Renewable ENERGY CERTIFICATE Transactions

WT Draft 0607/21///11

For Discussion Only

Service Schedule R

rENEWABLE ENERGY CERTIFICATE transactions

WITH AND WITHOUT ENERGY

R-1Introduction. This Service Schedule R states terms and conditions applicable to REC Transactions under the Agreement.

Note re FERC Jurisdiction:WSPP would request that FERC disclaim jurisdiction over unbundled REC Transactions, and with respect to the terms and conditions of RECs in bundled REC Transactions in which the RECbundled price whenis allocated among energy and RECs. The CommitteeAs requested a further meeting, Counsel will continue to work with FERC Staff to pin this down andand when appropriate prepare a list of pros and cons of FERC filing for WSPP to consider.

R-2Product Definitions.

R-2.1Commitment to Provide REC and/or Energy. A REC Transaction may be a purchase and transfersale of a REC separately from, or bundled with, the purchase and sale of electric energy with or without capacity. A REC Transaction may be designated in the Confirmation as one of the products described in Section R-2.1.1 through Section R-2.1.6, or as the Parties may otherwise agree: .

R-2.1.1Firm REC. A Firm REC is purchased and sold in a REC without associated energy [define or explain associated], toTransaction which does not include the purchase and sale of energy or capacity. The following terms and conditions apply:

(a)A remedy for non-performance is available under Section R-13.

(b)The Confirmation shall include, at a minimum, [this language is consistent with Agreement 32.1.1 and is carried through subsequent sections] the following terms and any additional terms to which the Parties agree: the REC Contract Quantity;, Contract Price;, and Vintage; Applicable Program if any;, and may include additional terms to which the Parties agree. The Confirmation may also identify the State(s) or region(s) in which the Environmental Attributes must originate (specific, and may designate one or more Applicable Programs. Specific Renewable Energy Facility(ies) used for origination of the Environmental Attributes need notor Renewable Energy Source(s) may be identified)., and must be identified if a designated Applicable Program requires.

R-2.1.2Firm Bundled REC. A Firm Bundled REC is purchased and sold in a REC bundled with firm energy, toTransaction which includes the purchase and sale of Firm Energy. The following terms and conditions apply:

(a)A remedy for non-performance is available under Section R-13;

(b)Terms and conditions in the Confirmation.

(i)The Confirmation shall include, at a minimum, the following terms and any additional terms to which the Parties agree: the Contract Price for the REC and the Firm Energy, which Contract Price may be allocated between the REC and the Firm Energy.

(i)A single Contract Price for RECs and firm energy, as to which an allocation between a REC price and a firm energy price may be stated;

(ii) With respect to RECs, the REC Confirmation shall include the Contract Quantity; and Vintage; Delivery Dates; Applicable Program if any;, and may include any additional terms to which the Parties agree. The Confirmation may also identify the State(s) or region(s) in which the Environmental Attributes must originate (specific, and may designate one or more Applicable Programs. Specific Renewable Energy Facility(ies) used for origination of the Environmental Attributes need not be identified);or Renewable Energy Source(s) may be identified, and must be identified if a designated Applicable Program requires.

(iii)With respect to firm energyFirm Energy, the Contract Quantity, Delivery Dates or period of delivery, delivery rate, delivery points, transmission path (if any), [could refer toConfirmation shall include the Standard Confirmation Provisions] as the Parties determine are applicable, and may include any additional terms to which the Parties agree.

(c)The following additional terms and conditions apply to the energy component of a Firm Bundled REC: [OC to determine whether to set out here (i) through (iii) or incorporate of Service Schedule C by reference]

(i) Subject to any conditions agreed by schedulers, Seller shall ensure that delivery of the firm energy is prescheduled and scheduled apply to the purchase and sale of Firm Energy except as firm energy, as may be required by the rules of the applicable Regional Organization in effect at the delivery time.

(iii) Firm energy shall be interruptible only (a) as the Parties may have agreed in the Confirmation;, (b) due to an Uncontrollable Force as provided in Section 10 of the Agreement [or in this schedule- possibly for energy just incorporate 10]; or (c) where applicable, to meet Seller’s public utility or statutory obligations to its customers; provided, however, this part (c) shall not allow interruptions for reasons other than reliability of service to native load. Interruption of service under parts (a) or (b) shall not constitute non-performancethe Parties may modify such terms and conditions in the Confirmation.

