Coordination of Non-utility Generation Through Priority Purchase Contracts*

Abstract

This paper proposes the use of priority purchase contracts as a means' to coordinate utility purchases from non-utility generators. It is shown that differentiated contracts should have the potential for attracting more diverse NUG proposals (in terms of technical and economic characteristics). It is also argued that differentiated contracts should permit better integration and. coordination of NUG capacity since they come closer to mimicking the utility's resource allocation problem. Several areas for future research are suggested.