Md. Code Regs. 20.61.06.09

Current through Register Vol. 51, No. 21, October 18, 2024

Section 20.61.06.09 - Appointment of Escrow Administrator

A. A qualified offshore wind project shall appoint an administrator, selected by that project and acceptable to the Commission, to establish for that project an escrow account, a reserve account and other accounts required by this chapter.

B. In selecting its administrator, the relevant qualified offshore wind project shall seek bids from two or more qualified financial institutions for the scope of work required by this chapter and other scope of work as may be determined by the project; provided, however the project shall not be bound to select the institution that provides the lowest bid but may adopt other criteria that it deems fit in making its selection.

C. No later than 360 days prior to the to the estimated project COD (or, if the Commission has been notified by the project pursuant to §B of COMAR 20.61.06.16 of one or more delays in the estimated project COD, 360 days prior to the new estimated project COD), a qualified offshore wind project shall propose an administrator to the Commission for approval. That proposal shall be accompanied by all necessary and relevant documents to evidence the qualification of that administrator, in compliance with the provisions of these regulations, and the ability of that administrator to carry out the duties and obligations set forth in these regulations, as well as information evidencing that the project sought bids from two or more qualified financial institutions and the reasons the project selected the entity that it is proposing to the Commission.

D. The Commission shall notify the qualified offshore wind project of its approval or rejection of the administrator proposed by the project within 60 days of the submission by the project and, in the case of a rejection, the Commission shall provide the reasons for the rejection. In the case of a rejection, the qualified offshore wind project shall select an alternative administrator for approval by the Commission within 30 days of that rejection or, if it is unable to do so within 30 days, cooperate with the Commission to appoint a mutually acceptable administrator no later than 90 days prior to April 1 of the year in which the offshore wind energy RPS takes effect. In determining the acceptability of an institution to be an administrator, the Commission, may, in its discretion consider other factors or qualifications that it deems relevant without requiring that all of the qualifications set forth in the definition of "qualified financial institution" be met.

E. Subject to the provisions of §§A, B, C, and D of this regulation, each project shall appoint an administrator no later than 90 days prior to April 1 of the year in which the offshore wind energy RPS takes effect.

F. If the Commission has issued OREC orders applicable to more than one qualified offshore wind project, each project (or its designee) shall propose its own administrator for Commission approval, which may be the same entity as that previously approved by the Commission for one or more other projects.

G. All written contractual arrangements entered into between an administrator, the relevant qualified offshore wind project and other relevant parties and the interpretation thereof shall be governed by laws of the State of Maryland and the forum for disputes shall be the courts of the State of Maryland or, if applicable, the United States District Court for the District of Maryland. The parties may agree to submit disputes to an arbitration tribunal mutually agreed among them and submit to arbitration rules and procedures as the parties deem appropriate, provided, that any arbitration must include the participation of the Commission.

H. The fees and expenses of its administrator shall be paid by the project and may, without duplication of amounts paid to the administrator in respect of fees and expenses, be deducted by the project's administrator from the amount payable to the project in respect of its OREC invoice in accordance with Regulation .11G of this chapter.

I. Each administrator and the relevant qualified offshore wind project may agree to other terms and conditions as are customarily applicable to escrow, account administration and custodial arrangements so long as those terms and conditions are not prohibited by the provisions of this chapter and OWEA. Within 30 days of its entering into definitive documents with its administrator, each qualified offshore wind project shall submit to the Commission copies of executed versions of those documents, together with a summary of their principal terms and conditions, including any provisions that are in addition to those required by this chapter.

J. The Commission shall have regulatory oversight over each administrator to ensure proper administration of the relevant escrow account, reserve account and administrator GATS account, including ensuring that invoices issued to the projects and to the OREC purchasers are accurate and properly issued and that payments made by OREC purchasers, payments made to qualified offshore wind projects and rebates paid to or on behalf of the State's retail electric customers are consistent with the terms of the Commission's OREC orders and the provisions of this chapter. Each qualified offshore wind project and its administrator shall keep proper books and records of all transactions associated with the execution and administration of the OREC order and related OREC price schedule that will be subject to inspection and audit by the Commission. No later than 90 days following the end of each calendar year, each qualified offshore wind project shall cause its administrator to submit a report to the Commission, in the form as shall be approved by the Commission, summarizing the transactions associated with its administration of the relevant escrow account, reserve account, administrator GATS account and related OREC price schedule, including details of all fees and expenses paid to that administrator for the same period. The Commission may seek further information in relation to or clarification of any item on the administrator's report as it deems prudent.

K. The Commission has the authority to notify and require that a qualified offshore wind project replace its administrator within 90 days of the Commission's request if the Commission determines that the administrator has ceased to be a qualified financial institution, has failed to carry out its duties and obligations in accordance with law and the provisions of this chapter, has engaged in gross negligence or willful misconduct in carrying out its duties or obligations or has been negligent in the management and use of funds entrusted to it. If the relevant qualified offshore wind project fails to replace its administrator within the period specified above, the Commission may remove the project's administrator and appoint a replacement administrator in its place. All costs and expenses incurred by the Commission in doing so shall be invoiced to, or made for the account of, the project and paid by the replacement administrator as a third-party expense, by deducting these amounts from monies that would otherwise be paid to the project in respect of its OREC invoice under Regulation .11G of this chapter.

L. A project may seek the approval of the Commission for removal and replacement of its administrator for any one or more of the reasons specified in §K of this regulation or for cause as specified in the contractual agreements entered into between the project and the administrator. In seeking the Commission's approval, the project shall submit to the Commission evidence that the administrator has ceased to be a qualified financial institution, evidence of any of its misconduct or other reasons for the removal of the administrator. The project shall submit to the Commission for approval a replacement administrator with evidence of such administrator's qualifications in compliance with the provisions of this chapter and the expected timeline for the replacement to take effect. If at the time of such proposed removal, the project shall have any outstanding debt facilities or shall have received equity investments from one or more unaffiliated entities, the project shall also submit to the Commission written confirmation from each of these entities (or their authorized representative or agent) that it has either approved the removal of the administrator and its replacement or waived its right to so approve. Any removal and replacement of an administrator under this section shall be at the sole cost and expense of the relevant project.

M. Upon a project acquiring actual knowledge that its administrator is no longer a qualified financial institution or has engaged in gross negligence or willful misconduct in carrying out its duties or obligations or has been negligent in the management and use of funds entrusted to it, the project shall promptly notify the Commission in writing of the same and reference §K of this regulation.

Md. Code Regs. 20.61.06.09

Regulation .09 amended effective 41:18 Md. R. 1010, eff.9/15/2014