(1)  Any qualifying facility is eligible to participate, under these rules, in arrangements for purchases and sales of electric power with electric utilities regulated by the Commission.

(2) Any qualifying facility in Montana that produces electric energy or capacity, or both, available for purchase by any public utility regulated by the commission, shall not be considered a public utility within the meaning of 69-3-101, MCA, and shall be exempt from regulation by the commission as a public utility, except insofar as these rules or any other commission order, tariff, requirement, or rule governing the activities of public utilities may affect the facility in its dealings with such regulated utilities. Nothing in these rules is to be construed to limit the full powers of regulation, supervision, and control of public utilities vested by law in the commission.

(3) Nothing in these rules shall exempt any qualifying facility from the applicable licensing or permit requirements which may be imposed on facilities by Montana laws and regulations governing water use, land use, community development and planning, zoning, air quality, environmental protection, or any other existing pertinent law or regulation administered by state agencies other than the commission.

(4) All purchases and sales of electric power between a utility and a qualifying facility that is not eligible for standard rates shall be accomplished according to the terms of a written contract negotiated between the parties and/or terms set by the Commission pursuant to a petition under 69-3-603, MCA. The utility and the qualifying facility must attempt to negotiate an agreement, and if no agreement can be reached, either the utility or the qualifying facility may file a petition with the Commission pursuant to 69-3-603, MCA, to set the terms and conditions of the contract.

(5) All purchases and sales of electric power between a utility and a qualifying facility that is eligible for standard rates shall be accomplished according to the terms of a written contract between the parties or in accordance with the applicable standard rate tariff provisions and any applicable standard power purchase agreement approved by the Commission.  The utility shall recompute avoided costs for standard rates following submission of its resource plan.

(6) All contracts between utilities and qualifying facilities shall specify:

(a) the nature of the purchases and sales;

(b) the applicable rate schedule or negotiated rates for the purchases and sales or the Commission-determined rates pursuant to 69-3-603, MCA;

(c) the amount and manner of payment of interconnection costs;

(d) the means for measurement of the energy or capacity purchased or sold by the utility;

(e) the method of payment by the utility for purchases, and the method of payment by the facility for utility sales;

(f) any installation and performance obligations;

(g) the services to be provided or discontinued by either party during system emergencies;

(h) the term of the contract;

(i) applicable operating safety and reliability standards with which the qualifying facility must comply; and

(j) appropriate insurance indemnity and liability provisions.

(7) All purchases and sales of electric power between a utility and a qualifying facility shall be compatible with the goal of the commission's integrated least-cost resource planning and acquisition act, 69-3-1201 through 69-3-1209, MCA.