Title 39
Public Utilities and Carriers

Chapter 26.1
Long-Term Contracting Standard for Renewable Energy

§ 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 § 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 § 39-26.1-7 or § 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 § 39-26-4 or pursuant to any other provision of the law.

(2) Except as provided in §§ 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.