February 3, 2011
Arnold Podgorsky
Wright & Talisman PC
[email protected]
202.393.1200
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REC Service Schedule would be part of the WSPP
Agreement, not a separate contract
REC is sold and administered by the specified,
applicable certification program
REC can be bundled with energy or unbundled (a
tradable REC or T-REC. Bundled would have both
Energy Confirm and REC Confirm.
REC can be Firm or Unit Commitment
REC can be for all, some, or none of the
Environmental Attributes (the REC Product as
stated in the Confirm)
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Seller’s representation/warranty (“R/W”)that the
REC complies with the Applicable Program is
subject to a Change in Law. Once Seller’s R/W
kicks in, Seller does not warrant against change
in Law.
Other reps and warranties, as customary.
Remedies: Failure to pay can be a material breach
resulting in liquidation. Failure to deliver
(unexcused non-performance) yields damages.
Definitions are in the back
Now let’s get specific
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R-1.1 Provides for bundled and unbundled
REC Transactions
R-1.2 Two types RECs: Firm and Unit
Commitment. Failures under UC must be
allocated proportionately among all UC
purchasers from the facility.
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The WSPP Agreement applies to REC
Transactions, but if Agreement provisions
conflict with Schedule R provisions, then R
prevails.
Following contract documents form a REC
Transaction:
◦ WSPP Agreement
◦ Service Schedule R
◦ Confirmations(s):
 For unbundled, the written (no oral) REC Transaction
Confirmation
 For bundled, an energy Confirmation and a written REC
Transaction Confirmation
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Definitions are in Annex 1 to Service Schedule
R. We felt that breaking them out helped
readability of the document.
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Confirmation form in Annex 2; any form the
parties want will suffice. Modifications of
Agreement or Service Schedule R must be
stated in the Confirmation.
We probably need a separate name for the
REC Transaction Confirmation to differentiate
from the energy Confirmation? Probably REC
Confirmation and Energy Confirmation (which
would be defined to include capacity) 
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Section 28 netting applies, if applicable to the
parties.
Agreement 9.1 inapplicable (1 month
accounting period)
Agreement 9.2 inapplicable (pay on later of
10 days after invoice receipt or on 20th day of
month). Instead, pay on later of 15 Business
Days after receipt of invoice or 15 Business
Days after Certification Authority certifies
delivery. If no certification, then Seller’s
attestation suffices.
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It’s up to you
◦ It’s up to you
 It’s up to you…
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Do we want (can we agree) something more?
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In addition to Agreement 33.3, Seller R/W:
◦ REC Transaction and REC Product comply with
Applicable Program, subject to Change in Law
◦ Seller has title to REC Product, etc., free and clear,
and has not committed it elsewhere
◦ REC and REC Product conform to the specifications
of Service Schedule R and the Confirmation
◦ Unless otherwise specified, the REC is unbundled
(not include the energy from the facility)
◦ Seller has and will maintain Certification from the
applicable Certification Authority
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Throughout the REC Transaction, each Party
is an “eligible commercial entity” and “eligible
contract participant” under the Commodity
Exchange Act 1a(11) and 1a(12)
The parties individually negotiated the terms
and conditions of the REC Transaction (this is
not a formatted product like a future)
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Parties elect and allocate Change in Law risk in
the Confirmation, except a CiL to which R-9.2
applies (CiLs with nullifying effect)
Parties may elect Seller’s warranty kick-in date as
of Effective Date of REC Transaction, Delivery
Date, or otherwise.
◦ Text of R-9.1 needs tightening
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Important: if a Change of Law nullifies the REC,
the Purchaser is entitled to a refund
proportionate to the term, or the impacted REC
Products.
Applicable law is the law of the Applicable
Program
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Parties shall inform each other of certification
problems and cooperate in resolving same.
Throughout the REC Transaction, upon
request, Party provides records needed for
Certification Authority to perform its function
of certifying any details; billing disparities
shall be corrected, with interest per
Agreement 9.3. Purchaser can disclose
information to prove regulatory compliance.
R-10.3, inspection right goes up the chain.
Resale of RECs permitted
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Purchaser has right to inspect and audit
Seller’s records to assure itself and
Certification Authority that Seller’s provision
of REC Product complies with the Applicable
Program. Five business day notice.
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Uncontrollable Force is expanded to include
failure or disruption in deliveries caused by a
Certification Authority, not due to the fault of
the asserting party
R-12.2 Unlike Agreement, injunctive relief
permitted. Narrow to seller? Other than
paying, does Purchaser have any performance
obligation, eg, obligation to receive? Seems
not, as this is not energy with resulting
reliability concerns of overinjection.
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Damages under Agreement 21.3(a)(1) for any
period for which injunction not obtained.
Hourly references are dropped.
Failure of Purchaser to pay is Event of Default
under Agreement 22.
R-12.4 Damages also include penalties
assessed against Purchaser.
R-12.5 Arbitration (?)
R-12.6 Added transmission costs of
Agreement 21.3(a)(3) are inapplicable.
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Annex 1: Definitions
Annex 2: REC Transaction Confirmation
Exhibit A: Form of Attestation (by renewable
energy facility)
California Provisions
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