Opt-In Mechanism (GEAP)

The Opt-In Mechanism is a voluntary procurement arrangement under the Green Energy Auction Program (GEAP) that allows Distribution Utilities (DUs) to procure directly from a GEA winning bidder, bypassing the socialized FIT-All funding pool [DC2021-11-0036, §10, 2021-11-03].

How It Works

In the base GEAP model, all winning bidders are paid through the FIT-All fund administered by TransCo — costs are socialized across all electricity consumers nationwide. Under the Opt-In Mechanism:

1. A DU voluntarily contracts with a specific GEA winning bidder at that bidder’s GET (offered price)
2. The contracted volume (“Opt-In Capacity”) is carved out of the GEA FIT-All pool — TransCo’s FIT-All petition is reduced accordingly [DC2021-11-0036, §10.1.2–10.1.3, 2021-11-03]
3. The DU charges the GET to its own captive customers as a generation charge — not through the FIT-All [DC2021-11-0036, §10.1.4, 2021-11-03]
4. The RECs from the Opt-In Capacity accrue to the opting-in DU, which may use them toward its own RPS compliance [DC2021-11-0036, §10.1.1, 2021-11-03]

The winning bidder is still paid its offered GET price regardless of the opt-in [DC2021-11-0036, §10.1.1, 2021-11-03].

Policy Rationale

The mechanism was introduced to reduce FIT-All charges to electricity end-users more broadly, and to help DUs meet their supply and RPS obligations simultaneously [DC2021-11-0036, §10 preamble, 2021-11-03]. It converts a socialized cost into a localized one, concentrating costs in the service territory of the DU that benefits from the supply.

CSP Compliance

A GEAP auction (including an Opt-In procurement) satisfies the Competitive Selection Process (CSP) requirement for DUs under the EPIRA [DC2021-11-0036, §13, 2021-11-03]. A DU exercising the Opt-In option does not need to conduct a separate CSP.

Implementing Guidelines

DC2021-11-0036 §10.2 required the DOE to issue specific Opt-In Guidelines within 30 days of the circular’s effectivity, noting that their issuance must not delay the first GEA round.