§ 39-26.2-7. Standard contract — Form and provisions.
The following process shall be implemented to establish the non-price terms and conditions
of the standard contract:
(1) A working group ("contract working group�) shall be established and supervised by
the board, consisting of the following members: (i) The director of the office of
energy resources; (ii) A designee from the division of public utilities and carriers;
(iii) Two (2) designees of the electric distribution company; (iv) Two (2) individuals
designated by the office of energy resources who are experienced developers of renewable-generation
projects; (v) One individual designated by the office of energy resources who represents
a customer of the electric distribution company; and (vi) A lawyer designated by the
office of energy resources who has at least three (3) years of experience in negotiating
and/or developing power-purchase agreements. With respect to the lawyer designated
in (vi), the electric distribution company shall enter into a cost-reimbursement agreement
with the lawyer, to compensate the lawyer for the time spent serving in the contract
working group at the reasonable hourly rate negotiated by the office of energy resources.
The costs incurred by the electric distribution company under the reimbursement agreement
shall be recovered in rates by the electric distribution company in the year incurred
or the year following incurrence through an appropriate filing with the commission.
The contract working group shall be an advisory group that is not to be considered
to be an agency for purposes of the administrative procedures act or any other laws
pertaining to public bodies.
(2) The contract working group shall work in good faith to develop standard contracts
that would be applicable for various technologies for both small and large distributed-generation
projects. The standard contracts should balance the need for the project to obtain
financing against the need for the distribution company to protect itself and its
distribution customers against unreasonable risks. The standard contract should be
developed from contracting terms typically utilized in the wholesale power industry,
taking into account the size of each project and the technology. The standard contracts
shall provide for the purchase of energy, capacity, renewable energy certificates,
and all other environmental attributes and market products that are available, or
may become available from the distributed-generation facility. However, the electric
distribution company shall retain the right to separate out pricing for each market
product under the contracts for administrative and accounting purposes to avoid any
detrimental accounting effects or for administrative convenience, provided that such
accounting, as specified in the contract, does not affect the price and financial
benefits to the seller as a seller of a bundled product. The standard contract also
shall:
(i) Hold the distributed-generation facility owner liable for the cost of interconnection
from the electric-distribution facility to the interconnect point with the distribution
system, and for any upgrades to the existing electric-distribution system that may
be required by the electric distribution company. However, a distributed-generation
facility owner may appeal to the commission to reduce any required system upgrade
costs to the extent such upgrades can be shown to benefit other customers of the electric
distribution company and the balance of such costs shall be included in rates by the
electric distribution company for recovery in the year incurred or the year following
incurrence;
(ii) Require the distributed-generation facility owner to make a performance guarantee
deposit to the electric distribution company of fifteen dollars ($15.00) for small
distributed-generation projects or twenty-five dollars ($25.00) for large distributed-generation
projects for every renewable energy certificate estimated to be generated per year
under the contract, but at least five hundred dollars ($500), and not more than seventy-five
thousand dollars ($75,000), paid at the time of contract execution;
(iii) Require the electric distribution company to refund the performance-guarantee deposit
on a pro-rated basis of renewable energy credits actually delivered by the distributed-generation
facility over the course of the first year of the project's operation, paid quarterly;
(iv) Provide that if the distributed-generation facility has not generated ninety percent
(90%) of the output proposed in its enrollment application within eighteen (18) months
after execution of the contract, the contract shall be terminated and the performance
guarantee shall be forfeited. An eligible, small-scale, hydropower-distributed-generation
facility that has not generated ninety percent (90%) of the output proposed in its
enrollment application within forty-eight (48) months after execution of the contract
shall result in the contract being terminated and the performance guarantee being
forfeited. An eligible anaerobic-digestion-distributed-generation facility that has
not generated ninety percent (90%) of the output proposed in its enrollment application
within thirty-six (36) months after execution of the contract shall result in the
contract being terminated and the performance guarantee being forfeited. Any forfeited
performance-guarantee deposits shall be credited to all distribution customers in
rates and not retained by the electric distribution company;
(v) Provide for flexible payment schedules that may be negotiated between the buyer and
seller, but shall be no longer than quarterly if an agreement cannot be reached;
(vi) Require that an electric meter that conforms with standard industry norms be installed
to measure the electrical energy output of the distributed-generation facility, and
require a system or procedure by which the distributed-generation facility owner shall
demonstrate creation of renewable energy credits, in a manner recognized and accounted
for by the GIS; such demonstration of renewable energy credit creation to be at the
distributed-generation facility owner's expense. The electric distribution company
may, at its discretion, offer to provide such a renewable energy credit measurement
and accounting system or procedure to the distributed-generation facility owner, and
the distributed-generation facility owner may, at its discretion, use the electric
distribution company's program, or use that of an independent third party, approved
by the commission, and the costs of the measurement and accounting are paid for by
the distributed-generation facility owner.
(vii) All distributed-generation projects that have executed contracts will be required
to submit quarterly reports on the progress of the project to the distribution company
and the office of energy resources. Failure to submit these quarterly progress reports
may result in the termination of the contract.
(3) If the contract working group reaches agreement on the terms of standard contracts,
the board shall file the contracts with the commission for approval. If there are
any disagreements, they shall be identified to the commission. The commission shall
review the standard contracts for conformance with the standards set forth in subsection
(2). Should there be any disputes, the commission shall issue an order resolving them.
To the extent the commission needs expert assistance to resolve any disagreements
noted in the filing, the commission is authorized to hire a consultant to assist it
in the proceedings, the costs of which shall be recovered from electric distribution
customers pursuant to a uniform factor established by the commission in rates for
recovery by the electric distribution company in the year incurred or the year following
incurrence, as requested through a filing by the electric distribution company. The
commission shall issue an order approving standard forms of contract within sixty
(60) days of the filing.