Indexed REC-26: What is the definition of a strike price? How is the strike price used for payment under the Indexed REC Contract?

Please note that the Spring 2022 Indexed REC RFP will seek to procure renewable energy credits from a project only. The Indexed REC Contract does not include delivery or payment for energy or any other product related to the project.

As defined in the IPA Act, “Strike price” means a contract price for energy and renewable energy credits from a project. The strike price ($/MWh) in the Bid and the Index Price ($/MWh) that corresponds to the Index Hub provided in the bid form, will be used for purposes of calculating the REC Monthly Price ($/MWh) under the Indexed REC Contract.

The REC Monthly Price applicable to the Project with respect to a month shall be calculated as follows. First, for each hour, the energy generation (MWh) for the Project will be multiplied by the difference found by subtracting the Strike Price ($/MWh) from the Index Price ($/MWh). Next, the REC Monthly Price will be calculated as the sum of all those products for all the hours of the month divided by the total energy generation (MWh) for the month for the Project. The REC Monthly Price may be either positive or negative. Payment shall be made from Seller to Buyer if the REC Monthly Price is positive and payment shall be made from Buyer to Seller if the REC Monthly Price is negative.

Please review the Indexed REC Contract for additional information: