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Long-Term Renewable Energy and RECs RFP (169)
Renewables RFP (44)
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Long-Term Renewable Energy and RECs RFP
Your Announcement dated September 10, 2010 states that the solar threshold is 6% of 1,400,000MWh, yet HB2606 states that the threshold will be 0.5%. Please explain.
The photovoltaic target to be used in this RFP is based on an assessment by the IPA on how it will comply with Section 1-75 of the IPA Act in the years 2012 and beyond. In addition, which bids are ultimately accepted is a matter that will be approved by the Illinois Commerce Commission. We note that (1) deliveries under this procurement event extend from 2012 to 2032 and that the target for photovoltaics during seventeen (17) of the twenty (20) years of the contract will be at 6%; and (2) the Act requires for the 2012-13 procurement year a target of at least 0.5% so that the Act in no way precludes or renders unusual the setting of a 6% target.
We intend to submit a bid from a new solar PV facility, to be constructed in Illinois and adjoining states. The bidding entity will be a Limited Liability Company (“LLC”). However, we have not yet formed the LLC, and it may not be possible to do so before submittal of the Part 1 Application. The LLC will however be in place prior to the Part 2 Application deadline. Can we submit the Part 1 Application under the future LLC’s holding company name, along with an explanation, then replace with the LLC that will actually be bidding in the Part 2 Application?
Unfortunately, the RFP does not accommodate such a situation. The certifications of the Part 1 Proposal are made by an Officer of the entity that will sign the Long-Term Master Agreement. All information for the preparation of the Long-Term Master Agreement is provided by the Bidder in the Part 1 Proposal so that the Bidder can provide the signed Long-Term Master Agreement along with all necessary documents with the Part 2 Proposal. We note that there are assignment provisions under the Long-Term Master Agreement; see section H of the Confirmation.
If a supplier bids for 15,000 MWh but gets allocated only 12,000 MWh, does he have to build capacity for 15,000 MWh (bacause that is what he indicated in the description of the unit) or he is allowed to build capacity only for allocated amount (i:e 12000 MWh)?
There is no obligation under the contract for the Supplier to build the unit to any specific capacity. The Seller has an obligation to produce each year the Annual Contract Quantity, which applies to both energy and RECs. The Annual Contract Quantity is the quantity selected by the Procurement Administrator and approved by the ICC. The Seller may choose the specific capacity of its unit understanding that its payment under the Long-Term Master Agreement will be the difference between the fixed price and floating price applied to a volume that will be calculating as a percentage of the energy produced by the Project and understanding that the Annual Contract Quantity constitutes a minimum delivery quantity under the contract. A Bidder that has Bids that are selected and approved by the Commission will be permitted but not required to adjust the Applicable Percentage. This will enable the Bidder to configure actual construction to the award.
If a bidder submits multiple bids for a given Project for different MWh quantities, and one of the bid prices is higher than benchmark, are all the bids for that unit disqualified or just the one bid over the benchmark eliminated?
If a Bidder submits multiple Bids and some (but not all) of the Bids are above the benchmarks then the Procurement Administrator will eliminate only those Bids that are above the benchmarks. We note that a Bidder may submit a maximum of three (3) Bids. The first Bid (“Bid 1”) is for the Minimum Annual Quantity. The second Bid (“Bid 2”) is for any incremental quantity up to and including the Intermediate Annual Quantity. The third Bid (“Bid 3”) is for any further quantity incremental to the Intermediate Annual Quantity, up to and including the Maximum Annual Quantity. Bid 3 must be greater than Bid 2 and Bid 2 must be greater than or equal to Bid 1. If the Procurement Administrator selects the Project, the Procurement Administrator may select any integer quantity that is not less than the Minimum Annual Quantity and not more than the Maximum Annual Quantity. The Price Bid is the weighted average of the Bids for the quantity selected.
We represent a solar project outside of Illinois and the adjacent states; is this project eligible to be awarded a solar PPA under this solicitation? The project would meet all other criteria including physical delivery of power to the grid.
A Project is eligible if it is a renewable energy resource under Section 1-10 of the Illinois Power Agency Act regardless of location. However, although a Project may be located outside of the PJM or the MISO footprint, RECs procured through this Long-Term RFP must be transferred from the supplier’s account in PJM Environmental Information System (“EIS”)’s Generation Attribute Tracking System (“GATS”) or in the Midwest Renewable Energy Tracking System (“M-RETS”) to the account of ComEd in the relevant tracking system. Further, the evaluation gives preference to Projects located in Illinois and its adjoining states.
Is the 6% solar target determine from total MWh target of 1,400,000 MWh (84,000 MWh solar) or from the residual (after the 75% wind target) MWh target of 350,000 MWh (21,000 MWh solar)?
The solar target percentage is applied to the total Target for this procurement event of 1,400,000 MWh (and not on the basis of the residual excluding the wind target).
What happens if a bidder submits a Minimum Annual Quantity, a Maximum Annual Quantity, and an Applicable Percentage in a Part 1 Form, but then decides not to submit a (price) bid?
Please note that the Bidder submits a Minimum Annual Quantity, a Maximum Annual Quantity, and an Applicable Percentage in the Part 1 Proposal. The Bidder will have the option to modify the Applicable Percentage and the Minimum Annual Quantity upon submission of its Bids. The Bidder will have the option to reduce the Maximum Annual Quantity (but not to increase it) upon submission of its Bids. There is no penalty for providing a Part 1 Proposal, or a Part 2 Proposal (including an executed Pre-Bid Letter of Credit), and not submitting Bids. A Bidder is not required to submit (price) Bids once it completes the other requirements of the Part 2 Proposal.
