Ariz. Admin. Code § 14-2-705

Current through Register Vol. 30, No. 50, December 13, 2024

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 opportunity 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 acquisition to maintain system reliability;

3. The load-serving entity needs to acquire other components of energy procurement, such as fuel, fuel transportation, 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 genuine, 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 customers;

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

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

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

Ariz. Admin. Code § R14-2-705

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