Section 454.6 Of Article 1. Rates From California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 3. >> Article 1.
454.6
. (a) A contract entered into pursuant to Section 454.5 by an
electrical corporation for the electricity generated by a replacement
or repowering project that meets the criteria specified in
subdivision (b) shall be recoverable in rates, taking into account
any collateral requirements and debt equivalence associated with the
contract, in a manner determined by the commission to provide the
best value to ratepayers.
(b) To be eligible for rate treatment in accordance with
subdivision (a), a contract shall be for a project which meets all of
the following criteria:
(1) The project is a replacement or repowering of an existing
generation unit of a thermal powerplant.
(2) The project complies with all applicable requirements of
federal, state, and local laws.
(3) The project will not require significant additional
rights-of-way for electrical or fuel-related transmission facilities.
(4) The project will result in significant and substantial
increases in the efficiency of the production of electricity.
(5) The Independent System Operator or local system operator
certifies that the project is needed for local area reliability.
(6) The project provides electricity to consumers of this state at
the cost of generating that electricity, including a reasonable
return on the investment and the costs of financing the project.