When will the Supplier Fee be announced?
The Procurement Administrator will inform Bidders of the amount of the Supplier Fee per MWh no later than 6 PM on the Part 2 Date, which is Friday, September 24. The Procurement Administrator provided an estimate of the Supplier Fee of $0.61/MWh at the Bidder Information Session of September 8, 2010.
If we are working with an investor to build a multi MW DC Solar project in the ComEd service area in Illinois and the project is not far enough along to summit a LOI, will there be future opportunities to bid in another RFP for power and RECs with IPA?
The recent Procurement Plan that the Illinois Power Agency has filed with the Illinois Commerce Commission for the 2011-12 procurement period does not include a Long-Term RFP for Renewable Energy and RECs (although it does include a procurement of RECs for a one-year delivery period). The earliest that another opportunity to bid in a Long-Term RFP for Renewable Energy and RECs could occur would be for the 2012-13 procurement period. Whether such an opportunity will materialize for the 2012-13 procurement period will be known in August 2011.
Is the Supplier Fee estimated at $0.61/MWh a one-time fee levied on winning Bidders, or is it an annual fee?
The Supplier Fee is a one-time fee levied on winning Bidders and is due sixty (60) days after the ICC renders a decision approving the results of the procurement event.
Would a company be able to reduce the Maximum Annual Quantity between Part 2 and final bid submission? As an example to help clarify: If a company submits a maximum annual bid of 10,000 MWh in the Part 2 Form, can that amount be reduced to 5,000 MWh in the final bid?
Please note that the Bidder first submits a Minimum Annual Quantity, a Maximum Annual Quantity, and an Applicable Percentage in the Part 1 Proposal (rather than in the Part 2 Proposal). The Bidder will have the option to modify the Applicable Percentage and the Minimum Annual Quantity upon submission of its Bids. The Bidder will have the option to reduce the Maximum Annual Quantity (but not to increase it) upon submission of its Bids. Please see Paragraph V.5.5 of the RFP Rules.
For avoidance of doubt, can you confirm that when and if there is a crossover point between the Forward Energy Price Curve (“FEPC”) and the Average Contract Price that this denotes a period of time where the imputed REC cost is zero. Therefore, at contract execution the assumption made by procurement process is that there is no imputed cost of RECs and no charge against the Budget for renwables. So, when the FEPC is reset, and if it is lower than previous FEPC an imputed value for RECs would be created and potential to go over budget occurs at that time.
The relevant excerpt from Appendix K, which was approved by the ICC, is below. Items that go specifically to your question are bracketed by ***. “Application to the RPS. The IPA intends to count the REC portion of the procurement toward the RPS requirements and bill-impact cap. To quantify the annual cost of the RECs for the purpose of the RPS, the Procurement Administrator, in consultation with the IPA, ICC Staff, and the Procurement Monitor shall develop a confidential 20 year forward price curve for energy at the load zone, including the estimated magnitude and timing of the price effects related to federal carbon controls. Each forward curve shall contain a specific value of the forecasted market price of electricity for each annual delivery year of the contract. ***In every delivery year, the imputed REC component of expenditures under the bundled renewable contracts will be determined as the difference between the expected annual contract expenditures for that year (based on the winning target Contract Quantities and Contract Prices) and the total target Contract Quantities times the forward price curve for each respective load zone for that year. For purposes of determining the maximum expenditure allowed under the RPS bill-impact cap, the forward price curve values will be fixed over the life of the contracts and cannot be subsequently changed or updated, except as follows: if, in any year, the expected annual contract spend is lower than the total Contract Quantities times the forward price curve value for that year, the forward price curve will be updated by the Procurement Administrator, in consultation with the IPA, ICC Staff, and the Procurement Monitor using then currently available price forecast data. If the expected annual contract spend is still lower than the total Contract Quantities times the updated forward price curve value for that year, the REC portion of the bundled bids will essentially become a credit, and the Commission will determine at that time, how to account for that credit in the determination of the bill-impact cap.***” Our understanding is that the imputed REC component of expenditures from the 2010 Long-Term RFP (“Imputed Long-Term Cost”) is calculated as follows: Imputed Long-Term Cost in Delivery Year T: (average fixed price from Long-Term RFP for Delivery Year T) x (winning contract quantities) – (price from forward price curve in Delivery Year T) x (winning contract quantities) = (average fixed price from Long-Term RFP for Delivery Year T – price from forward price curve in Delivery Year T) x (winning contract quantities) This calculation provides an Imputed Long-Term Cost in each Delivery Year of the Long-Term Master Agreement. (A “Delivery Year” is from June 1 of a year to May 31 of the following year). The average fixed price from the Long-Term RFP can be determined on the basis of the winning bid prices and a fixed escalation factor of 2%. The price from the forward price curve is determined by the Procurement Administrator ahead of this Long-Term RFP. Thus, at contract execution, the Imputed Long-Term Cost for the awarded Contract Quantities can be calculated for each Delivery Year of the contract until the Delivery Year where such calculation would require an update to the forward price curve, which we discuss in more detail below. The Renewable Resource Budget (“Budget”) for each Delivery Year is a limit on the amount that may be spent in a given Delivery Year on renewable resources in accordance with the Illinois Power Agency Act (“Act”). The Budget is calculated in accordance with Section 1-75(c) of the Act. According to the most recently filed IPA procurement plan being considered by the Commission, starting in 2012, the Budget in a Delivery Year is calculated as $2.158/MWh times the forecasted sales for that Delivery Year. (The