TITLE 39

Public Utilities and Carriers

CHAPTER 39-26.2

Distributed Generation Standard Contracts

SECTION 39-26.2-7



   § 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) above,

the electric-distribution company shall enter into a cost-reimbursement

agreement with such 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 such

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.



History of Section.

(P.L. 2011, ch. 129, § 1; P.L. 2011, ch. 143, § 1; P.L. 2013, ch.

167, § 2; P.L. 2013, ch. 202, § 2; P.L. 2014, ch. 200, § 4; P.L.

2014, ch. 216, § 4.)