R-2.1.3Resource Contingent REC. A Resource Contingent REC is purchased and sold in a REC without associatedTransaction which does not include the purchase and sale of energy, originating at a Renewable Energy Facility identified in the Confirmation, to which the or capacity. The following terms and conditions apply:

(a)A remedy for non-performance is available under Section R-13, except in the event [and to the extent?] in the Vintage: (i) the Renewable Energy Facility identified in the Confirmation was not on line and available for generation due to Forced Outage or Unforced Outage [include partial?], (ii) the Renewable Energy Facility identified in the Confirmation did notto produce energy required for the REC due to Forced Outage, Unforced Outage, or Fuel Impediment; or (iiiii) the occurrence of such other circumstances to which the Parties agreed in the Confirmation, resulting in a reduction of output, outage or unavailability to which the Parties may agree. [Note, eg, environmental redispatch or DSO216.]produce energy required for the REC. In the event and to the extent of an outage under (i), (ii) or, if applicable (iii, (ii), the resulting reduction in output shall be allocated among all purchasers of RECs from the Renewable Energy Facility identified in the Confirmation (including purchasers who are identified under any provisions in the VintageConfirmation allowing for subsequent identification) proportionately to thosesuch purchasers’ respective entitlements.

(b)The Confirmation shall include, at a minimum, the following terms and any additional terms to which the Parties agree:Contract Quantity, Contract Price, identification of the Renewable Energy Facility designated(ies) to provide the REC; the REC Contract Quantity; Contract Price; , and Vintage; Applicable Program, if any;, and may include the State(s) or region(s) in which the Environmental Attributes must originateadditional terms to which the Parties agree. The Confirmation may also designate one or more Applicable Programs.

R-2.1.4Resource Contingent Bundled REC. A Resource Contingent Bundled REC is purchased and sold in a REC bundled with associated energy produced by a RenewableTransaction which includes the purchase and sale of Resource Contingent Energy Facility identified in the Confirmation, to which the. The following terms and conditions apply:

(a)A remedy for non-performance is available under Section R-13, except in the event and to the extent: (i) the Renewable Energy Facility identified in the Confirmation was not on line and available to produce Resource Contingent Energy as required for generationthe REC and Delivery, due to Forced Outage or, Unforced Outage, (ii) the Renewable Energy Facility identified in the Confirmation did not produce energy (or the associated REC) due to or Fuel Impediment; (iiior (ii) the occurrence of such other circumstances to which the Parties agreed in the Confirmation, resulting in a reduction of output, outage or unavailability to which the Parties may agree; or (iv) whereproduce Resource Contingency Energy required for the REC and Delivery, or otherwise for sale under the Confirmation. In the event and to the extent of an outage under (i) or, if applicable, Seller required the energy to meet public utility or statutory obligations to maintain the reliability of its service to its native load. In the event of interruption under part (i), (ii), (iii) or (iv), the resulting reduction in output shall be allocated among all purchasers of RECs and energy (other than energy interruptible for any reason) from the Renewable Energy Facility who are identified in the Confirmation (including purchasers identified in the Confirmation,under any provisions in the Vintage or Delivery period,Confirmation allowing for subsequent identification) proportionately to Purchasers’such purchasers’ respective entitlements.

(b)Terms and conditions in the Confirmation.

(i)The Confirmation shall include, at a minimum, the following terms and any additional terms to which the Parties agree:

(i)Identification of the Renewable Energy Facility designated to provide the REC and associated energy;

(ii)A single the Contract Price for RECs and associated energyResource Contingent Energy, as to which an allocation between a REC price and an energy the Resource Contingent Energy price may be stated;, and identification of the Renewable Energy Facility to provide the REC and Resource Contingent Energy.

(iii)ii)With respect to RECs, the REC Confirmation shall include the Contract Quantity; and Vintage; Delivery Dates; Applicable Program, if any;, and may include the State(s)designation of one or region(s) inmore Applicable Programs and any additional terms to which the Environmental Attributes must originate;Parties agree.

(iii)With respect to energy, the Contract Quantity, Delivery Dates or period of delivery, delivery rate, delivery points, transmission path (if any), [could refer to Resource Contingent Energy, the Confirmation shall include the Standard Confirmation Provisions] as the Parties determine are applicable and any additional terms to which the Parties agree.

(c)The following additional terms and conditions apply to the energy component of a Resource Contingent Bundled REC: [OC to determine whether to set out here (i) through (iii) or incorporate Service Schedule B by reference]

(i) Subject to any conditions agreed by schedulers, Seller shall ensure that deliveryapply to the purchase and sale of energyResource Contingent Energy except as the Parties may modify such terms and conditions in the WECC is prescheduled and scheduled, with the applicable coding, in accordance with WECC rules in effect at the delivery time. Energy delivered in other Regional Organizations shall be scheduled and coded in accordance with the rules of the applicable Regional Organization in effect at the delivery time.

(ii) If the Seller is a "public utility" as defined in Section 201(e) of the Federal Power Act, 16 U.S.C. §824(e), and the Parties have allocated the Contract Price between RECs and energy, [Discuss with FERC Staff- require allocation if jurisdictional?] then the Contract Price component [applicable to energy] must comply with that Seller’s FERC-filed market based rate tariff or Seller’s cost-based rate filed under Confirmation, and further modified as follows: [Note: Service Schedule Q of the Agreement, as applicable. B appears to have more extensive delivery flexibility than the exceptions to delivery set out for Resource Contingent REC or Bundled. Discuss.]

