Announcements


Indexed REC-56: Can the RFP Awarded Annual Quantity be changed or updated under the Indexed REC Contract?

The evaluation of the Bids, which is fully described in Paragraph I.2.11 of the Indexed REC RFP Rules, implies that the number of RECs from the highest-priced Project selected may be less than the full quantity (a “partial award”). For this reason, a Bidder must specify, in addition to the annual full quantity that the Seller is offering to deliver under the Indexed REC Contract, an annual quantity below which the Seller is no longer willing to accept an award under this RFP. Accordingly, a “Bid” for a Project has three (3) elements: (i) a strike price ($/MWh); (ii) a full quantity, which is an annual quantity of RECs that the Seller is offering to deliver under the terms of the Indexed REC Contract; and (iii) a minimum quantity, which is an annual minimum quantity of RECs that the Seller is willing to accept as a partial award. The Seller commits to accept any award with a quantity not less than the minimum quantity and not more than the full quantity at the price specified in the Bid.

The annual quantity that you bid and win in the RFP will be the “RFP Awarded Annual Quantity” in each of the Indexed REC Contracts. The Annual Quantity in a contract will reflect the portion of the RFP Awarded Annual Quantity allocated to such contract. Following bid submission, the RFP Awarded Annual Quantity may not be amended.

There are several flexibilities related to delivery under the Indexed REC Contract; however, including, but not limited to:

  • The annual quantity in the Indexed REC Contract related to a utility-scale solar project or a brownfield site photovoltaic project is subject to a degradation factor. With respect to utility-scale solar projects and brownfield site photovoltaic projects, the Delivery Year Requirement for each Delivery Year will feature a degradation factor of 0.5% annually. The Delivery Year Requirement calculation is set forth in Section 1.30 of the Indexed REC Contract. More information on the Delivery Year Requirement calculation is provided in FAQ-Indexed REC-32.
  • Seller must deliver a quantity of RECs that meets the Delivery Year Requirement in each deliver year, the failure to meet any Delivery Year Requirement through the first full Delivery Year (i.e., first full June through May period as well as any prior stub period) shall not constitute a Shortfall Amount.
  • As described in Section 9.2 it is an event of default under the Indexed REC Contract if: (i) Seller fails to meet the Delivery Year Requirement for three (3) or more years, and (ii) the Shortfall Amounts (as the term is defined in the Indexed REC Contract) cumulatively equals or exceeds the annual quantity.
  • Any RECs generated by the Project in excess of the Delivery Year Requirement for any Delivery Year (“Excess RECs”) shall remain the exclusive property of Seller, to be utilized in Seller’s sole discretion. Such excess RECs may be transferred for the sole purpose of reducing Shortfall Amounts incurred in one or more prior Delivery Years subject to conditions under Section 4.1(k). Such RECs are not eligible for payment either by Buyer to Seller or by Seller to Buyer; for avoidance of doubt, such RECs are valued at $0 under the Indexed REC Contract.
  • There is no prohibition to Project size changes during the term of the Indexed REC Contract.
  • Additionally, please note that under the Indexed REC Contract, the Seller will specify a Project Committed Percentage. The Project Committed Percentage means the percentage of the Project’s Actual Production to be used for purposes of the Standing Order. The Seller will provide the Project Committed Percentage prior to the establishment of the standing order and after that point this input cannot be modified. Please review Section 2.3(b) of the Indexed REC Contract for information regarding the Project Committed Percentage and the Standing Order.