PUC directs changes to model JTS PPAs, flags major nonnegotiable terms

The Colorado Public Utilities Commission on Feb. 25 directed staff and Public Service Company of Colorado to file model power purchase agreements (PPAs) for the Just Transition Solicitation (JTS) that reflect the commission's policy decisions on negotiability and protections for customers and developers.

Advisory staff led by Mr. Eaton recommended the commission adopt the company's revised PPA language for some items but explicitly make other provisions negotiable; commissioners approved a package of directives aimed at balancing IPP concerns with customer protections.

Advisors told the commission that section 2.2 of the renewable PPA (renewal/ROLO) had been revised by the company to lengthen notice periods and to add a right-of-first-refusal mechanism in reply comments, and staff recommended making the section nonnegotiable while directing the exact ROLO wording remain negotiable. "Advisors agree with the language Public Service put forth in reply for section 2.2," Mr. Eaton said, recommending that the commission direct section 2.2 be nonnegotiable and that section 19.5'the ROFO/ROLO details'be left for negotiation.

On developer reimbursement language, advisors recommended rejecting Public Service's proposed 1%-per-month reimbursement and adopting InterWest's proposed changes to section 5.2 to remove the 1% monthly reimbursement rate. "Advisors agree with IPP concerns: the company's proposed 1% reimbursement rate is unreasonable," the presentation stated, and commissioners approved directing the change.

Commissioners flagged compensable curtailments and force-majority clauses as issues requiring further attention. Advisors recommended that curtailment provisions in section 8.3 remain negotiable and cautioned against making those provisions nonnegotiable absent a fuller record; commissioners agreed to flag the issue for additional filings and to include concern language in the order.

Advisors also recommended the commission require the company to include in RFP materials a clear marking of nonnegotiable provisions, to use the reply-version model PPAs as the baseline for the RFP, and to direct parity in treatment between IPPs and company-owned projects for key risk items such as liquidated delay damages. "The RFP package must explain this distinction so that bidders are clear where they can and cannot submit red lines," Mr. Eaton said.

Commissioners asked staff to ensure that any new nondisclosure or negotiability items proposed in reply comments receive an opportunity for party feedback before finalizing nonnegotiable language. The commission characterized many of its decisions as directives to be reflected in the written order accompanying the JTS RFP.

Next steps: staff will draft an order that incorporates the commission's directives, require Public Service to submit model PPAs with nonnegotiable provisions highlighted, and proceed with the JTS RFP process consistent with the schedule adopted in prior decisions.