RFP - 2008R-1 - Question and Answer

These are the questions received from bidders and stakeholders during the RFP 2008R-1 process. PacifiCorp's public responses are provided on this page. For questions regarding RFP 2008R-1 please send an e-mail to RFP2008R1@PacifiCorp.com

With respect to the $10,000 bid fee for an initial project submission and two additional alternatives; what is the characterization of the alternatives? Must they be derivative of, phases, or variations of the initial project submission? What of the additional $1,000 per alternative for each additional alternative (up to three)? How do they differ from the two additional alternatives to the initial submission?

A bid may consist of one base proposal in addition to two alternatives for the same bid fee. The alternatives may consist of a different bid size, contract term, in-service date and/or pricing structure for the same bid. In addition, Bidders will have the option of submitting up to three additional alternatives for a fee of $1,000 per alternative.

The forward price curve discussed in the net PVRR evaluation, is available in the published 2007 IRP?

No. The forward price curve date (and therefore, also the data) to be used in the initial net PVRR evaluation will be determined when the final RFP is issued. The forward price curve will be PacifiCorp's internal price curve on that date.

The net PVRR component views the value of energy and capacity as a positive, and the offsetting costs as negative. Please repeat the types of offsetting costs.

Below are the offsetting costs:

• Cost of energy

• Cost of integration

• Cost of purchase option

• Cost of transmission

• Cost of capacity

• Other costs identified as necessary to appropriately value the proposal

This would be done without negotiation of other credit terms?

Specific credit terms will be negotiated as part of the Agreement with a final short listed bidder, however, if required, a commitment letter will need to be posted as outlined above and according to Appendix D.

I think the guidance in today’s conference was clear regarding bid options, but I’d like some further clarification. The RFP allows for a single proposal plus two alternatives for the $10,000 Bid Fee. Stacey indicated that the proposed alternatives can be of different Transaction Structures. However, the first sentence in Section 4. REQUEST FOR PROPOSAL CONTENT, states that proposals can be submitted for either A) PPA, B) BOT, or Asset Acquisition and Sale Agreement.

No, as a point of clarification, a bid fee may consist of one base proposal (i.e. Transaction Structure) in addition to two alternatives for the same bid fee. The alternatives may consist of a different bid size, contract term; in service date and or pricing structure for the same bid but not a Transaction Structure. In addition, Bidders will have the option of submitting up to three additional alternatives for fee of $1,000 per alternative. Each base proposal can consist of a power purchase agreement, a build own transfer or an asset acquisition and sale agreement. See Section 3F Bid Fees page 13.

Can you please clarify the extent to which bid options may propose entirely different Transaction Structures?

Yes, bidders can propose 1) Power Purchase Agreements, with and without the purchase option 2) Build Own Transfers, 3) Asset Acquisitions and Sales Agreements. To the extent that Bidders are seeking to use PacifiCorp Turbines for the Build Own Transfer structure they must indicate so in Intent to Bid request upon a confidentiality agreement will be required to be executed. To the extent that Bidders have modifications to the above three types of Transaction Structures they can propose modifications and PacifiCorp and the Independent Evaluators will evaluate them accordingly.

A bidder who was on the phone wanted clarification on the level of access to/security of turbines necessary to submit a bid. For example a must the TSA be signed? In negotiation?

Yes, turbines are necessary to submit a bid. On page 9 of the RFP it states the following: PacifiCorp will evaluate the proposals based on cost effective economics, a viable implementation schedule, verifiable major equipment availability (such as wind turbines or other long lead- time equipment), appropriate ability to provide security for the Bidders proposed obligations, transmission and interconnection status, and conformance to the pro forma contracts attached as Appendices to this RFP. This means that the bidder must have turbines and be able to demonstrate that they have turbines.

Will PacifiCorp publish the final version of the RFP and Appendices in Word format?

 

Everything will be posted in Word versions -- please check PacifiCorp's website at Pacificorp.com, then Suppliers & RFP's, then Request for Proposals. The few remaining documents not posted will be posted in the next couple of business days. No, they cannot fill the information out online.

A bidder asked a follow-up to Q&A 14 about when the Word versions of the documents will be posted. Has PacifiCorp posted them to your website? If not, when can we expect the documents to be posted.

The word documents are posted.

We have several questions related to the timing of the bid evaluation, and how it relates to the timing estimates in Section 3A, Chart 2 of the Main Document. In the Main Document, Section 6, an "initial short list" and a "final short list" are described. Will Bidders selected for the initial short list be notified? If so, when? Please answer in the context of Main Document, Section 3A, Chart 2 (i.e. will the notification occur prior to event "Complete Evaluation: February 27, 2009"?)

Yes, Bidders who make the Initial shortlist will be notified. The time line will depend on how many proposals need to be analysed. We anticipate that it will occur prior to the Complete evaluation in the RFP.

When will Bidders selected for the "final short list" be notified? Will this occur shortly following the estimated "Evaluation Complete" date? The estimated timing is important, due to the requirement to provide the guarantee commitment letter 20 days thereafter.

Bidders will be notified as to their inclusion on the final short list at the conclusion of the evaluation process. The date of February 27, 2009 and March 27, 2009 are tenative and is subject to movement. Credit commitment letters will be due until 20 days thereafter the notification.

