NAC704.8777. Proposed contract for purchase of capacity or energy: Contents; requirement for bond or other security; application for approval of contract.

     1. Each proposed contract for the purchase of capacity or energy which is filed with the Commission pursuant to NRS 704.310 must include, without limitation:

     (a) The level of capacity which will be provided by the qualifying facility.

     (b) The rates for the sale of capacity or energy to the utility.

     (c) The procedure for modifying or terminating the contract if the qualifying facility fails to meet critical milestones.

     (d) A requirement for the installation of a metering device to record the delivery of power from the qualifying facility to the utility.

     (e) A requirement that the qualifying facility obtain insurance for liability to protect a utility from damages which may result from the injury or death of a person or the destruction of property because of the operation of a qualifying utility.

     (f) The duties relating to the operation of the qualifying facility which may be assigned or delegated by the owner or operator of that facility. An owner or operator of a facility shall not delegate his or her duties to a person who lacks the resources or knowledge and experience to perform in accordance with the provisions of the contract.

     (g) Remedies and damages available to the utility for the failure of the qualifying facility to perform its duties pursuant to the contract, including, without limitation, the:

          (1) Recovery of any overpayments;

          (2) Cost of the replacement of capacity or power; and

          (3) Incremental cost of a replacement facility.

     (h) The method for allocating the interconnection costs for the delivery of power from the qualifying facility.

     2. If a contract which includes front-end payments does not include a requirement that the qualifying facility obtain a bond or other security, the reason for the lack of such a requirement must be submitted to the Commission at the time the contract is filed.

     3. An application for approval of a contract executed by a public utility and a qualifying facility, independent producer of power or similar entity that contracts with a public utility to sell the utility power must include the amount of bonds, the interest on which is exempt from federal income tax or excluded from gross revenue for the purposes of federal income tax, which the qualifying facility, independent producer of power or similar entity intends to seek from the State of Nevada or any political subdivision thereof. The qualifying facility, independent producer of power, or similar entity shall give notice of the amount of the bonds which it intends to seek to the Director of the Department of Business and Industry at the time it files its application with the Commission.

     (Added to NAC by Pub. Service Comm’n, eff. 3-27-92; A 11-12-93)—(Substituted in revision for NAC 704.703)