amount per MWh is calculated as the greater of: (i) 2.015% of the amount paid by eligible retail customers during the year ending May 31, 2007, which is 2.015% of $93.88/MWh; and (ii) the incremental amount that could be paid by eligible retail customers in 2011 compared to 2010, which is $2.158). The forecasted sales for a Delivery Year will be determined in the prior Delivery Year and the Budget will be definitively calculated at that time. In the past, the Budget has been part of the Procurement Plan filed each year by the IPA and approved by the Commission. Thus, although the Imputed Long-Term Cost for each Delivery Year is in principle known at contract execution, the Budget is not, as it depends on sales for the Delivery Year, forecasted as of the prior year. How the Imputed Long-Term Cost for each Delivery Year compares to the Budget, and whether the Imputed Long-Term Cost is less than, equal to, or greater than the Budget, is not known at contract execution, and will need to be determined on a year-by-year basis. Whether an update to the FPC is required is determined by comparing the Imputed Long-Term Cost to zero (not comparing the Imputed Long-Term Cost to the Budget). The circumstances that trigger an update to the FPC are specified by Appendix K (see excerpt above). The FPC is updated if the Imputed Long-Term Cost is less than zero, meaning that the forward price for a given Delivery Year exceeds the average fixed price from the Long-Term RFP for that same Delivery Year. Once the FPC is updated, the Imputed Long-Term Cost would be re-calculated using the updated FPC. The Imputed Long-Term Cost may be positive or negative after the update to the FPC. If the updated FPC results in a positive Imputed Long-Term Cost, it will be determined at that time whether this Imputed Long-Term Cost is less than, equal to, or greater than the Budget for that Delivery Year. If the updated FPC continues to result in a negative Imputed Long-Term Cost, meaning the that the Imputed Long-Term “Cost” is essentially a “Credit” rather than a subtraction from the Budget, the Commission will at that time determine how that credit will enter into the determination of the Budget. Returning to the specifics of your question, it appears to us that you believe that the “imputed value for RECs” could only potentially go over the Budget once the “FEPC” is reset. This is incorrect, as explained above.
Can you direct us to the place in the confirm or ISDA that references Dodd-Frank and the ability of ComEd to terminate the contract if the contract is impacted by this legislation?
Please see Section F of the Confirmation under “Additional Provisions”. The reference is to legislation in general and does not mention Dodd-Frank in particular:
“F. Federal Law and Regulations If federal law or regulations related to over-the-counter derivatives are adopted or implemented that significantly affect the benefits and burdens that are reflected in this Agreement or in the December 28, 2009 Order issued by the Illinois Commerce Commission in Docket No. 09-0373 (for example, regulations that would require margining of Buyer), the Parties shall use commercially reasonable efforts to reform this Agreement in order to give effect to the original intentions of the Parties regarding the appropriate benefits and burdens to each Party. In the event that the Parties, through the exercise of reasonable diligence and effort, are unable to reform the Agreement in the manner described on a mutually acceptable terms, then the Agreement shall be deemed to be terminated and shall be of no further force and effect. Upon such termination, neither party shall have any further liability to the other; provided, however, that any amounts then due under the Agreement will not be affected by such termination.”
Please note that this provides both parties with the same termination rights.
Are comments on the post-bid LOC due on September 13, along with the Part 1 form, or can they be submitted after this date?
The deadline for the Submission of Part 1 Proposals is 12PM (noon) CPT on Monday, September 13, 2010. The Part 1 Proposal should include three (3) hard copies of the Part 1 Form with original signatures as well as an electronic Part 1 Form and all other documents required by that Part 1 Form. Comments on the Post-Bid Letter of Credit are optional; however, if you choose to submit such comments, they are due with the Part 1 Proposal on September 13, 2010. You are strongly encouraged to submit the Part 1 Proposal by the deadline even if the Part 1 Proposal is incomplete. You will be provided with additional time to cure any deficiencies if the Part 1 Proposal is received by the deadline; however, no late Part 1 Proposals will be accepted. Part 1 Proposal materials must be sent to the following address: NERA – Procurement Administrator 2010 ComEd Long-Term RFP 875 North Michigan Ave, Suite 3650 Chicago, IL 60611
Is the certification by the Officer regarding development status in the Part 1 Proposal sufficient for purposes of qualification and potentially winning the bid? Is any weight assigned to development status of the units while evaluating the Bids?
The certification required in the Part 1 Proposal is sufficient for purposes of qualification and winning in the RFP. The development status of the projects, as well as all other qualification criteria, are assessed on a pass or fail basis so as to allow an evaluation of the Bids on the basis of price and the priorities of the Act.
If a legal entity is bidding for multiple units for the same project (same county area), does it have to individually detail the development status of each separate unit, or would the development status of the overall project suffice?
The certification required in the Part 1 Proposal must be provided for each Project as defined in the RFP Rules (i.e., each generation unit that has a separate revenue quality meter and that would be the object of a separate Confirmation under the Long-Term Master Agreement).
Under 'Instructions for Proposal,' it mentions that we must manually insert the name of the Project on each page of the Part 1 Form. Does this mean that we must literally handwrite the name on the page?
The instruction to “manually insert” the name of the Project refers to the fact that the form will not automatically fill out the name of the Project if you insert the name of the Project in a single field. The name of the Project must be inserted on every page and we expect Bidders to type in the name of the Project in the field provided.
