are hereby
established
SECTION 25-97 SCOPE
The Public Utility Regulatory Policies Act (PURPA), as
supplemented by the Federal Energy Regulatory Commission (FERC)
Order #69, issued February 19, 1980, encourages cogeneratlon in
small power production Cogeneratlon is the production of
electric energy as well as steam or other forms of useful
energy, i e , heat, which are used for industrial/commercial
heating and/or cooling purposes gmall power Droductlon ls a
facility with less than 80,000 kilowatts of installed capacity
which produces electricity from such primary energy sources as
bio-mass, waste, and renewable resources, including wind, solar,
geothermal or hydroelectric energy
The City of Denton Department of Utilities 3s required by
PURPA and FERC guidelines to Interconnect with, operate in
parallel with, purchase electricity from, and sell electricity
to customers wlth qualified facilities These guidelines make
~t clear that the C~ty's customers are to be no worse off by
addition of ¢ogenerator and small power producers It means
that they will not see a h~gher cost of electricity, the City
will not be required to make additional Investments, and the
quality of service will not be lowered
SECTION 25-98 DEFINITIONS
Unless the context specifically lndlcates otherwise, the
meaning of terms used in this Ordinance shall be as follows
(]) "COGENERATION FACILITY" shall mean a faclllty which
produces electric energy and steam or other forms
of useful energy (such as heat) which are used for
industrial, commercial, heating, or cooling
purposes
(2) "QUALIFYING COGENERATION FACILITY" shall mean a
cogenerat~on facility that meets the requirements
of the Federal Energy Regulatory Commission
regardlng ownership, fuel use, and operating and
efficiency standards
(3) "SMALL POWER PRODUCTION FACILITY" shall mean a
facility which produces electric energy solelv by
the use, as a primary energy source, of blomass,
waste, renewable resources, or any combination
thereof totaling not greater than e~ghty (80)
megawatts at one site
(4) "QUALIFYING SMALL POWER PRODUCTION FACILITY" shall
mean a small power production faclllty that meet~
the requirements of the Federal Energy Regulatory
Commiss~on regarding ownership, fuel use, fuel
efficiency, and reliability
(5) "INTERCONNECTION COSTS" shall mean the reasonable
costs of connection, switching, metering,
transmission, d~str~butlon, safety provisions, and
administrative costs incurred by the electric
utility directly related to the installation and
maintenance of the physical facilities necessary to
permit Interconnected operations w~th a qualifying
facllity, to the extent such costs are ~n excess of
the corresponding costs which the electric utility
would have incurred if it had not engaged ~n
Interconnected operations, but ~nstead generated
an equivalent amount of electric energy itself or
purchased an equivalent amount of electric energy
or capacity from other sources (Interconnectlon
costs do not include any costs involved in the
calculation of avoided costs )
(6) "AVOIDED COSTS" shall mean the incremental costs
to an electric utility of electric energy or
capacity or both which, but for the purchase from
qualifying facilities, such utility would generate
itself or purchase from another source
SECTION 25-99 INTERCONNECTIONS WITH QUALIFYING FACILITIES
(]) Qualifying facilities desiring to interconnect with the
electric system of the City of Denton shall make appllcatlon to
the Department of Utilities for such lnterconnectlon
Applicants shall use such forms as are prescribed by the City of
Denton and shall furnish all information requested
(2) The City of Denton shall establish reasonable standards
to be met by qualifying facllltles to ensure system safety and
reliability of interconnected operations Such standards may
include but shall not be limited to the following areag power
factor, voltage regulation, fault, overcurrent, and over-under
voltage protection, harmonics, synchronization, and isolation
(3) Interconnectlon costs associated with the inter-
connection with a qualifying facility shall be paid for by such
qualifying facility Qualifying facilities shall be required to
execute contractual agreements with the City of Denton befor~
any lnterconnectlon is established
SECTION 25-100 RATES FOR SALES OF ELECTRIC ENERGY TO
QUALIFYING FACILITIES
Rates for sales of electric energy to qualifying facilities
shall be those current standard rates adopted from time to t~me
by ordinance or resolution of the Mayor and City Council which
apply to other customers of the utility in the same
classification(s) of electric service
SECTION 25-101 RATES FOR PURCHASES OF ELECTRIC ENERGY
FROM QUALIFYING FACILITIFS
(]) Rates for purchases of electric energy from qualifying
facilities shall be established by ordinance or resolution of
the Mayor and City Council
(2) Such rates shall be ~ust and reasonable to the electric
consumer of the utility and in the public interest, shall not
discriminate against qualifying cogeneratlon and sma]] power
production facilities, and shall be related to avoided costs,
however, in no case is the utility required to pay more than the
avoided costs
(3) Standard rates shall be established for purchases from
qualifying facilities with a design capacity of 100 kilowatts or
less Rates for purchases from qualifying facilities with a
design capacity over 100 kilowatts may be standard rates or may
be by Individual contracts, the terms of which are fair and
reasonable
PART II
That if any section, subsection, paragraph, sentence,
clause, phrase or word in this Ordinance, or application thereof
to any person or circumstances is held invalid by any court of
competent jurisdiction, such holding shall not affect the
validity of the remaining portions of this Ordinance, and the
City Council of the City of Denton, Texas, hereby declares
would have enacted such remaining portions despite any such
invalidity
PART III
That this ordinance shall be and become effectIve from and
after its adoption
PASSED AND APPROVED this //~--day of May, 1982
ATTEST
CITY OF DENTON, TEXAS
APPROVED AS TO LEGAL FORM
C J TAYLOR, JR , CITY ATTORNEY
CITY OF DENTON, TEXAS