LEGAL BASIS; PURPOSE OF REGULATION

1.1 Legal Basis. This JOINT REGULATION FOR THE PROCUREMENT, EVALUATION, SELECTION, NEGOTIATION AND AWARD OF CONTRACTS FOR THE PURCHASE OF ENERGY AND FOR THE PROCUREMENT, EVALUATION, SELECTION, NEGOTIATION AND AWARD PROCESS FOR THE MODERNIZATION OF THE GENERATION FLEET AND OTHER RESOURCES (this "Regulation") is promulgated by virtue of the power vested in the Puerto Rico Energy Commission and the Puerto Rico Electric Power Authority by Sections 6B(a)(ii), 6B(a)(iii) of Act No. 83 of May 2, 1941, as amended, and Article 6.3 of Act No. 57-2014, as amended. 1.2 Purpose of Regulation. The purpose of this Regulation is to establish a procurement, evaluation, selection, negotiation and award process for contracting with third parties for the purchase of energy and for the procurement, evaluation, selection, negotiation and award process for the modernization and upgrade of the generation fleet and other resources of the Authority, that is consistent and transparent, and that encourages and supports a climate of private sector innovation and investment in the Commonwealth to address the specific power generation needs of the Authority. In order to carry out the purposes of the Acts, this Regulation provides guidelines and procedures for, among others: (i) soliciting, obtaining and evaluating proposals by third parties; (ii) selecting the entities or individuals that will enter into agreements with the Authority; (iii) negotiating and awarding agreements; and (iv) defining the process for the approval by the Energy Commission of the final agreements to be executed.