Can you help us understand the circumstances that could prevent a Bidder from making the certification in the Part 1 Proposal that:
“the Bidder has no pending or, to its knowledge, threatened against it, action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency, or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of the Long-Term Master Agreement or its ability to perform its obligations under the Long-Term Master Agreement or such Credit Support Document”?
Is this certification required at the Part 1 Proposal stage?
We suggest that you consult with your counsel as to which situation could make you unable to make this certification. Please see the ISDA Master Agreement. The certification that you quote above is required upon qualification to ensure that you can make the representation in Paragraph 3(c) of the ISDA Master Agreement. There can be no modifications to the Long-Term Master Agreement and thus no exception to this particular certification, which is required upon qualification.
Will the June 1, 2012 in-service requirement be different for wind resources than it will be for solar photovoltaics?
There is no in-service date requirement per se. The June 1, 2012 is the start date for performance under the Long-Term Master Agreement. This date is fixed and applies equally to all resource types.
Is the target for solar photovoltaics a percentage or a fixed number of MWhs (carve-out)? Has this target been determined?
The target is a percentage. The evaluation of Bids and the selection of renewable energy resources first give priority to cost effectiveness, second to resource type, and last to location. On September 10, 2010, it was announced that for renewable energy resources of a given price and a given location, renewable energy resources from wind resources and solar photovoltaic resources are selected over other renewable energy resources eligible under the Act, subject to a 75% threshold for wind and to a threshold of 6% for solar photovoltaic.
We note that the threshold of 6% is not a “carve-out” in the sense that there is no specific number of MWh for which only solar photovoltaic resources can be purchased. Under the selection criteria specified in the Illinois Power Act, including the use of benchmarks, it is possible for the entire 1,400,000 MWh to be purchased without the selection of solar photovoltaic resources up to the threshold.
Where can I send a question regarding this RFP when it requires the expertise of the IPA or the Commission Staff?
Please submit any question you may have regarding the Long-Term RFP through the RFP Web site: http://www.comed-energyrfp.com/questions.asp Should we require the expertise of the IPA, the utilities, the Procurement Monitor, or the Commission Staff, we will contact such a person on your behalf and provide a response by email.
Is a list of entities who attended the Bidder Information Sessions held August 30 to September 1 publically available?
We did not obtain the consent of attendees for the release of their names or contact information or for the release of the fact that they attended the workshops. We suggest that you rely on the service list for the proceeding in front of the Illinois Commerce Commission held concerning the Procurement Plan including this Long-Term RFP, which can be found here: http://www.icc.illinois.gov/docket/ServiceList.aspx?no=09-0373
Are separate legal entities operating under a single holding company considered individual Bidders? How does the Proposal submission process apply to such Bidders?
The Procurement Administrator will consider on a case-by-case basis any situation that was not specifically contemplated by the RFP Rules and thus we cannot offer a definitive response to your question. We offer this response as indicative only. It is not necessarily the case that different legal entities are considered separate bidders. In a situation where separate legal entities operate under a single holding company, for example, the Procurement Administrator expects to consider the holding company (or the group of subsidiaries) to form a single Bidder. Bidders are permitted to submit multiple bids and the intent is not to limit a holding company or group of project-specific entities from doing so because of the corporate structure of the Bidder. It is expected that the Bidder will be required to:
Is a holding company offering bids for multiple projects owned by different subsidiaries in violation of the RFP rules?
The Procurement Administrator will consider on a case-by-case basis any situation that was not specifically contemplated by the RFP Rules upon receiving the Part 1 or Part 2 Proposal and thus we cannot offer a definitive response to your question.
We offer this response as indicative only. Paragraph IV.3.7 of the RFP Rules requires that the Officer of the Bidder certify that the Bidder is not part of a bidding agreement, a bidding consortium, or any other type of agreement with another Bidder related to bidding in this RFP. In the circumstances that you present, the holding company (or the group of subsidiaries) would be a single Bidder. The Officer from the holding company (or similar Officer for the group of subsidiaries) would make this certification with respect to other Bidders in the Long-Term RFP (other than the legal entities under the holding company that would be submitting Bids for Projects in this RFP). Bidders are permitted to submit multiple bids and the intent is not to limit a holding company or group of entities from doing so because of the corporate structure of the Bidder.
In general, if a certification cannot be made, a Bidder may state that this is the case and provide the Procurement Administrator with an explanation. The Procurement Administrator may request additional information before determining whether supplemental or substitute certifications can be provided to fulfill the requirement of the Part 1 or Part 2 Proposal or whether the inability to make a particular certification would lead to disqualification. The Procurement Administrator will ensure that any such supplement or substitute certifications fulfill the requirements of the RFP Rules and that the inability to provide the certifications is not a circumvention of the intent of the RFP rules, but result from the corporate structure used for valid business reasons.
There was discussion on the impact of the Dodd-Frank legislation at the recent workshops.
One suggestion considered during the Ameren workshop was to modify the product from a financial settled swap to a physical sale and purchase. Has this been adopted by ComEd or Ameren? If so, can you please specify how this would be implemented?
Please review the final Long-Term Agreement posted on September 7, 2010. In particular, please see Section F of the Confirmation under “Additional Provisions”. The provision references legislation in general and is applicable to Dodd-Frank legislation.
This provision does not modify the product definition from a financially settled swap to a physical sale and purchase. We are unaware whether the Ameren contract includes such a provision and cannot opine on how it would be implemented. We note that behind the meter generation, i.e., generation delivered neither to a transmission nor to a distribution system, does not qualify for the Long-Term RFP. However, any generator that delivers its output to a distribution utility qualifies, whether it is existing or new.
