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IPA Special Procurement Update 11/12/14

12 Nov 2014 2:35 PM | Anonymous

As you know, the state legislature passed a measure to authorize the IPA to spend $30M of the Renewable Energy Resource Fund (RERF) for a special DG Solar Procurement.  The IPA held several public workshops and published a draft procurement plan, soliciting comments at each stage.  On October 28th, the IPA submitted the final version for ICC consideration and final rulings by the ICC are due January 26, 2015.  ISEA was pleased to see many of our recommendations incorporated in this latest version.  (Click here to access draft plans and all comments filed to the IPA and ICC.)  Please note that this procurement is being developed at the same time as the Regular Procurement Plan, discussed in previous blogs.  This is a separate process with different targets and goals.


The final version of the Special Procurement Plan has been filed for consideration with the ICC.  Overall provisions include:


  • The IPA will hold a competitive procurement among aggregators offering 5 year contracts only for “new” Distributed Generation (DG). DG includes all systems <2,000kW and are installed behind the meter and less than 2 MW. Due to the “behind the meter” requirement, only Illinois systems will be eligible.
  • “New” means the system is energized on or after the approval of the plan (likely January 26, 2015).  Systems must be built within 1 year of the procurement with a potential 6 month contingency if project experiences delays. 
  • A standard capacity factor of 14.38% will be used in the bidding process to forecast the number of RECs per KW of installed solar.  For example, for bidding purposes, RECs for a 10kW system would be calculated:  (0.010MW x 14.38% x 8760 hours/year x 5 years = about 63 RECs.  Bidders would use this formula to convert bid system sizes(nameplate KW) into deliverable RECs. As all contracts will be for 5 years, RECs should be bid for the duration of the contract.
  • The procurement events will feature two bid categories – systems under 25 kW and systems over 25 kW. The IPA will strive to buy half of the RECs from each group.  Only projects in the <25kW system can include speculative projects.  Projects >25kW must be identified but not energized.  The IPA will create the ability to gather this information during the bid process.  
  • There will be 3 different procurements (see below) with a minimum bid amount of 500 RECs.  Bids will be accepted by aggregators or system owners as long as the minimums are met. Therefore larger commercial systems will be able to self-procure if so desired.
  •  Aggregators cannot exceed the maximum bid of 5,000 RECs for <25kW systems in any procurement periodAs stated previously, bids can be speculative in this portion of the Special Procurement.  However, speculative projects must be identified within 6 months (3 month contingency) of the procurement event.
  • All projects in the >25 category must be identified (i.e. site control, etc) in order to bid.
  • Aggregators can bid in a different REC price for each project, but not different REC prices within the project, and for commercial systems you have to bid all the RECs from the system.
  • Eligible systems must be installed by a Qualified Person. This definition differs slightly from the current ICC definition of “Qualified Person”.  Aggregators and/or projects will need to verify that the system was installed accordingly.  If not, the project will not be eligible to sell RECs.  (see definition below)  As this was defined specifically by the General Assembly in Section 1-56(i) the ISEA was unable to alter these terms
  • Systems must be registered with PJM GATS or MISO M-RETS where all RECs will be tracked and transferred.  All systems will be required to have a utility-grade meter as part of their installation.
  • Aggregators will be required to meet deposit requirements of $16/REC for speculative projects and $8/REC for identified projects.  Deposit adjustments will be made as speculative projects are identified.
  • Commercial projects can substitute projects if they meet the same criteria of the project that won the award.
  • Bidders might only win contracts for some of their projects.  Deposits will be adjusted accordingly.
  • There will be 3 procurement events with a possible 4th contingent upon need.  

June 2015 –

  •  Procurement Budget:  $5 M
  • Maximum bid of 5,000 RECs for residential.
  • Bids for commercial but systems can’t be over 500 kW

November 2015-

  • Procurement Budget:  $10 M
  • Maximum bid of 5,000 RECs for residential.
  • No maximum bid for commercial and systems can be up to 2 MW now 

March 2016

  • Procurement Budget:  $15 M
  • Maximum bid of 5,000 RECs for residential.
  • No maximum bid for commercial and systems can be up to 2 MW now 

January 2017-  Contingency for any remaining money.

 

ISEA objected to the following issues in the final 2015 Special Procurement Plan:

  1. Systems between 25kW – 2,000 kW should be broken into smaller sub-categories to ensure that the financial incentives to develop varying sizes work appropriately.  ISEA recommended 25kW – 399kW and 400kW – 2,000 kW.  This has not been supported to date but ISEA provided evidence that mature REC markets have been making these adjustments based on development results.  This is a vast economic opportunity for system owners, developers and installers. 
  2. Systems <25kW should utilize a 3rd party administrator as opposed to a multipleaggregators which could cause a great deal of confusion for system owners. The easier this process is for homeowners and small business owners, the more likely they are to participate.  We do not want complex competition to cause market confusion and potential delays.
  3. Aggregator Credit Requirements should be reduced to:  $10/REC for speculative bids, $5/REC for identified projects to open the field of potential bidders for REC procurement.
  4. ICC DG Certified Installers list needs to include additional details so that it is transparent if an installer qualifies for the Special Procurement.   NOTE:  This is an important distinction that all solar installers should investigate further and take the necessary steps to ensure they will qualify under the new guidelines.  This requirement is limited to just RECs from the Special Procurement and does not impact systems that do not seek to sell their RECs or for systems that intend to participate in the Regular Procurement.


 Qualified Person – definition per Section 156(i)(1)    

For the purposes of this paragraph (1), "qualified


person" means a person who performs installations of photovoltaics, including, but not limited to, distributed photovoltaic generation, and who: (A) has completed an apprenticeship as a journeyman electrician from a United States Department of Labor registered electrical apprenticeship and training program and received a certification of satisfactory completion; or (B) does not currently meet the criteria under clause (A) of this paragraph (1), but is enrolled in a United States Department of Labor registered electrical apprenticeship program, provided that the person is directly supervised by a person who meets the criteria under clause (A) of this paragraph (1); or (C) has obtained one of the following credentials in addition to attesting to satisfactory completion of at least 5 years or 8,000 hours of documented hands-on electrical experience: (i) a North American Board of Certified Energy Practitioners (NABCEP) Installer Certificate for Solar PV; (ii) an Underwriters Laboratories (UL) PV Systems Installer Certificate; (iii) an Electronics Technicians Association, International (ETAI) Level 3 PV Installer Certificate; or (iv) an Associate in Applied Science degree from an Illinois Community College Board approved community college program in renewable energy or a distributed generation technology.

For the purposes of this paragraph (1), "directly


supervised" means that there is a qualified person who meets the qualifications under clause (A) of this paragraph (1) and who is available for supervision and consultation regarding the work performed by persons under clause (B) of this paragraph (1), including a final inspection of the installation work that has been directly supervised to ensure safety and conformity with applicable codes.

For the purposes of this paragraph (1), "install"


means the major activities and actions required to connect, in accordance with applicable building and electrical codes, the conductors, connectors, and all associated fittings, devices, power outlets, or apparatuses mounted at the premises that are directly involved in delivering energy to the premises' electrical wiring from the photovoltaics, including, but not limited to, to distributed photovoltaic generation.

 

 

Objections can be found on the ICC website. The ISEA intends to file Responses to the Objections (due 11/20) and likely Replies to the Responses (due 12/2)



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