A.Procurement Sectors and Aggregate Target Amounts. The Commission shall administer procurement processes in accordance with this Chapter for, in the aggregate, 125 megawatts of commercial or institutional and 250 megawatts of shared distributed generation resources. B. Procurement Rounds, Targets, and Schedule. The Commission shall conduct five procurement rounds for each of the two resource sectors. The target amount to be procured in each round shall be one-fifth (20%) of the aggregate target amount for each sector. Pursuant to the initial procurement round (Block 1), bids shall be accepted for thirty (30) calendar days beginning on or before July 1, 2020. Each subsequent procurement round (Blocks 2-5) shall be conducted sequentially, immediately following completion of the prior block.C. Procurement Announcement. The Commission shall initiate each procurement round by issuing a procurement announcement, which shall:(1) establish the schedule and process for the procurement block, including the bid date or time period during which bids may be submitted;(2) establish the requirements, process and schedule for qualification of bidders and projects intending to submit an offer in the procurement round;(3) establish the standards by which the Commission will determine whether the procurement round has a sufficient number of unique and qualified bidders and is sufficiently competitive;(4) establish the amount of any bidding fee and financial security requirements;(5) establish bid evaluation and selection criteria;(6) describe any attribute-based incentives and disincentives offered in the procurement round;(7) provide the applicable block base rate and any block incentive rates;(8) establish the method(s) by which a bidder can demonstrate the capacity to make a financial assurance deposit at the time a contract is signed; (9) provide the standard contract; and(10) provide other information relevant to the procurement round.D.Qualification. Prior to the bid offer rate submission date or period for each procurement round, the Commission shall qualify bidders and projects. Only bidders and projects that meet the minimum requirements of this Chapter may submit bids in the corresponding procurement round. The minimum requirements for qualification must be sufficiently demonstrated and documented by a bidder pursuant to the qualification process conducted by the Commission.
The Commission will conduct the qualification process in accordance with the procurement announcement and will complete the qualification process no less than five business days prior to the bid offer rate submission date or period for the procurement round. Qualification of a bidder or project by the Commission is valid only for that procurement round. A project that is qualified by the Commission in a procurement round may not automatically carry forward the qualification to any subsequent procurement round.
The minimum requirements for qualification include:
1. Demonstration of site control;2. A fully executed interconnection service agreement with an investor-owned transmission and distribution utility;3. Demonstration that all required federal, state and local approvals and non ministerial permits for the project have been obtained. For the purposes of this paragraph, "nonministerial permit" means a permit for which one or more officials consider various factors and exercise discretion in deciding whether to issue or deny the permit;4. The capacity to make a financial assurance deposit at the time a contract is signed;5. For a commercial or institutional distributed generation resources procurement, if a participating commercial or institutional customer is not the party making the bid, an agreement from a customer that would receive bill credits associated with the project;6. For a shared distributed generation resources procurement, demonstration of experience fulfilling the obligations to subscribers of shared distributed generation resources.7. Demonstration of compliance with any other requirements of this Chapter that the Commission determines to be applicable to qualification.E.Standard contract. At the time the procurement announcement is issued for a procurement round, the Commission shall make the standard contract or contracts applicable for that procurement available. The standard contract shall be substantially similar to the applicable form included as Attachment A to this Chapter. The standard contract shall be developed in consultation with the standard buyer(s). The standard contract shall include provisions that commit the standard buyer and project sponsor to commercially reasonable behavior and shall establish milestones for projects. The standard contract shall also include an interconnection fee list and schedule to ensure that a project can proceed to commercial operation on a reasonable time line. F.Milestones . A project must comply with the milestones contained in the applicable standard contract. At a minimum, the milestones must include a requirement that a project be commercially operable within 18 months of being awarded a contract. The Commission may grant an extension for failure to meet a milestone for good cause. If a project fails to meet a milestone, and an extension is not granted, the