Am I able to provide the Part 1 Proposal to the Procurement Administrator via email on the Part 1 Date with the original hard copies to arrive the following day?
The deadline for the Submission of Part 1 Proposals is 12PM (noon) CPT on Monday, September 13, 2010. The Part 1 Proposal should include three (3) hard copies of the Part 1 Form with original signatures as well as an electronic Part 1 Form and all other documents required by that Part 1 Form. You are strongly encouraged to submit the Part 1 Proposal by the deadline even if the Part 1 Proposal is incomplete. You will be provided with additional time to cure any deficiencies if the Part 1 Proposal is received prior to the deadline; however, no late Part 1 Proposals will be accepted.
Section 1-10 of the Illinois Power Agency Act states the following: "For purposes of this Act, landfill gas produced in the State is considered a renewable energy resource." Does landfill gas produced outside Illinois qualify as a renewable energy resource?
Section 1-10 of the Illinois Power Agency Act (20 ILCS 3855/1-10) that defines "Renewable Energy Resources" states that landfill gas only qualifies as a renewable energy resource if it is in the State of Illinois. Landfill gas from other states and/or adjoining states is not considered a renewable energy resource under the Act (and thus for this RFP).
Please also note that while qualified solid waste energy facilities ("QSWEF"), within the meaning of section 8-403.1 of Illinois Public Utilities Act, are eligible to participate in ComEd's Renewables RFP, such facilities will no longer be eligible to sell electricity to ComEd pursuant to the provisions of section 8-403.1 (see 220 ILCS 5/8-403.1(m)) should any of the bids from such facilities be selected and accepted by the Illinois Commerce Commission.
Are Bidders able to modify the Maximum Annual Quantity specified in their Part 1 Proposal?
Yes, according to Section V.5.5 of the RFP Rules, the Bidder may, in the Bid Form, modify these aspects of the Proposal submitted with the Part 1 Proposal as follows. A Bidder may (i) modify the Applicable Percentage; (ii) decrease the Maximum Annual Quantity; and (iii) modify the Minimum Annual Quantity. If a Bidder modifies the Applicable Percentage, the Bidder will be required to resubmit the certification of Paragraph IV.2.6 with its Bids.
How is the Floating Price defined under the Long-Term Master Agreement?
The Floating Price under the Long-Term Master Agreement is the Day-Ahead Locational Marginal Price (“LMP”) at the ComEd zone. The Confirmation to the Long-Term Master Agreement provides the precise node, which is Pnode ID 33092371. The Floating Price will be available on the PJM Day Ahead Energy Market page under the headings "Daily Day-Ahead LMP".
Please clarify the conditions upon which ComEd can draw on the Pre-Bid Letter of Credit. In particular, will ComEd draw on the Pre-Bid Letter of Credit upon the following two actions by bidder: 1) not providing Bids; and 2) providing Bids, getting selected, and failing to execute the contract or transaction confirmation after its Bids have been approved by the ICC? Also, are there other damages besides the amount of the Pre-Bid Letter of Credit should the bidder fail to execute a transaction confirmation after its Bids have been approved by the ICC?
There is a difference between (1) not providing Bids; and (2) providing Bids, getting selected, and failing to execute the contract. There is no penalty for providing a Part 2 Proposal, including an executed Pre-Bid Letter of Credit, and not submitting Bids. A Bidder is not required to submit Bids once it completes the other requirements of the Part 2 Proposal. In the Part 2 Proposal, the Officer of the Bidder certifies and undertakes that if the ICC approves the Bidder’s Bids, a binding and enforceable obligation arises under the terms of the Long-Term Master Agreement to execute the Confirmation for the Project for which the Bidder’s Bids are approved by the ICC. The Officer further certifies that the Bidder’s Bids constitute a binding and irrevocable offer to deliver to ComEd the Annual Contract Quantity of RECs associated with the energy generated by the Project at the Price Bid and under the terms of the Long-Term Master Agreement. The Bidder will, at that point, have signed the Long-Term Master Agreement and will have provided all necessary signed documents of the Long-Term Master Agreement. If the Bidder fails to proceed to execute the Confirmation, or to provide all documents required by the Long-Term Master Agreement in a form acceptable to ComEd, or to post collateral as required by the Long-Term Master Agreement, ComEd may draw upon the Pre-Bid Letter of Credit. Further, the failure of the Bidder to proceed may be Event of Default under the contract. If an event of default were to occur ComEd would be entitled to declare an early termination event and pursue all legal remedies including the assessment of an Early Termination Payment. We suggest that you review the Agreement with Counsel as we can not provide legal advice as to the exact consequences and liability.
Does energy need to be delivered to the grid under the Long-Term Master Agreement or it possible to deliver to the distribution system? Would a facility under a ComEd POG rate be precluded?
Is there one Part 1 Proposal per Project or per Bidder?
There is one Part 1 Proposal per facility or Project. A Bidder may submit multiple Part 1 Proposals, one for each of multiple facilities or Projects.
Are there any concerns that the use of the ISDA Master Agreement may affect participation in the RFP?
The tailoring of the ISDA Master Agreement conforms with Appendix K (which are the Supplemental Recommendations filed by the Illinois Power Agency and approved by the Illinois Commerce Commission). We are unaware that this form of contract would affect participation in the RFP.
Is the ISDA Master Agreement a contract for physical deliveries of energy? If so, will there be a Power Annex attached to the ISDA Master Agreement?
This contract is for a fixed for floating price energy swap, not for physical deliveries of energy, and thus the Power Annex will not be included with the ISDA Master Agreement. This contract will however require delivery of associated RECs in the ComEd GATS and M-RETS accounts.
