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Standard contracts for Combined Heat and Power (CHP) facilities

Long-term wholesale electric energy contracts to eligible generators

Learn about AB 1613


This page provides an overview of the PG&E FiT program for new and efficient CHP facilities.


Please note: FiT is pursuant to Assembly Bill (AB) 1613 (Stats. 2007, Ch. 713). The bill is known as the "Waste Heat and Carbon Emissions Reduction Act" (Act). Information about the bill is located in California Public Utilities Code section 2840.


Visit Public Utilities Code Section 2840-2845


Understanding AB 1613 and its requirements


AB 1613 encourages the development of new CHP facilities in California. Under this program, PG&E purchases excess power from facilities that meet qualifications defined by the Public Utilities Regulatory Policy Act (PURPA).


Qualifications include:

  • Have a generating capacity of not more than 20 megawatts ("MW")
  • Began operations no earlier than January 1, 2008
  • Meet the efficiency requirements issued by the California Energy Commission (CEC) for CHP facilities according to AB 1613


The all-in price that PG&E pays is:

  • Adopted by the California Public Utilities Commission (CPUC)
  • Based on the capital cost of a combined cycle gas turbine
  • Based on a variable natural gas based price.

Visit Prices for Qualifying Facilities & Eligible Combined Heat and Power Facilities


Learn about the types of agreements


A 10 percent energy price adder "location bonus" can apply if the California Independent System Operator (CAISO) identifies generators interconnected in an area as having local resource adequacy requirements. The term of the agreement is from one to ten years.

Depending on the size of the generator, PG&E's AB 1613 tariff offers three contracts or power purchase agreements (PPAs). The contracts are approved by the CPUC and cannot be modified or negotiated. Download your choice of contract:



Learn more about AB 1613 Rulemaking and final decision


Prices, terms and conditions of the contracts were agreed upon in a final decision and during AB 1613 Rulemaking 08-06-024. View more information about the decision:



More information about the Act is located in CPUC Code section 2840.
Visit Public Utilities Code Section 2840-2845


Determining location bonus eligibility for AB 1613 facilities


PG&E has a list of substations that are eligible for a location bonus.
Visit Local Capacity Area Substation List (PDF)


These substations are located within Local Resource Adequacy (RA) areas, also known as Location Bonus areas. If you are seeking a location bonus, PG&E Energy Procurement Contract Management requires the following documentation:


  • Proof that the substation location resided in a Location Bonus area.
  • Evidence that it was located in the Location Bonus area during the contract year.
  • Verification that the AB 1613 generating facility was interconnected to the substation prior to commercial operation under AB 1613 PPA.

Updates to the substation list are expected. The updates are based on the annual adoption of the Local Resource Adequacy program requirements by the CPUC and the annual identification of substations within RA Areas as determined by CAISO.

PG&E is not responsible for inconsistencies between the Location Bonus areas, Local RA areas and the substations listed. Learn more about the Local Resource Adequacy areas by:



Contact us


Get answers if you have further questions. Send an email to: AB1613inquiries@pge.com. PG&E typically responds within two business days.


Frequently Asked Questions about Assembly Bill (AB)1613

How do I obtain an AB 1613 PPA?


Send an email indicating whether you need a 500 kW, 5 MW or 20 MW PPA to AB1613Inquiries@pge.com. PG&E will send a questionnaire requesting the information necessary to complete the PPA. When you return the completed questionnaire, PG&E will send you a completed PPA, which must be signed and returned to PG&E for execution. The date that PG&E executes the PPA will be its "effective date."

Does my project qualify for the 10 percent location bonus?


Your project is eligible if it meets both of the following conditions:

  • Your generator is interconnected within the area that California Independent System Operator (CAISO) has labeled as a Local Resource Adequacy area; and
  • The generator is located there during the year that your PPA is signed.

If both of these conditions are met, your monthly payment includes a 10 percent location bonus. The interconnection point is determined by the interconnection study for the project.


Will I still get my location bonus through the end of the contract, even if my area doesn’t have a local resource adequacy requirement, anymore?


Yes, your project will receive the 10 percent bonus for the contract term if the project is in a local Resource Adequacy area during the year in which the PPA was signed.


