Update on Program Opening Date and REC Contract Development Process

The opening of the Adjustable Block Program for project applications will be postponed from January 15, 2019 to January 30, 2019. This postponement is to allow for additional time to refine the standard REC contract between Approved Vendors and the utilities.

 

A draft REC contract for the Program was released on December 7, 2018. Following two rounds of comments from stakeholders on that draft REC contract, as well as a webinar conducted on December 28, 2018, the Illinois Power Agency has now determined that the Program will benefit from the publication of a second draft REC contract followed by a stakeholder comment period focused on the revisions between the two drafts, prior to issuing a final version of the REC contract.  Several issues raised by stakeholders in comments, and during the webinar, on the first draft of the contract required careful deliberation by the Agency, the Program Administrator, the three involved electric utilities, and the Staff of the Illinois Commerce Commission, in order to calibrate the interests of the contractual parties and the requirements of the Program as directed by the Illinois General Assembly through the enactment of Public Act 99-0906, and the Illinois Commerce Commission through the approval of the Long-Term Renewable Resources Procurement Plan.  The Agency has considered the benefits and drawbacks of a minor delay and believes that an additional round of comments will ensure that any unintended consequences of new provisions and wordings in the second draft contract are identified and addressed prior to finalizing the contract.

 

As a result of this modification to the contract development process, the Agency is postponing the opening of the Program to project applications for a short period of time – to January 30, 2019.  The Agency appreciates that stakeholders have anticipated and planned for the projected January 15, 2019 application opening date since the Agency announced it in August of 2018.  However, it is crucial that the provisions of the REC delivery contract, which will govern 15-year relationships between Approved Vendors and utilities, accommodate the legitimate needs of the solar industry.  Additionally, the majority of stakeholder comment has favored a short extension of the Program’s application opening date to allow for further stakeholder feedback.  The short delay in the project application opening date will also allow solar developers additional time to consider the distributed generation installation contract requirements (which are currently under development and will be finalized during January) and to prepare and complete disclosure forms.

 

The Agency through the Program Administrator (in consultation with the utilities and the Staff of the Illinois Commerce Commission) is setting the following schedule for the remainder of the REC contract development process and the opening of the Adjustable Block Program to project applications:

 

  • Friday, January 11, 2019: Second Draft REC Contract will be released
  • Friday, January 18, 2019: Stakeholder comments on Second Draft REC Contract due
  • Monday, January 28, 2019: Final REC Contract will be released
  • Wednesday, January 30, 2019: Adjustable Block Program will open for project applications
  • Wednesday, February 13, 2019: Deadline for project applications/batches to be submitted in order to qualify for any required lottery in a Group/category combination

 

In response to stakeholder comment provided on December 19, 2018 and December 31, 2018, the Second Draft REC Contract to be released on January 11 will address the following key areas of concern; among others, these include:

 

  • Allowing for assignment at the Product Order or Transaction (i.e. batch) level; facilitating limited assignment of the REC contract to financing parties that are not Approved Vendors; limiting Buyer’s rights to deny assignment
  • Allowing for systems already energized at the time of contract execution to avoid posting 5% collateral and instead immediately exercise the option to have 5% of contract value held back as collateral
  • Clarifying calculation of the three-year rolling average for evaluating REC delivery performance
  • Adding additional flexibility on final system size compared to proposed system size
  • Clarifications regarding community solar projects: process for subscription reporting, flexibility on meeting full subscription levels, and ownership of RECs from unsubscribed shares of project
  • Additional corrections and editorial clarifications

 

The Second Draft REC Contract will reflect the consensus of the IPA, Program Administrator, Procurement Administrator, utilities, and ICC Staff in considering proposals contained in stakeholder comments. To the extent that any such proposals are not included in the Second Draft REC Contract, it should be understood that those comments were carefully considered, but not adopted.