What is the Pnode ID used for purposes of determining the float price under the contract?
This information is provided in the Sample Confirmation to the ISDA Master Agreement. The Pnode ID is the ComEd Zone in the day-ahead market, which is 33092371.
The Illinois Act has a 75% wind target for the procurement of renewable resources. Will this resource type preference also apply to this long-term procurement?
Yes. Please see Appendix K, the Supplemental Recommendations filed by the Illinois Power Agency as part of the procurement plan for this long-term renewables RFP (page 2):
“The procurement process for Long-Term PPAs, on a stand-alone basis, will be designed and conducted in accordance with Section 16-111.5 of the Public Utilities Act and Section 1-75 of the Illinois Power Agency Act and the preferences set forth in Section 1-75(c) of the Illinois Power Agency Act shall be applied to the selection process (e.g., “[t]o the extent it is available, at least 75% of the renewable energy resources . . . shall come from wind generation;” it shall be “cost-effective” as defined in that Section; the locational preferences shall be applied as set forth in that Section). 20 ILCS 3855/1-75(c).”
Under the ISDA Master Agreement, will ComEd be posting margin?
No. ComEd will not be posting margin. Please see Appendix K, the Supplemental Recommendations filed by the Illinois Power Agency as part of the procurement plan for this long-term renewables RFP (page 6). Appendix K states that the contract will be a non-margining contract as long as the Contract Value exceeds the Around-The-Clock Value, which defines the circumstances under which ComEd would post margin. The Commission approved Appendix K as part of its Order on this procurement event.
What percentage of solar photovoltatics will be procured? What is the location priority for this procurement event?
There will be a target percentage of solar photovoltaics that will be announced as soon as practicable. Starting on June 1, 2011 (and thus during the period covered by the ISDA Master Agreement) the locational preference is for Illinois and its adjoining States over other States. The adjoining states are Wisconsin, Iowa, Missouri, Kentucky, Indiana and Michigan. Please note that for this procurement there is no longer a specific locational preference for Illinois alone.
For solar energy, are behind-the-meter installations able to bid in this RFP?
The draft ISDA Master Agreement requires that the energy be delivered to the grid. It is our understanding that behind-the-meter installations would not be able to meet this requirement.
Do all bidders have to provide a Pre-Bid Letter of Credit or does it depend on the size of the Project?
All Bidders are required to post a Pre-Bid Letter of Credit in an amount of $0.50 times the Annual Contract Quantity times 3. Please see Section V.2 of the RFP Rules, posted here: http://www.comed-energyrfp.com/ltdocuments.asp
Posted collateral under the ISDA Master Agreement must be in the form of cash or a letter of credit. Will you accept a corporate guaranty?
There is no unsecured credit under the draft ISDA Master Agreement and the use of corporate guaranties is not contemplated under the ISDA Master Agreement.
When are the Proposals due?
It is anticipated that the Part 1 Proposal will be due at noon (Central Prevailing Time or “CPT”) September 13, 2010, that the Part 2 Proposals will be due at noon (CPT) on September 24, 2010, and that the Bids will be due between 10 AM and noon on September 30, 2010.
Is the amount required for the Pre-Bid Letter of Credit $100,000?
No. Our understanding is that the RFP for the Ameren Illinois Utilities requires a pre-bid security amount of $100K. The RFP for ComEd requires a pre-bid security in an amount of $0.50 multiplied by three times the Annual Contract Quantity up to a maximum of $2.1 million. Please see Section V.2 of the RFP Rules.
When will the Pre-Bid Letter of Credit be available in Word format? We need this document to prepare our Proposal.
The Pre-Bid Letter of Credit will be posted in Word format no later than September 7, 2010. However, we understand your concern and we are in process of arranging for an earlier posting. We will advise you of an earlier posting if it occurs.
When will the Part 1 form be available in Word format so that bidders can prepare their Proposals?
We will issue the Part 1 Form in Word format on September 7, 2010, and earlier if at all feasible. You can find the calendar here: http://www.comed-energyrfp.com/calendar.asp
Was the accelerated schedule adopted?
The accelerated schedule has not been adopted and the final documents are expected to be available on September 7, 2010. The schedule is posted here: http://www.comed-energyrfp.com/calendar.asp
Please confirm whether or not the statutory cap on consumer rate increases in connection with the purchase of renewables is applicable to the amounts paid under the Long-Term Renewable Energy and RECs RFP. If it is applicable, how will it be applied?
On November 9, 2009, the IPA filed Supplemental Recommendations for the Procurement Plan supplementing or modifying the IPA’s prior proposal to procure energy and renewable energy credits on a long-term basis. The Illinois Commerce Commission ("ICC") approved Appendix K. The Motion for leave to file the Supplemental Recommendations states: "The REC portion of the procurement will count toward the RPS requirements and bill-impact cap set forth in Section 1-75(c) of the Illinois Power Agency Act. Id." (p. 2, item 6c).
The manner in which the bill-impact cap will be applied is specified in Appendix K, under the item "Application to the RPS" (pp. 2-3).
Further, the Procurement Administrator will announce shortly a Budget for the long-term RFP. The evaluation and selection of bids in no case will result in the procurement of an aggregate quantity that exceeds the Target of 1,400,000 MWh annually or that combine to cost more than the Budget.
Do you expect that a prospective bidder that provides project information may not continue the process by providing a bid in the form of a price because the final contract form will not be available before the date to provide project information?
