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Under the Long-Term Master Agreement, each hour of a month is used to calculate the payment. The floating price is compared to the fixed price hour by hour to calculate the payment under the Long-Term Agreement. In each hour, the difference between the fixed price and the floating price is applied to the net output of the Project times the percentage specified by the seller. The volumes used for the calculation are the volumes that are metered and delivered to a transmission system or to a distribution system. For this purpose, the seller provides to ComEd hourly-integrated generation meter data in a useable electronic form from a revenue quality meter that satisfies the requirements of the regional transmission organization, transmission provider or distribution company. The amounts thus calculated for each hour are added to obtain the monthly payment. If the difference is positive (the fixed price exceeds the floating price on a weighted average basis) then the utility pays the seller this difference. If the difference is negative (the floating price exceeds the fixed price on a weighted average basis) then the seller pays the utility the difference. However, ComEd does not “purchase power”: the amount of energy generated by the Project is used to settle the contract but ComEd does not take title to the power and the energy is not delivered to ComEd.9/10/2010, in Long-Term Renewable Energy and RECs RFP.
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.
The amount of energy produced by the Project is used for purposes of the settlement. The energy must be delivered to a transmission system or an electric utility distribution system. ComEd does not take title to the energy and the energy is not delivered to ComEd. The Bidder would be expected to sell the energy in a regional transmission organization market or to sell the energy to a third-party on a bilateral basis. However, please note that the Bidder will be required to certify in the Part 1 Proposal and on the Bid Form that the Project is not under a long-term power purchase agreement for the percentage of the net output bid in the Long-Term RFP.9/10/2010, in Long-Term Renewable Energy and RECs RFP.
Under the Long-Term Master Agreement, the Seller provides ComEd with a fixed price for floating price swap based on generation specific to a renewable energy resource and RECs associated with such generation. For each calendar month in the 20-year period commencing on June 1, 2012, the payment under the Long-Term Agreement is calculated as follows. In each hour, the difference between the fixed price and the floating price is calculated. The fixed price is the Price Bid in the first year of the Long-Term Master Agreement and it escalates at a rate of 2% in each subsequent year. The floating price is the Locational Marginal Price (“LMP”) at the ComEd load zone in the day-ahead market for that hour. This difference is applied to the volume of energy produced by the Project in that hour multiplied by the Applicable Percentage specified by the Seller (a percentage of the output of the renewable energy resource). The volumes used for the calculation are the volumes that are metered and delivered to a transmission system or to a distribution system. For this purpose, the seller provides to ComEd hourly-integrated generation meter data in a useable electronic form from a revenue quality meter that satisfies the requirements of the regional transmission organization, transmission provider or distribution company. The payment is then the sum, over all hours of a month, of the amount thus obtained for each hour. A positive payment is due to the Seller while a negative payment is due to ComEd.9/10/2010, in Long-Term Renewable Energy and RECs RFP.
Please see the Confirmation of the Long-Term Master Agreement. The seller under the Long-Term Master Agreement must deliver the energy to a transmission system or an electric utility distribution system. If the seller interconnects with a transmission provider that is not part of a regional transmission organization or is interconnected at the distribution level and settles energy deliveries with the distribution utility or sells energy to the distribution utility, the seller must generate and physically deliver the energy to the transmission system of the transmission provider with which it is interconnected or to the distribution system of the utility with which it is interconnected. This requirement precludes a Project under a net metering arrangement or an arrangement where the power is used behind the meter. 9/10/2010, in Long-Term Renewable Energy and RECs RFP.
A Bidder may, as part of its Part 1 Proposal, request modifications to the Standard Pre-Bid Letter of Credit or the Standard Post-Bid Letter of Credit. A Bidder requests modifications to the Standard Pre-Bid Letter of Credit by submitting a Draft Pre-Bid Letter of Credit indicating clearly all modifications in Microsoft Word with tracked changes. The Draft Pre-Bid Letter of Credit may be saved to a CD that is included with the Part 1 Proposal or the Draft Pre-Bid Letter of Credit may be e-mailed to the Procurement Administrator at pa@comed-energyrfp.com. The Draft Pre-Bid Letter of credit is due with the Part 1 Proposal. The deadline for the Part 1 Proposal is noon on Monday, September 13, 2010.9/10/2010, in Long-Term Renewable Energy and RECs RFP.
The term of the Pre-Bid Letter of Credit begins at the date of issuance of the Pre-Bid Letter of Credit by the bank. The expiration date of the Pre-Bid Letter of Credit must be no earlier than nine business days after the Bid Date, which is October 14, 2010.9/10/2010, in Long-Term Renewable Energy and RECs RFP.
The Bidder must provide an executed Pre-Bid Letter of Credit, drawn for the account of the Bidder, to support its Bids. Cash is not acceptable as a substitute for the Pre-Bid Letter of Credit.9/10/2010, in Long-Term Renewable Energy and RECs RFP.
The Part 1 Proposal may be hand-delivered to our offices. A Bidder delivers its Part 1 Proposal by certified mail, registered mail, hand delivery or overnight delivery to the Procurement Administrator by 12 PM (noon) on the Part 1 Date at the following address: NERA Economic Consulting, ComEd Procurement Administrator, 875 North Michigan Ave, Suite 3650, Chicago IL 60611. The overnight delivery service need not be FedEx or UPS and another courier is acceptable.9/10/2010, in Long-Term Renewable Energy and RECs RFP.
