(a) Authority to offer tariff. No later than sixty days after the effective date of this subchapter, the Utility shall file for Commission approval a tariff and a proposed Power Purchase Agreement consistent with this section. The Commission within sixty days after receipt, shall initiate a review of the tariff consistent with its investigative powers established in 30 V.I.C. § 20.
(b) Tariff terms.
(1) The Utility shall enter into a power purchase agreement with the qualified owner of a renewable electricity generator, existing or to be created, which is proposed by the qualified owner to be interconnected to the grid. The agreement obligates the utility to purchase an agreed upon amount of the electricity produced by the renewable electricity generator.
(2) There may be only one qualified owner per facility.
(3) The term of the power purchase agreement may not be shorter than 10 years and not longer than 30 years.
(4) The Commission shall establish the rates to be set forth in and paid under the power purchase agreement in accordance with subsections (c) and (d).
(5) The utility shall file a copy of each power purchase agreement with the Commission within thirty days of execution.
(c) Tariff rates. The tariff described in subsection (a) must have a rate schedule determined as follows:
(1) The Commission shall set the FIT Program tariff rate for electricity generated by diversified renewable energy technologies under the purview of its ratemaking authority.
(2) The Commission shall establish procedures for tariff rates depending on the renewable energy technology type; project size and the location of the project.
(3) An appropriate tariff structure must establish rates at percentage discount to the avoided cost of the Utility in the given year that the power purchase agreement is executed. If the avoided cost rates change, the amount to be paid under any existing power purchase agreement may be adjusted.
(4) The Commission shall review periodically and publish the avoided cost rate.
(d) Tariff review and adjustment.
(1) Effective sixty days from the effective date of this subchapter and at a minimum of every five years, the Commission shall, if it determines it to be necessary, and after proper review and analysis of the reports submitted, hold public hearings. The Commissioner shall also review such other publicly available information as it may consider appropriate, adjust tariff rates for new renewable energy systems to be developed, pursuant to this section, in order to promote meaningful amounts of renewable energy development projects in the Territory in order to minimize costs to ratepayers, and achieve compliance with the renewable energy standards set forth in section 1152 of this title. Rates paid under then-existing power purchase agreements must be adjusted by the new tariffs.
(2) The Commission may increase one or more of the tariffs established pursuant to this section in accordance with paragraph (1), after notice and hearing and upon finding that the objectives of achieving adequate renewable energy development as set forth in section 1152 et seq. are not likely to be met without increasing the tariff for renewable energy projects connected to the electrical distribution system. Similarly, if the Commission finds that the renewable energy objectives have been over-achieved, then the Commission may reduce one or more of the tariffs established pursuant to this section. An increase in the tariff made pursuant to this section may not exceed the Utility’s avoided cost.
(3) If after a certain period of time, little or no power purchase agreements are executed, presumably due to insufficient pricing, the Commission shall act in accordance with paragraph (1) of this section to adjust the pricing. An increase in the tariff made pursuant to this section may not exceed the Utility’s avoided cost.
(e) Tariff payments tax exemption. All payments of tariffs to customer-generators are exempt from inclusion in gross receipts for purposes of gross receipts tax and the application of Title 33 of the Virgin Islands Code.
(f) Interconnection.
(1) It is the policy of this subchapter to promote open access transmission by renewable energy generators to transmission cables of the utility.
(2) The qualified owner shall bear all costs associated with the interconnection of renewable electricity generators, including direct interconnection costs and utility compliance costs, unless an alternate agreement is negotiated.
(3) The Commission shall enforce the interconnection contract and standard interconnection schedules adopted by the utility except:
(A) No Commission approval or acceptance is required;
(B) The qualified owner shall bear all design, engineering, construction and procurement costs of the interconnection.
(g) Standard power purchase agreement. No later than 90 days after the effective date of this subchapter, the Commission shall approve a standard contract to be used by the utility as the sole form of power purchase agreement under the feed-in tariff established pursuant to this section which is in effect on the date of the execution of the power purchase agreement. The form of standard contract may be altered from time to time to address developing circumstances.
(1) The agreement must include the price paid for each kilowatt hour generated and must set forth an annual adjustment, effective on January 1 of each year or part year, to be prorated on the first January 1 of the agreement’s term, at a rate set by the Commission and the duration of the agreement.
(2) The agreement must require that the Utility must pay the qualified owner the tariff rate, as may be adjusted pursuant to subsection (d)(1) on a monthly basis; estimated payments may be made with adjustments based upon actual readings quarterly.
(3) The qualified owner may not assign the agreement without the express written consent of the Utility. The Utility may not be unreasonably withhold its consent.
(4) An originally-executed form of the power of attorney must be submitted to the Utility with the executed power purchase agreement.