We expect the final documents to be available on September 7, 2010, one day before the Part 1 Window opens and Bidders are invited to provide project information.
When will the Part 1 and Part 2 Windows open? When will the final documents be available?
The Part 1 Window is from September 8, 2010 to September 13, 2010. The Part 2 Window is from September 21, 2010 to September 24, 2010. Final RFP documents and the Master Agreement are expected to be issued on September 7, 2010. The calendar for the ComEd Long-Term RFP can be found here: http://www.comed-energyrfp.com/calendar.asp
The draft documents require suppliers to put a firm Annual Contract Quantity and a firm Applicable Percentage in the Part 1 form. It is difficult for suppliers to commit to a quantity at such an early stage in the process. Will you consider revising the RFP documents to allow suppliers to submit a quantity with their bid?
Although we will require that the Bidder specify the Annual Contract Quantity and Applicable Percentage in the Part 1 Form, we anticipate revising the RFP documents to allow the bidder to modify or amend the Applicable Percentage and the Annual Contract Quantity on the bid form. Such revisions will be reflected in the final RFP documents expected to be posted on September 7, 2010.
Will suppliers be able to bid a minimum quantity (as well as target quantity) of megawatt hours per year?
The Draft RFP Rules, posted on August 24, 2010, provide that a supplier may specify a Minimum Quantity for a Project (see Paragraph IV.3.3). The Minimum Quantity would represent the smallest quantity of RECs and associated energy for which the Bidder is willing to enter into the Long-Term Master Agreement for the Project at the price specified in the Bid.
Our understanding is that the base ISDA Master Agreement does not contain a definition for renewable energy credits. But the Sample Confirmation references the ISDA Master for both the energy swap and the REC purchase and sale. In which document is the REC product defined?
Please see the definition section of the Confirmation, which states: “’REC’ means a renewable energy certificate, credit or other transferable indicia indicating the generation of a MWH of energy from a Renewable Energy Resource, including all of the environmental attributes associated with the generation of that electricity.”
What is to be included in the Part 1 Proposal?
The items to be included in the Part 1 Proposal are described in Article IV of the Draft RFP Rules as well as in Appendix 2 to the RFP (the Part 1 Form). Both documents were posted to our web site on August 24, 2010.
Does the ComEd Long-Term RFP Workshop to be held on August 31, 2010 conflict with the IPA’s 2011 Plan Workshop on August 31st?
A workshop for public comments on the Draft 2011 IPA Procurement Plan and a workshop to discuss the Draft ISDA Master Agreement for the 2010 long-term renewable energy and RECs RFP are both being held on August 31, 2010. The first workshop will take place in Springfield while the second workshop will take place in Chicago. We apologize for any inconvenience caused by both workshops being held on the same day.
Can you confirm that the intent of the ISDA Master Agreement is to designate each renewable generation source that will be providing service under the agreement?
The intent is for each generating unit (tied to a revenue quality meter) to be identified in a separate confirmation should one bidder have multiple bids for multiple generating units approved by the Commission. The remainder of your submission appears to be comments rather than questions. We will consider your comments along with other comments on the Draft ISDA Master Agreement.
If a bidder has or will have more than one generating project with the same technology, all located within Illinois, will the bidder be permitted to identify two or more such projects in a single bid and then, if selected as a winning bidder, meet the delivery obligation from the output of one or more of the projects identified in the bid?
A bidder that has more than one generating project (each project being tied to a revenue quality meter) will submit one Proposal for each generating project. Such a bidder also will submit one Bid for each generating project, identifying for that particular generating project the bid price, the Annual Contract Quantity, the Minimum Quantity, and the Specified Percentage. If the Procurement Administrator recommends one or more Bids to the Commission and the Commission approves these Bids, the bidder would execute Confirmations under the ISDA Master Agreement for the particular generating projects for which Bids were approved. The bidder will not be permitted to identify the projects after the bids are approved.
Is the "Resource Factor" (page 1 of Schedule 2 to Credit Support Annex) the same as the "Resource Value" (page 1 of Confirmation Schedule)?
Yes, resource factor is the same as resource value; thank you for bringing this inconsistency to our attention. The Procurement Administrators will calculate the resource factors and announce these to the bidders in advance of bidding.
Is there just one price benchmark for all resource types, or is there a separate benchmark for solar?
The Procurement Administrator, in consultation with the IPA, the Procurement Monitor, and the ICC Staff will develop confidential benchmarks to protect consumers that will be approved by the ICC for the resources procured under this solicitation. The benchmarks will be used to evaluate bids and to reject bids that exceed the benchmarks. Additional information regarding the benchmarks is confidential.
Is there a conference call number for the workshops?
The workshops are in-person meetings.
What are the times and location of the Chicago Workshops on August 30-31 and September 1, 2010 for the Long-Term Renewable Energy and RECs RFP?
The Long-Term Renewable Energy and RECs RFP instruction I.3.2 requires applicants to submit in Microsoft Word format, but the document posted is in Adobe. Can you please forward the requisite documents in Word so we can insert the appropriate information?
The Microsoft Word version of the Part 1 Form will be provided no later than September 7, 2010 and earlier if feasible.
Is its true that ComEd will not hold collateral in the form of cash under the ISDA Master Agreement? Or is it that ComEd will not post collateral under the ISDA Master Agreement? For cash collateral provided to ComEd, please confirm if there is an option for the collateral to be held either by ComEd or by its custodian?
