52 Pa. Code § 69.2904 - Contracts for the purchase of SRECs by EDCs
(a)
Standardized contracts.
EDCs should employ standardized contracts for their purchase of SRECs from
large-scale solar projects and small-scale solar projects. The standardized
contract for small-scale solar projects should be simple, understandable and
provide for the option to purchase SRECs from solar aggregators. Standardized
contracts for the long-term procurement of SRECs should be from 5 to 20 years
in length.
(b)
Contracts
with solar aggregators. The Commission finds it reasonable and
efficient, and therefore encourages EDCs to execute a master agreement with a
solar aggregator for the purchase of SRECs from various sources that
establishes a prevailing SREC market price at a particular point in time
through letter agreements that incorporate the terms of the master
agreement.
(c)
Performance
guarantees, security and other contract terms. While EDCs may require
the posting of bid security in an RFP for large-scale solar projects, bid
security for small-scale solar projects is not necessary due to the manner in
which the SREC market price for these projects is established. In addition,
small-scale solar projects under 15kW in nameplate capacity may use estimates
to report SREC generation to the PJM-GATS system, as authorized under the AEPS
Act, and should not be required to provide security relating to project
completion or performance. Small-scale solar project contracts for projects at
or above 15kW in nameplate capacity, or from a solar aggregator selling the EDC
SRECs from projects 15kW or more in nameplate capacity, may contain a security
deposit, refundable upon completion of project construction and certification
of initial performance, as well as a performance guarantee refundable over the
performance period or at the end of the contract. These provisions may be
included to ensure that the aggregated solar projects supporting the SRECs are
actually constructed and perform as designed. Security deposits for projects
15kW or more in nameplate capacity, or aggregated projects 15kW or more in
nameplate capacity, may be converted, upon reasonable advance notice by the EDC
to the impacted parties, from a refund to a performance guarantee upon project
completion and certification. In addition, small-scale solar project SREC
contracts may provide for EDC remote monitoring of solar installations.
Contracts between EDCs and others for the purchase of SRECs from small-scale
solar projects may also provide for a reasonable allocation of the risk of a
project failing due to force majeure-type events. EDCs may establish reasonable
financial qualifications for solar aggregators from whom they purchase
SRECs.
(d)
Contracts on
behalf of residential customers. EDCs are encouraged to contract for
SRECs with solar aggregators that obtain SRECs from residential owners of
small-scale solar projects. These projects can provide a beneficial way for
those customers to cope with the volatility of electricity prices.
(e)
Stakeholder working
group. An EDC standardized contract and other related documents, for
the purchase of SRECs from large-scale solar projects and small-scale solar
projects should be posted on the Commission's web site and periodically updated
by means of input from a stakeholder working group to ensure that these
contracts reflect the most recent developments in Pennsylvania law and energy
policy.
(f)
Customer
education. An EDC is encouraged to educate its retail customers of the
opportunity to sell SRECs under the large-scale solar project RFP solicitation
and the small-scale solar program in support of local development of solar
resources.
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