Section R14-2-705. Procurement

A.      Except as provided in subsection (B), a load-serving entity may use the following procurement methods for the wholesale acquisition of energy, capacity, and physical power hedge transactions:

1.        Purchase through a third-party online trading system;

2.        Purchase from a third-party independent energy broker;

3.        Purchase from a non-affiliated entity through auction or an RFP process;

4.        Bilateral contract with a non-affiliated entity;

5.        Bilateral contract with an affiliated entity, provided that non-affiliated entities were provided notice and an oppor- tunity to compete against the affiliated entity’s proposal before the transaction was executed; and

6.        Any other competitive procurement process approved by the Commission.

B.       A load-serving entity shall use an RFP process as its primary acquisition process for the wholesale acquisition of energy and capacity, unless one of the following exceptions applies:

1.        The load-serving entity is experiencing an emergency;

2.        The load-serving entity needs to make a short-term acqui- sition to maintain system reliability;

3.        The load-serving entity needs to acquire other compo- nents of energy procurement, such as fuel, fuel transpor- tation, and transmission projects;

4.        The load-serving entity’s planning horizon is two years or less;

5.        The transaction presents the load-serving entity a genu- ine, unanticipated opportunity to acquire a power supply resource at a clear and significant discount, compared to the cost of acquiring new generating facilities, and will provide unique value to the load-serving entity’s custom- ers;

6.        The transaction is necessary for the load-serving entity to satisfy an obligation under the Renewable Energy Stan- dard rules; or

7.        The transaction is necessary for the load-serving entity’s demand-side management or demand response programs.

Corporation Commission – Fixed Utilities

C.      A load-serving entity shall engage an independent monitor to oversee all RFP processes for procurement of new resources.

Historical Note

New Section made by final rulemaking at 16 A.A.R. 2150, effective December 20, 2010 (Supp. 10-4).