7. Should There be a "Small LSEs" Exception?

Several parties, including those advocating a minimum quantity of zero, raise the concern that compliance with the § 399.14(b)(2) contracting requirements would be too difficult for smaller LSEs, thus warranting an exemption from the requirements. Pilot Power also identifies the specific issue that small LSEs seeking to enter into long-term contracts may not be deemed credit-worthy customers by the generator, given the large amount of money involved over the life of a long-term contract.

While we appreciate these concerns, we are unwilling to create a blanket "small LSE" exemption to the requirements of § 399.14(b)(2). The category of "small LSE" is too hard to define to be reasonable to use in this context. Pilot Power's suggestion of a definition based on "MW of summer peak" illustrates the difficulty: potentially, each year the members of the "small LSE" group could change as their loads change. This would put too much focus on determining membership in the category, to the detriment of meeting the contracting goals of § 399.14(b)(2). Thus, we decline to adopt a small LSE exception.