R14-2-705. Procurement

A. Except as provided in subsection (B), a load-serving entity may use the following procurement methods for the wholesale acquisition of energy, capacity, and physical power hedge transactions: 1. Purchase through a third-party online trading system; 2. Purchase from a third-party independent energy broker; 3. Purchase from a non-affiliated entity through auction or an RFP process; 4. Bilateral contract with a non-affiliated entity; 5. Bilateral contract with an affiliated entity, provided that non-affiliated entities were provided notice and an opportunity to compete against the affiliated entity’s proposal before the transaction was executed; and 6. Any other competitive procurement process approved by the Commission. B. A load-serving entity shall use an RFP process as its primary acquisition process for the wholesale acquisition of energy and capacity, unless one of the following exceptions applies: 1. The load-serving entity is experiencing an emergency; 2. The load-serving entity needs to make a short-term acquisition to maintain system reliability; 3. The load-serving entity needs to acquire other components of energy procurement, such as fuel, fuel transportation, and transmission projects; 4. The load-serving entity’s planning horizon is two years or less; 5. The transaction presents the load-serving entity a genuine, unanticipated opportunity to acquire a power supply resource at a clear and significant discount, compared to the cost of acquiring new generating facilities, and will provide unique value to the load-serving entity’s customers; 6. The transaction is necessary for the load-serving entity to satisfy an obligation under the Renewable Energy Standard rules; or 7. The transaction is necessary for the load-serving entity’s demand-side management or demand response programs. C. A load-serving entity shall engage an independent monitor to oversee all RFP processes for procurement of new resources.