project sponsor is in default and the contract shall be cancelled. Any capacity associated with a cancelled project shall be added to the currently open procurement block or, if none is open, the capacity shall be added to the next procurement block. If a cancellation occurs after the end of the Block 5 procurement, Block 5 shall be reopened to procure the capacity amount associated with the cancelled contract.G.Bidding Fees . The Commission may require bidders to pay a reasonable and non-refundable bidding fee to defray the Commission's administrative costs. The bidding fee, which shall not exceed $5 per kW of the project's nameplate capacity, or $12,500 per project, shall be set forth in the procurement announcement for the applicable procurement round and shall be provided by bidders at the time their bid is submitted or as otherwise required by the procurement announcement. H.Ensuring competition. In the procurement announcement for each procurement round, the Commission shall set forth standards by which it will evaluate whether the solicitation is sufficiently competitive. If the Commission concludes that a solicitation is not sufficiently competitive, the Commission may procure an amount that is less than the procurement target, including not procuring any amounts in the round. To the extent the amount procured is less than the target for a given round, the difference shall be procured in subsequent procurement rounds. If an insufficient number of unique bidders or projects is qualified for a procurement round, as determined by the Commission, the Commission may delay or cancel the procurement.
I.Bid evaluation and selection. An offer, including the proposed distributed generation resource and bid offer rate, submitted in response to a procurement announcement is firm and binding upon the bidder. Following a review of bids received in each of the procurement rounds pursuant to this Chapter, the Commission shall select one or more winning bids that, in the aggregate, meet the target procurement quantity for the block, subject to the provisions of this Chapter that allow for less than the target amounts to be procured. If there are multiple qualified and equivalent bids at the same bid offer rate, the Commission shall give preference to the bids that minimize the cost to the standard buyer or, if there is no difference in cost, preference shall be given to the bid that was submitted first.
The Commission shall evaluate a qualified bid for a project that is located on previously developed or impacted land at 90% of the offered rate. For the purposes of this subsection, "previously developed or impacted land" means areas covered by impervious surfaces, capped landfills or brown field sites as defined by the Department of Environmental Protection. If a bid under this provision is accepted, the contract rate shall equal the contract rate for the block.
For any procurement round after the initial procurement round (Blocks 2-5), the Commission may establish additional incentives, including block incentive rates, for certain attributes of distributed generation resources including, but not limited to, incentives to support resources that pair with energy storage systems, development of dual-use projects, siting of resources that provide locational benefits to the distribution system and other siting criteria developed in consultation with the Department of Environmental Protection and the Department of Agriculture, Conservation and Forestry. Any such incentives shall be described in the procurement announcement for the block.
J.Initial Procurement Round (Block 1). For the initial procurement round for (1) commercial and institutional and (2) shared distribution resources, the Commission shall accept bids for thirty (30)calendar days beginning on or before July 1, 2020 and review the bids based on the standards and requirements of this Chapter and the applicable procurement announcement. The Commission may select qualified bids in excess of the first block target for the resource sector if the Commission determines that the incremental procurement amount is in the public interest. If the Commission selects qualified bids in excess of the first block target, the target quantity to be procured in subsequent block procurements for that resource sector shall be reduced by the difference between the amount procured and the first block target. If the Commission selects bids totaling less than the first block target in the initial competitive procurement, the target quantity to be procured in subsequent block procurements for that resource sector shall be increased by the difference between the first block target and the amount procured. The Commission shall structure the initial procurement round to ensure that the policy objectives of this Chapter are achieved in such a manner to maximize economic efficiency and minimize costs to ratepayers.
The Commission shall issue a public notice of the initial procurement results, which may be a Commission order or other form of notice, no later than thirty (30) calendar days after the end of the bid acceptance period. The notice shall include the name, sponsor, size and location of each selected project, as well as the procurement round clearing price.