You may be referring to a statement made during the bidder information call that ComEd will not post collateral under the contract. Only the Seller is required to post security under the terms of the Draft ISDA Master Agreement. If the Seller chooses to post collateral in the form of cash, under the terms of the Draft ISDA Master Agreement, the Seller has the option for the cash to be held by ComEd or by its Custodian. If cash is held by ComEd, no interest is paid or fees collected. If cash is held by the Custodian, ComEd will pay to or collect from the Seller the amount of interest net of all fees. ComEd would collect from the Seller if fees exceed the amount of interest. Please see section (g) of Paragraph 13 of the Collateral Support Annex. For its Custodian, ComEd will use a Qualified Institution meeting the requirements as defined in Paragraph 13 to the Credit Support Annex section (o). This institution will be a large commercial bank.
Will the Seller under the ISDA Master Agreement have to post three-years worth of performance assurance as soon as the ISDA Master Agreement is executed?
Under the ISDA Master Agreement, ComEd may require the Seller to provide performance assurance for the amount of the Seller's exposure. The Seller's exposure includes the energy exposure as well as the REC exposure. The REC exposure is equal to $5 multiplied by three times the Annual Contract Quantity. ComEd intends to make a request for the REC exposure by noon on the business day following the day the Confirmation is fully executed. The Confirmation is expected to be fully executed no later than three business days after an approval by the ICC of the results of the procurement event for long-term renewable energy and RECs. Following such a request, the Seller must post the required collateral by the close of business on the next business day.
If a supplier wins a contract for unit "A", will it be able to assign the obligation to unit "B" some time during the term of the contract?
The transaction contemplated by the contract encompasses two items: 1) a fixed price for floating price energy swap; and, 2) the delivery of RECs, both tied to the production of the generating unit identified in the Confirmation. There are no provisions that would allow the assignment to another generating unit during the term of the contract. Please note that there is currently a comment process on the Draft ISDA Master Agreement and you are free to propose a provision to this effect as a comment. The invitation to comment on the contract is posted here.
Does a bidder need to be able to point to a specific project from which it will generate the RECs, or can it provide them from the market?
Yes, you need to be able to point to a specific project. The transaction contemplated by the contract encompasses two items: 1) a fixed price for floating price energy swap; and, 2) the delivery of RECs, both tied to the production of the generating unit identified in the Confirmation.
Is the Microsoft Word version of the ISDA Master Agreement posted in order to submit comments?
The contract is posted to the Long-Term Renewable Energy and RECs Documents pageunder the heading ISDA Master Agreement (DRAFT) (August 13, 2010). Your proposed changes should be incorporated in the Schedule to the Master Agreement, Paragraph 13 of the CSA, Schedules 1 and 2 of the CSA, or in the Sample Confirmation, all of which contain the specific terms of the contract tailored for this transaction. All of these are posted as Microsoft Word documents.
In what format should comments to the proposed ISDA Master Agreement be submitted?
The exclusive method for submitting comments is electronically in Microsoft Word with tracked changes (redline markup of a document). You are strongly encouraged to provide an accompanying document with explanatory notes or to add an explanation beside each tracked change. Please submit your comments by email to the Procurement Administrator at pa@ComEd-EnergyRFP.com. Please provide phone and email contact information in the event that clarification is needed regarding your comments. More information on the comment process is available in our invitation to provide comments, which is posted to the Long-Term Renewable Energy and RECs Documents page.
Is it correct that the transaction is with margining by generators only under the draft Master Agreement used for the ComEd Long-Term RFP?
That is correct.
Would ComEd consider a REC-only fixed price offer?
ComEd may not consider a REC-only fixed price offer. The Procurement Plan approved by the Illinois Commerce Commission specifies that the transaction will be for renewable energy and RECs. It also specifies that a single bundled price will be bid for both energy and RECs.
Will the Long-Term RFP have a Solar REC component? If yes, what is the anticipated target? What is the anticipated contracting date?
The anticipated start of delivery under contracts from the Long-Term RFP is anticipated to be June 1, 2012. The Illinois Power Agency Act was amended so that a specified amount of renewable energy resources would be procured from photovoltaics starting in 2015. Bill HB6202, expected to become law, would further amend this provision to allow for a ramp-up to the photovoltaic requirement starting in 2012. The Commission Order regarding this Long-Term RFP provides that it will be conducted in accordance with the preferences of the Illinois Power Agency Act. The Draft Long-Term RFP is expected to be posted on August 24, 2010 and the documents will at that point provide information regarding the way in which the preferences of the Illinois Power Agency Act will be recognized in the Long-Term RFP, including any preferences for solar.
Would a project that comes on line in the fourth quarter of 2012 be eligible to offer into this RFP 40,000 RECs in the first year and 100,000 RECs in each subsequent year of the contract?
The Draft Long-Term RFP is due to be released on August 24, 2010 and would set out the conditions for eligibility.
We also draw your attention to the Draft ISDA Master Agreement, which was posted on August 13, 2010. The Draft ISDA Master Agreement provides for a constant quantity of energy and associated RECs in every year of the contract. The Draft ISDA Master Agreement addresses potential short-falls in RECs and energy in Paragraphs 3 and 4 of Section B of the Confirmation.
Is any information available regarding the workshops scheduled in Chicago?
The workshops are currently expected to be held on August 30, August 31, as well as September 1 in Chicago. It is expected that the workshop on August 30 will be a bidder meeting on the terms of the Long-Term RFP for both the ComEd and Ameren portfolios and it is expected that the meeting would start early in the afternoon. This tentative schedule is subject to availability of a suitable venue and we expect to confirm the schedule shortly. Please stand by for an announcement early in the week of August 16.
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