Provision Of Electricity By Qualified Third Parties

Section 1.

Guiding Principle.

As per Section 59 , the provision of electric service in remote and Unviable Areas that the Distribution Utility is unable to service for any reason shall be opened to other qualified third parties. The provision of electricity in Unviable Areas by qualified third parties shall be a regulated business.

Section 2. Scope of Application.

This Rule shall apply to third parties qualified and authorized by ERC in accordance with the Act to undertake the provision of electric service in remote and Unviable Areas that a Distribution Utility is unable to serve. Section 3. Determination of Remote and Unviable Areas. Every September, the DOE shall issue a declaration of all the remote and Unviable Areas that cannot be served by a Distribution Utility within the following three (3) years. The declaration shall be consistent with the PDP and made in consultation with the NEA and DUs. The remote and Unviable Areas specified in the declaration shall be open for participation by qualified third parties. Section 4. Determination of Qualified Third Parties. The DOE shall set criteria for determining qualified third parties that may participate in providing electricity to remote and Unviable Areas. These criteria may include financial, technical, environmental, and other indices of performance. The criteria shall give preference to parties that would utilize least-cost new Renewable Energy Resources in providing electricity. Section 5. Rights and Obligations of Qualified Third Parties. (a) Any Distribution Utility that fails to provide electricity to an Unviable Area shall be required by the ERC to enter into a contract with a qualified third party to provide electric service in such an Unviable Area. (b) A qualified third party shall comply with all applicable provisions of the Distribution Code, including the requirement to obtain a COC for its Generation Facilities and other permits the ERC may require. (c) A qualified third party shall charge rates in Unviable Areas according to ERC rules for cost recovery of Generation Facilities and associated power delivery systems. (d) A qualified third party shall submit annual financial statements to ERC for determining the effectiveness of the approved rate. Page 49 of 100(e) A qualified third party shall report annually to DOE the rate of electrification of its coverage areas. Section 6. Obligations of the ERC. (a) The ERC shall set guidelines for the issuance of permits to qualified third parties that serve a remote or unserved and Unviable Area within the Distribution Utility’s Franchise Area. (b) The ERC shall set the rules in computing rates that allow full cost recovery of the Generation Facilities and delivery systems built to serve remote or unserved and Unviable Areas.