Indexed REC-50: What are the consequences under the Indexed REC Contract for failure to meet the percentage requirement of the Minimum Equity Standard?

A Minimum Equity Standard of 10% will apply under the Indexed REC Contract to a Project selected through this RFP if the Date of First Operation is on or after December 15, 2022.

The remedies related to a failure to meet the percentage requirement of the Minimum Equity Standard (i.e., 10%) is described in Section 10.1.4 of the IPA’s 2022 long-term renewable resources procurement plan (the “Long-Term Plan”) as approved by the Illinois Commerce Commission in ICC Docket No. 22-0231, which is pasted below for your convenience. Further, please also note that Section 1-75(c-30) of the IPA Act provides the following: “……If the Agency concludes the entity has not met or maintained its minimum equity standards required under the applicable subparagraphs under subsection (c-10), the Agency shall deny the entity’s ability to participate in procurement programs in subsection (c), including by withholding approved vendor or designee status.”

As set forth in Section 6.4(d) of the Indexed REC Contract, “no other remedies are contemplated under the Indexed REC Contract for Seller’s failure to comply with the Minimum Equity Standard requirements”. As such, failure to meet the percentage requirement of the Minimum Equity Standard is not an event of default leading to contract termination or forfeiture of the performance assurance under the Indexed REC Contract.

As noted above, and for your convenience, Section 10.1.4 of the 2022 Long-Term Plan provides that:

“if the Agency determines that a Competitive Procurement Supplier has failed to comply with any of the requirements set forth by the Agency, or any contract provision set forth by the law, the Agency will notify that entity in writing within twenty-one days. At such time, the Agency may request within twenty-one days after the notice of noncompliance any additional reports, information and documentation that are reasonably necessary to determine program compliance. If the requested materials are not received within twenty-one days, the Agency will render a finding of noncompliance, and the appropriate violation status outlined below will apply.

Requests for an extension for more time to provide such additional information must be made prior to the twenty-one day deadline and will be considered on a case-by-case basis.

The Agency will impose consequences for violations by program participants, including but not limited to:

  1. Suspension of the entity’s ability to submit project applications to IPA programs or to participate in competitive procurements during the remainder of the delivery year.
  2. Repeated violations could potentially result in the Approved Vendor or Designee becoming suspended from the IPA’s programs for an entire delivery year. Competitive Procurement Suppliers could likewise be barred from participation in future competitive procurement events.”

Please see Section 6.4 of the Indexed REC Contract as well as the FAQs page for additional information on the MES including requirements, compliance plans, and waiver requests.