Committee reviews provisions for on-site power purchase agreements; no final action recorded

The committee heard counsel’s explanation and extensive questioning on a committee substitute for Senate Bill 763, which would add criteria for on-site power purchase agreements (PPAs) that govern rooftop or on-site generation designed to serve a retail customer at the same property.

Counsel summarized the substitute: a PPA’s quoted price must be less than the local utility’s cost per kilowatt-hour at the start of the agreement and for each year of the agreement; a PPA may not exceed five years (although it may be renewed); PPA energy quotes and subsequent agreements must include provisions for on-site storage sufficient to meet the property’s power needs for a minimum of 48 hours in the event of a utility outage; and a third party must inspect meters at the onset and at least once per year or every three years thereafter.

Committee members sought technical clarification about typical PPA term lengths and the bill’s definition of “public entity.” Counsel and sponsor Senator Flamingo explained the bill was intended to protect public entities — particularly schools — by limiting contract duration to five years so the public entity could revisit terms regularly. Senator Marion and others expressed concern that limiting PPA duration to five years could increase costs because many PPAs amortize installation costs over longer terms.

The sponsor said the bill’s aim is to ensure public entities understand the contract and do not end up paying more than utility rates. The committee did not adopt the substitute at this meeting; the sponsor said the bill will be laid over for further consideration at a subsequent committee meeting.

No vote to pass or report the bill was recorded in the transcript; discussion focused on definitions, term length, on-site storage requirements and whether the bill’s language should be clarified.