The IPA Letter of Credit must be in an amount of $8 times the number of RECs that the Bidder can win across all systems for the five (5) Delivery Years under the applicable supplier contracts.
For existing systems, you multiply:
- the annual volume of RECs for that system (which can be found in the Bid Form provided with the Part 1 Notification);
- by $8/REC;
- by 5 years (for years 1 through 5 of the delivery term).
For new systems, you:
- multiply the annual volume of RECs for that system (which can be found in the Bid Form provided with the Part 1 Notification) by $8/REC and by 4 years (for years 2 through 5 of the delivery term);
- to this total, you add the sum of the first year volumes times $8/REC.
For example, if you plan to bid on two 500 kW systems as follows:
|System||Technology||Size (kW)||New or Existing?||Annual Volume (RECs)||First Year Volume1||Collateral Requirement (years 2-5)||Collateral Requirement(First Year)||Total Collateral Requirement|
|System 1||Solar||500.00||New||701||100||= 701 x 4 x 8 = $22,432||= 100 x 8 = $800||= 22,432 + 800 = $23,232|
|System 2||Wind||500.00||Existing||630||630||= 630 x 4 x 8 = $20,160||= 630 x 8 = $5,040||= 20,160 + 5,040 = $25,200|
|Total Required IPA Letter of Credit Amount:||$48,432|
1 Please note that the first year volume of RECs for new systems cannot exceed the annual volume of RECs for that system.