The applicable standard buyer shall enter into a contract with the project sponsor of each project procured in Block 1 for a term of 20 years at a contract rate equal to the applicable block rate. The block rate shall be applied as a bill credit to the commercial or institutional customer or to the subscribers of a shared distributed generation resource, as applicable, in accordance with this Chapter. For the unsubscribed output of a shared resource, a contract rate shall be paid to the project sponsor and shall reflect the value obtained by the standard buyer.
If, pursuant to this Chapter, no bids are accepted in the initial procurement round, the Commission shall:
1. Conduct a new initial round procurement within 9 months; 2. Study the reasons no bids were accepted and submit a report of its findings and any recommended legislation to the joint standing committee of the Legislature having jurisdiction over energy matters. K.Subsequent Procurement Rounds (Blocks 2-5). Subsequent to the initial procurement round (Block 1), the Commission shall conduct four additional procurement rounds for Blocks 2 - 5 for(1) commercial or institutional and (2) shared distributed generation resources. The target amount for each round shall be one-fourth (25%) of the difference between the aggregate target for the sector and amount procured in the initial procurement round. The Commission shall initiate each additional procurement round by issuing a procurement announcement for that round. The block base rate for procurement Block 2 shall equal 97% of the clearing price determined by the initial procurement round. Each successive procurement block must have a block base rate equal to 97% of the block base rate for the preceding block.
The procurement process for Block 2 shall be commenced immediately following the completion of the Block 1 procurement process, and each subsequent block shall be commenced immediately following completion of the prior block process.
The applicable standard buyer shall enter into a contract with each project procured in Blocks 2 - 5 for a term of 20 years at a contract rate equal to the applicable block rate for the portion of the project output to which the block rate is applicable. The block rate shall be applied as a bill credit to the commercial or institutional customer or to the subscribers of a shared distributed generation resource, as applicable, in accordance with this Chapter. For the unsubscribed output of a shared resource, a contract rate shall be paid to the project sponsor and shall reflect the value for the output obtained by the standard buyer.
If, in order to meet a block target, the last contract to be awarded would result in a procurement amount that would exceed the capacity of that block's target, the contract may be awarded at the block contract rate for that block. The block is then closed and the above-target amount procured in the block is subtracted from the quantity available in the next block. If this occurs in Block 5, the contract may be awarded at the Block 5 contract rate and no further contracts may be awarded except pursuant to this Chapter.
L.Failure to complete timely procurement. If any procurement block remains unfilled after more than 12 months from the date the previous block was filled, the Commission shall suspend further procurements pending completion of the process described below:1. The Commission shall review and may amend this Chapter or the standard contract and conduct a new competitive procurement for contract amounts equal to or greater than the Block 1 targets. The Commission shall publish any amendments to its rules or the standard contract and establish a new bid acceptance period for not less than 6 months and not more than 9 months.2. The Commission shall accept bids for 30 calendar days from the bid acceptance date established in the preceding paragraph and review the bids in accordance with the provisions of this Chapter. The Commission may select qualified bids in excess of the Block 1 target if it determines that the incremental procurement is in the public interest. Any amounts selected in excess of the Block 1 target shall reduce the procurement targets in the subsequent block.3. The Commission shall issue a public notice of the procurement results no later than 30 calendar days after the bid acceptance period has ended. The public notice shall include the name, sponsor, size and location of each selected project and the awarded contract price.4. The applicable standard buyer shall enter into a contract with the project or projects selected under this subsection in accordance with this Chapter.5. The Commission shall continue with procurements unless no contracts are awarded pursuant to this subsection. If no contracts are awarded pursuant to the first solicitation conducted pursuant to this subsection, the Commission shall conduct another solicitation under this subsection with the bid acceptance period to open approximately 12 months after the bid acceptance period for the first solicitation. In this event, the Commission shall also examine the reasons for the inability of the procurement to secure the target amount and submit a report of its findings and any recommended legislation to the joint standing committee of the legislature having jurisdiction over energy matters.65- 407 C.M.R. ch. 312, § 7