On July 7th, 2011, the PSB issued a revised Standard Offer Contract, making a number of changes to the standard offer contract that are largely designed to clarify the rights of the project developers (producers).
The most significant changes include the following:
- Tax credits are now explicitly excluded from “Other Products Related to Electric Generation” that are transferred to the SPEED Facilitator (and then to the distribution utilities) along with project energy, capacity and REC attributes. The change thus clarifies the understanding that project producers retain the rights to federal and state tax credits.
- A new milestone has been added, requiring Producers to file a petition for a Certificate of Public Good under 30 V.S.A. § 248 within one year of executing the contract. The purpose of this change is to ensure that projects in the Standard Offer queue are moving forward and, if not, allowing new projects to enter the queue.
- In the event of a default by the SPEED Facilitator, a presumption arises that the Producer should be relieved of the requirement that it only sell project power through the Standard Offer program.
- Producers may now request Board review of any decision by the SPEED Facilitator that “materially impacts Producer.”
- Producers must be given notice and an opportunity to be heard before the Board amends the Contract.
- Other changes designed to clarify Producer’s (and their lenders’) rights in the event of defaults and force majeure events.
- Producers are required to file an application for SPEED Certification (Board Rule 4.305) with the Board within 30 days after contract execution. This is largely a paperwork requirement.
- Producers may request the Board to permit the capacity of the project to exceed the amount specified in Attachment A of the Standard Offer contract (beyond the +/-5% allowance). The Board will address such requests on a case by case basis.
The Board’s Order provides that the revised contract will be used on a going forward basis for all new projects and can be adopted by existing producers at their discretion.
Some project developers are hopeful that, as they look to traditional lenders for project financing, the revised contract will provide a greater measure of certainty and clarity.