(i)The following is added at the end of Section B-3.8: “Seller shall notify Purchaser of volumes to be delivered no later than thirty (30) minutes [verify time period] before the hour in which delivery is to occur.”

(ii)The following is added at the end of Section B-3.9: “(f) By the Seller when all or a portion of the unit is unavailable due to Fuel impediment, by an amount in proportion to the amount of the reduction in the output of the unit, unless otherwise agreed by the schedulers.”

R-2.1.5Facility As-Run REC: A Facility As-Run REC is purchased and sold in a REC without associated energy, toTransaction which does not include the purchase and sale of energy or capacity. The following terms and conditions apply:

(a)A remedy for non-performance is available under Section R-13, except in the event and to the extent the Renewable Energy Facility identified in the Confirmation was not on line to produce energy required for the REC for any reason. The Seller is obligated to Deliver the RECsREC only to the extent that the Renewable Energy Facility identified in the Confirmation produces energy in the Vintage. required for the production of the REC. A remedy is available if the Renewable Energy Facility is operated and the Seller fails to attribute to Purchaser the resulting Environmental Attributes required for the REC. In the event and to the extent the Renewable Energy Facility does not produce sufficient energy required for the Contract Quantity, the reduction in output resulting from reduced operation of the Renewable Energy Facility shall be allocated among all applicable purchasers of RECs from that Renewable Energy Facility who are identified in the Confirmation (including purchasers identified under any provisions in the Confirmation allowing for subsequent identification) proportionately to such purchasers’ respective entitlements.

(b)The Confirmation shall include the Contract Quantity, Contract Price and Vintage, and may include additional terms to which the Parties agree. The Confirmation may also identify the State(s) or region(s) in which the Environmental Attributes must originate, and may designate one or more Applicable Programs. Specific Renewable Energy Facility(ies) or Renewable Energy Source(s) may be identified, and must be identified if a designated Applicable Program requires.

R-2.1.6Facility As-Run Bundled REC: A Facility As-Run Bundled REC is purchased and sold in a REC Transaction which includes the purchase and sale of Economy Energy. The following terms and conditions apply:

(a)A remedy for non-performance is available under Section R-13, except in the event and to the extent the Renewable Energy Facility identified in the Confirmation was not operated for any reason. For example, and without prejudice to the generality, aon line to produce Economy Energy required for the REC and Delivery, for any reason. The Seller is obligated to Deliver the REC and the Economy Energy only to the extent that the Renewable Energy Facility identified in the Confirmation produces such Economy Energy. A remedy is available if the Renewable Energy Facility is operated and the Seller fails to attribute to Purchaser the resulting Environmental Attributes required for creation of a the REC. and/or the resulting Economy Energy. In the event and to the extent the Renewable Energy Facility isdoes not operated sufficiently to produce the REC sufficient energy required for the Contract Quantity in the Vintage, the shortfall or Delivery, the reduction in output resulting from reduced operation of the Renewable Energy Facility shall be allocated among all applicable purchasers of RECs from thethat Renewable Energy Facility who are identified in the Confirmation (including purchasers identified under any provisions in the VintageConfirmation allowing for subsequent identification) proportionately to thosesuch purchasers’ respective entitlements.

(b)The Confirmation shall include, at a minimum, the following terms and any additional terms to which the Parties agree: identification of the Renewable Energy Facility designated to provide the REC; the REC Contract Quantity; Contract Price; Vintage; Applicable Program, if any; and may include the State(s) or region(s) in which the Environmental Attributes must originate.

R-2.1.6Facility As-Run Bundled REC: A Facility As-Run Bundled REC is a REC with associated energy, to which the following apply:

(a)The Seller is obligated to Deliver the REC and associated energy to the extent that the Renewable Energy Facility identified in the Confirmation produces energy in the Vintage or pursuant to any agreed schedule for energy Deliveries (which agreement may include dynamic scheduling), and a remedy for non-performance is available under Section R-13 for failure to perform. For example, and without prejudice to the generality, a remedy is available if the Renewable Energy Facility is operated and the Seller fails to Deliver the resulting energy or REC to Purchaser. In the event the Renewable Energy Facility is not operated sufficiently to produce the energy and REC Contract Quantities for the Vintage or pursuant to any agreed schedule for energy Deliveries, the shortfall shall be allocated among all applicable purchasers of RECs and energy from the Renewable Energy Facility identified in the Confirmation with contractual entitlements to receive RECs and energy during the Vintage and scheduled Delivery periods, as applicable, proportionately to those purchasers’ respective entitlements.

(b)The Confirmation shall include, at a minimum, the following terms and any additional terms to which the Parties agree:

(i)Identification of the Renewable Energy Facility designated to provide the REC and associated energy;