§ 39-26.1-3. Long-term contract standard.
(a) Beginning on or before July 1, 2010, each electric distribution company shall be required
to annually solicit proposals from renewable energy developers and, provided commercially
reasonable proposals have been received, enter into long-term contracts with terms
of up to fifteen (15) years for the purchase of capacity, energy, and attributes from
newly developed renewable energy resources. Subject to commission approval, the electric
distribution company may enter into contracts for term lengths longer than fifteen
(15) years. Notwithstanding any other provisions of this chapter, on or before August
15, 2009, the electric distribution company shall solicit proposals for one newly
developed renewable energy resources project as required in §â€‚39-26.1-7. Proposals for the sale of output from an offshore-wind project received under the
provisions of this section shall be diligently and fully considered without prejudice,
regardless of the status of any proceedings under §â€‚39-26.1-7 or §â€‚39-26.1-8.
(b) The timetable and method for solicitation and execution of such contracts shall be
proposed by the electric distribution company, and shall be subject to review and
approval by the commission prior to issuance by the company. The electric distribution
company shall, subject to review and approval of the commission, select a reasonable
method of soliciting proposals from renewable energy developers, which shall include,
at a minimum, an annual public solicitation, but may also include individual negotiations.
The solicitation process shall permit a reasonable amount of negotiating discretion
for the parties to engage in commercially reasonable, arms-length negotiations over
final contract terms. Each long-term contract entered into pursuant to this section
shall contain a condition that it shall not be effective without commission review
and approval. The electric distribution company shall file such contract, along with
a justification for its decision, within a reasonable time after it has executed the
contract following a solicitation or negotiation. The commission shall hold public
hearings to review the contract within forty-five (45) days of the filing and issue
a written order approving or rejecting the contract within sixty (60) days of the
filing; in rejecting a contract, the commission may advise the parties of the reason
for the contract being rejected and direct the parties to attempt to address the reasons
for rejection in a revised contract within a specified period not to exceed ninety
(90) days. The commission shall approve the contract if it determines that: (1) The
contract is commercially reasonable; (2) The requirements for the annual solicitation
have been met; and (3) The contract is consistent with the purposes of this chapter.
A report on each solicitation shall be filed with the commission each year within
a reasonable time after decisions are made by the electric distribution company regarding
the solicitation results, even if no contracts are executed following the solicitation.
(c)(1) No electric distribution company shall be obligated to enter into long-term contracts
for newly developed renewable energy resources on terms that the electric distribution
company reasonably believes to be commercially unreasonable; provided, however, if
there is a dispute about whether these terms are commercially unreasonable, the commission
shall make the final determination after an evidentiary hearing. The electric distribution
company shall not be obligated to enter into long-term contracts pursuant to this
section that would, in the aggregate, exceed the minimum long-term contract capacity,
but may do so voluntarily subject to commission approval. As long as the electric
distribution company has entered into long-term contracts in compliance with this
section, the electric distribution company shall not be required by regulation or
order to enter into power-purchase contracts with renewable-generation projects for
power, renewable energy certificates, or any other attributes with terms of more than
three (3) years in meeting its applicable, annual-renewable-portfolio standard requirements
set forth in §â€‚39-26-4 or pursuant to any other provision of the law.
(2) Except as provided in §§â€‚39-26.1-7 and 39-26.1-8, an electric distribution company shall not be required to enter into long-term contracts
for newly developed renewable energy resources that exceed the following five (5)
year phased schedule:
By December 30, 2010: Twenty-five percent (25%) of the minimum long-term contract
capacity;
By December 30, 2011: Fifty percent (50%) of the minimum long-term contract capacity;
By December 30, 2012: Seventy-five percent (75%) of the minimum long-term contract
capacity;
After December 30, 2013: One hundred percent (100%) of the minimum long-term contract
capacity subject to subsection (f) of this section.
(d) Compliance with the long-term contract standard shall be demonstrated through procurement
pursuant to the provisions of a long-term contract of energy, capacity, and attributes
reflected in NE-GIS certificates relating to generating units certified by the commission
as using newly developed renewable energy resources, as evidenced by reports issued
by the NE-GIS administrator and the terms of the contract; provided, however, that
the NE-GIS certificates were procured pursuant to the provisions of a long-term contract.
The electric distribution company also may purchase other attributes from the generator
as part of the long-term contract.
(e) After the adoption of the rules and regulations promulgated by the commission pursuant
to this chapter, an electric distribution company may, at its sole election, immediately,
and from time to time, procure additional, commercially reasonable long-term contracts
for newly developed renewable energy resources on an earlier timetable or above the
minimum long-term contract capacity, subject to commission approval.
(f) At least once per year beginning in 2014, the electric distribution company shall
conduct solicitations until one hundred percent (100%) of the minimum long-term contract
capacity is met; provided, however, that no contracts shall be awarded unless the
pricing under such contract(s) is below the forecasted market price of energy and
renewable energy certificates over the term of the proposed contract, using industry
standard forecasting methodologies as have been used to evaluate pricing in the past
solicitation processes reviewed by the commission under this section. In such solicitations,
the electric distribution company may elect not to acquire capacity, but shall acquire
all environmental attributes and energy.