The financial and timeline risks and concerns discussed in this docket include:
Financial risks and concerns:
- Qualifying facilities must pay the full installed cost of any facilities and metering in excess of what would have been required if they were not a qualifying facility. These payments can be collected as a lump sum, a monthly charge, or a combination, potentially causing significant upfront or ongoing financial impact to the facility owner
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- There is a $12.00 per month service charge for meter reading, accounting, and billing services, adding to operational costs
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- Qualifying facilities are responsible for any tax expenses incurred as a result of contributions-in-aid or other payments made to the company, increasing potential financial liabilities
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- The company will deduct any amounts owed by the qualifying facility from amounts due for energy delivered, and if the net is negative, the facility must pay the company. Small balances (under $1.00) are carried over, but this could complicate cash flow management for smaller generators
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Timeline risks and concerns:
- The company may require the qualifying facility to interrupt or reduce energy deliveries for maintenance, emergencies, forced outages, operating conditions, or prudent electrical practices. This introduces uncertainty about when and how much energy the qualifying facility can deliver and be paid for
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- The contract period is set at not less than one year, but rates and service terms are subject to periodic updates and changes by the company and the Mississippi Public Service Commission, creating regulatory risk regarding future rate changes or contract terms
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- Once a payment calculation option is chosen (all-hours rate or peak/off-peak rates), it cannot be changed during the contract term, limiting the facility's flexibility to adapt to changing market conditions or operational realities
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Overall, the primary risks are financial exposure to variable charges, potential interruptions in service or payments due to utility operations, and regulatory uncertainty over contract length and rate adjustments.