Is the price per kilowatt-hour fixed for the life of my PPA?


No, the price isn't fixed. Your monthly contract payment contains both a fixed price component and a variable price component.

  • The fixed price component is based on the Market Price Referent approved by the CPUC. These components do not increase during your contract term.
  • The variable price component, however, results from monthly gas prices multiplied by a fixed heat rate and escalating variable Operations and Maintenance (O&M) rates.

View the monthly variable pricing for AB 1613 facilities at the following Web page:


Visit Pricing Options for Qualifying Facilities & Eligible Combined Heat and Power Facilities


How is the term of my PPA decided?


The seller determines the length of the PPA, from one to 10 years, at the time the contract is executed.


When must deliveries start for the project?


The seller sets a date in for deliveries to begin in the PPA. For an existing CHP facility, this date can be no later than 24 months following the date that the PPA was executed. For a new CHP facility, deliveries must start no later than 60 months following the date that the PPA was executed.

How do I know if my project meets the CEC eligibility requirements for AB 1613 generation?


CEC must certify the project before it begins operating. The CEC website has details on how to obtain certification. Visit Order Instituting Rulemaking Implementation of the Waste Heat and Carbon Emissions Reduction Act. You can also refer to CHP guidelines. Download Guidelines for Certification of Combined Heat and Power Systems Pursuant to the Waste Heat and Carbon Emissions Reduction Act, Public Utilities Code, Section 2840 Et Seq (PDF)


Do I need any other certifications for my project?


Yes, unless the facility is owned by a public agency exempt from Federal Energy Regulatory Commission (FERC) jurisdiction under 16 USC §824(f), it must be considered a Qualifying Facility under Public Utilities Regulatory Policy Act ("PURPA").


What if CEC requirements change during my contract term?


The project must meet any current CEC eligibility requirements, which may be amended throughout the contract term.


What happens if a facility no longer meets CEC certification requirements while under contract?


If a facility is decertified after the Term Start Date and compliance under PURPA has been demonstrated, then PG&E will pay Short Run Avoided Cost ("SRAC") and payments for As-Delivered Capacity, as posted monthly pursuant to CPUC Decision 07-09-040 at the time of decertification. By accepting payment, the Seller agrees to replace the AB 1613 PPA with the "Standard Contract for Qualifying Facilities with a Power Rating that is Less than or Equal to 20 MW," which was adopted as part of the QF/CHP Settlement Agreement in D.10-12-035, for the remainder of the AB 1613 PPA term.


Must I identify a location for my project?


Yes, the location must be identified. Within 60 days of the effective date, you must also demonstrate site control, as defined in the AB 1613 PPA. If the project is a new facility, then updates on its site control status must be made before construction on the generating facility begins.


What kind of deliverability assessment do I need to be an AB 1613 seller?


Unless the seller obtains a waiver from the CPUC, sellers of AB 1613 who are interconnecting under PG&E’s "Wholesale Distribution Access Tariff" (WDAT) or the CAISO tariff must comply with requirements to provide resource adequacy. This includes obtaining full capacity delivery status under CAISO rules to receive full AB 1613 pricing.
A project is not required to provide full deliverability if it uses a different form of interconnection. However, future CPUC decisions may require deliverability assessments.


What is the contract price if projects do not provide Resource Adequacy and they are interconnecting under the WDAT or CAISO tariff?


Generators receive the PURPA energy price and as-available capacity price.

Under the QF/CHP Settlement, how do the AB 1613 contract and the PURPA PPA (for QFs 20 MW or less) differ?


The terms and conditions vary, but the biggest differences are the PURPA eligibility requirements and the pricing terms. The PURPA PPA is available for download. Carefully review the terms and conditions on both contracts before making your decision. Please see the Electric Procurement page.


What documentation is required for a location bonus?


If you are seeking a location bonus, PG&E Energy Procurement Contract Management requires the following documentation:

  • Proof that the substation location resided in a location bonus area
  • Evidence that it was located in the location bonus area during the contract year
  • Verification that the AB 1613 generating facility was interconnected to the substation prior to commercial operation under AB 1613 PPA

More resources

Wholesale electric power procurement

PG&E purchases wholesale electric energy and capacity from generators and suppliers.