Varnum Blogs
Questions About Detroit Edison Requiring a Buyout Provision
The November RFP posted by Detroit Edison for capacity, energy and renewable energy credits from renewable energy systems is intended to fulfill the company’s obligations under the 2008 RPS statute. Curiously, each party responding to the RFP is being required to include in its proposal an option for Detroit Edison to “acquire, own, and operate the entire Project at anytime two or more years after the Commercial Operation Date.” A number of questions come to mind. Why this requirement? How will the various proposed buyout provisions be evaluated in awarding PPAs? Is this Detroit Edison’s method for having developers build its projects? How does this requirement square with Section 33(1)(b) of the statute which states, “At least 50% of the renewable energy credits shall be from renewable energy contracts that do not require transfer of ownership of the applicable renewable energy system to the electric provider…”? Is the company reading a “mandatory option” as something different from “requiring transfer of ownership”? Will this requirement “chill” the types of proposals that will be received? Is this what the legislature intended when it led the nation in giving utilities the right to develop half the generation required by the RPS? The MPSC needs to consider getting and giving public answers to these questions.
