Promptly upon receipt of an application to sell SRECs from an Owner Representative or Owner in response to a solicitation issued pursuant to the SREC Procurement Pilot Program, the SEU will review the application to verify whether it is complete and complies with applicable procedures. Partial or incomplete applications will be rejected.

7.1 Solicitations for Tier 1 and Tier 2-A Projects

A solicitation for Tier 1 or Tier 2-A projects will remain open until it is fully subscribed. All qualifying applications submitted pursuant to any such solicitation will be accepted for a period of 5 business days following the opening of such solicitation. If the total capacity of the Tier 1 or Tier 2-A projects received during such 5-day period is less than the allocation for such solicitation, all such applications will be accepted and SREC Transfer Agreements will continue to be awarded, on a “first come-first serve” basis, until the applicable solicitation is fully subscribed.

If the total capacity of the Tier 1 or Tier 2-A projects received within 5 business days of the opening of the applicable solicitation exceeds the available allocation for such solicitation, a lottery will be conducted among those projects in the applicable solicitation that claimed the Delaware Equipment Bonus and the Delaware Workforce Bonus. Such lottery will continue until: (a) all such projects have been awarded SREC Transfer Agreements; (b) the applicable solicitation is fully subscribed or only a de minimis portion of such solicitation (as determined by the SEU) remains unsubscribed; or (c) a project is selected that would cause such solicitation to be oversubscribed.

If all of the Tier 1 and Tier 2-A projects in the lottery that claimed both the Delaware Equipment Bonus and the Delaware Workforce Bonus are awarded SREC Transfer Agreements and more than a de minimis amount of the applicable solicitation remains unsubscribed, a second lottery will be conducted among the remaining projects that claimed either such bonus. Such lottery will continue until: (a) all such projects have been awarded SREC Transfer Agreements; (b) the applicable solicitation is fully subscribed or only a de minimis portion of such solicitation (as determined by the participating retail electricity suppliers) remains unsubscribed; or (c) a project is selected that would cause such solicitation to be oversubscribed.

Finally, if all of the Tier 1 and Tier 2-A projects in the lottery that claimed either the Delaware Equipment Bonus or the Delaware Workforce Bonus are awarded SREC Transfer Agreements and more than a de minimis amount of the applicable solicitation remains unsubscribed, a third lottery will be conducted among the remaining projects. Such lottery will continue until: (a) the applicable solicitation is fully subscribed or only a de minimis portion of such solicitation (as determined by the participating retail electricity suppliers) remains unsubscribed; or (b) a project is selected that would cause such solicitation to be oversubscribed.

If, at any time, a Tier 1 or Tier 2-A project is selected that would cause the applicable solicitation to be oversubscribed, the Owner submitting such application will have the option to reduce the capacity of the Generation Unit to equal the remaining balance of such solicitation. If the applicant elects not to reduce the capacity of the Generation Unit, that application will be rejected and the lottery will continue until such solicitation is fully subscribed or until only a de minimis portion of such solicitation (as determined by the participating retail electricity suppliers) remains unsubscribed.

7.2 Competitive Solicitations

All Tier 2-B and Tier 3 projects will be required to submit price bids in competitive solicitations. In addition, Tier 1 and Tier 2-A projects may waive their right to receive an administratively set price, and instead, elect to participate in a competitive solicitation for Tier 2-B projects, provided they (a) waive their right to receive any GEP grant or other supplemental public funding other than grants in lieu of investment tax credits,[20] and (b) comply with the requirements and conditions applicable to Tier 2-B projects.

The price bid for each project participating in a competitive solicitation must be for a fixed dollar amount, which amount cannot escalate or otherwise vary during the initial 10-year period of the term. The SEU will award SREC Transfer Agreements to such projects with the lowest price bids in each solicitation; provided that the SEU will not accept any bids in excess of $280 per SREC.

If a Tier 2-B or Tier 3 allocation is not fully subscribed in the initial solicitation, a second solicitation will be held within the following six months for the balance of the allocation for such tier. The SEU will announce all solicitations for competitively priced bids at least 30 days in advance of the bid date.

7.3 Bidding Ties

If there are multiple bids at the same price that would cause a competitive solicitation to be oversubscribed (a “Bidding Tie”), the SEU will give each applicant involved in the Bidding Tie for such tier a 5-day period to reduce its price bid and will then evaluate any revised bids submitted by the applicants involved in such Bidding Tie. The SEU will then award one or more SREC Transfer Agreements to some or all of the applicants involved in such Bidding Tie as follows:

  • first, if any such applicant submits a reduced price bid, to such applicant(s) on the basis of the lowest price bid until: (a) the pending solicitation is fully subscribed or only a de minimis portion of such solicitation (as determined by the participating retail electricity suppliers) remains unsubscribed; (b) the next highest price bid would cause the pending solicitation to be oversubscribed; or (c) there is a Bidding Tie with respect to the remaining bids;
  • second, if after completion of the first step, the pending solicitation is not fully subscribed and there is a Bidding Tie with respect to the remaining bids, the SEU will award SREC Transfer Agreements based on a lottery among the remaining applicants involved in such Bidding Tie that claimed the Delaware Equipment Bonus and the Delaware Workforce Bonus;
  • third, if after completion of the second step, the pending solicitation is not fully subscribed and there is a Bidding Tie with respect to the remaining bids, the SEU will award SREC Transfer Agreements based on a lottery among the remaining applicants involved in such Bidding Tie that claimed either the Delaware Equipment Bonus or the Delaware Workforce Bonus; and
  • fourth, if after completion of the third step, the pending solicitation is not fully subscribed and there is a Bidding Tie with respect to the remaining bids, the SEU will award SREC Transfer Agreements based on a lottery among the remaining applicants.

If a project selected based on bid price or by lottery would cause the pending solicitation to be oversubscribed, the SEU will give the applicant the option to reduce the capacity of the Generation Unit to the remaining balance of the pending solicitation. If the applicant elects not to reduce the capacity of the Generation Unit, its bid application will be rejected and the solicitation will continue until: (a) the pending solicitation is fully subscribed or only a de minimis portion of the solicitation (as determined by the participating retail electricity suppliers) remains unsubscribed; or (b) there are no remaining applications with a bid price below $280 per SREC. If the applicant elects to reduce the capacity of the Generation Unit so that it fits within a pending solicitation, the Estimated SREC Quantity will be reduced by an equal percentage. In addition, if such reduction qualifies the project for a lower tier, the original form of SREC Transfer Agreement will be terminated and replaced with the form of agreement applicable to the lower tier. In such case, the reduced capacity of the Generation Unit will be reallocated from the tier originally bid to such lower tier and any excess deposit will be returned to the Owner.

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