We will bid from multiple sites. However, the resource alternative will be the same for all sites. Since the instructions for the NOI say a separate NOI is required for each Resource Alternative, we do not have to file an NOI for each site. Is that correct?

Our preference is that you file a separate NOI with each request.

If we are short listed, we would have to post a pre-determined credit amount for performance as of the execution date? This would be done without negotiation of other credit terms? It seems like credit is a negotiated item that entails more than simply one party posting a pre-defined amount when other credit terms aren't addressed.

If you are on the final shortlist and are relying on another entity to provide credit assurances on your behalf, you are required to provide an acceptable form of commitment letter from that entity, stating the promise to provide credit assurances up to the maximum amount as set forth in the credit matrix in Appendix D. The form of commitment letter can also be found in Appendix D. This commitment letter is required 20 business days after being notified by PacifiCorp that you are on the final shortlist. Specific credit terms will be negotiated with a final short listed bidder. The timing of when credit assurances are to be posted can be found in Appendix D, in the section titled Posting of Credit Security.

It seems like credit is a negotiated item that entails more than simply one party posting a pre-defined amount when other credit terms aren't addressed.

All credit terms will be negotiated with the final short listed bidder as part of the final transaction.

I was at the RFP presentation last week and was told that we needed one year's worth of onsite data in order to bid into the RFP. There was an idea posed by a coworker where he thought we could get around the one year onsite requirement--he said that we can put together a robust wind data model on one of our project sites based on a state tower nearby with two years of data and ridge data and correlate them to our onsite tower that we have collected onsite for eight months. He thinks that this is robust enough wind data model that it should be no problem bidding with only eight months of data. Would you agree with this? If so, if the same scenario holds true, but we only have two months worth of on-site data but that it correlates well to state and other towers in the vicinity, could we bid this site as well?

Wind proposals must include a minimum of one year of on-site meteorological tower data, converted to an estimate MWh of production on an hourly time scale. To the extent a portion of required tower data is missing, a Bidder can provide an estimate of such missing portion as long as a brief description of estimation method is provided. The data will need to be robust for PacifiCorp to complete a meaningful analysis.

The RFP has a minimum generation requirement, must this be at a single location with a single point of connection to the transmission facilities, or could multiple sites be aggregated to, at least, equal the minimum generating capacity?

All resources must 1) be connected directly to PacifiCorp’s system (not a customer system) using interconnection agreements administered by PacifiCorp’s transmission, 2) have revenue quality metering, and 3) be contracted via a single PPA or BOT contract. Each proposal must be analyzed as a single resource.

The EPA has a program to establish renewable energy generating facilities on 'Brownfield' properties identified in Oregon ("Renewable Energy on Contaminated Land and Mining Sites", http://www.epa.gov/renewableenergyland/basic_info.htm ). Has PacifiCorp has analyzed this program and would they give consideration to help negotiate the establishment of qualifying projects on properties from this program?

PacifCorp has not done this analysis to date.

Page 28 of the RFP indicates that submissions of Intent to Bid Forms must be a physical copy, implying that October 31st email submissions are not accepted (with original to after October 31st). Is that correct? If so, this appears commercially unconventional.

The intent of the RFP is that bidders provide hard copies of the NOI, not email copies

I received a call and an email since we spoke earlier asking about the status of the attendees at the Bidders Conference. Do you intend to post the list?

Yes, it is posted

Also, I assume that we do not need to start the transmission service request process as if we sign a PPA with Pacorp, then they deal with this end of things.

Bidder will be responsible for interconnection of their resource to either the PacifiCorp system or a 3rd party transmission provider system and all communication with the transmission provider. If bid resource is interconnected to a 3rd party transmission system the bidder is responsible for all transmission service arrangements for all delivered energy under any PPA to PacifiCorp system. PacifiCorp will include costs of integration to their transmission system and will apply for these studies to be initiated. This will be discussed at the Transmission workshop on November 10th.

Can PacifiCorp make a prepayment to the Project Company under the PPA scenario if the following conditions are met? (1) The bid proposal achieves a cost of energy that is low enough for the bid to be selected based on a cost of energy basis, (2) The proposal does not add incremental risk to PacifiCorp’s customers (compared to a PacifiCorp ownership scenario), (3) The prepayment is structured with a fixed repayment schedule, and it does not change based on the project’s output/performance, (4) The implied interest rate on the prepayment is equal to PacifiCorp’s pre-tax equivalent Weighted Average Cost of Capital, and (5) The relevant PUC’s allow PacifiCorp to consider the prepayment as a regulatory asset 5 and allow rate recovery based on the premise that the bid provides the least cost and the least risk to PacifiCorp’s customers.

Yes, however, if this structure was selected we would require the regulators to review the structure and ensure that it would be recoverable.

A bidder just e-mailed to say that they are having some difficulty getting all their credit documents together. Would it be permissible for them to submit the EOI today and supplement with the necessary documentation in the next day or so? I've encouraged them to at least get the EOI in, since that's officially what is due.

Yes.

If an Intent to Bid was submitted for one Resource Alternative, can a proposal be submitted for that Resource Alternative and another one (one which did not have an Intent to Bid)?

If the proposal is for the same Resource Alternative than it is considered an Alternative but if the proposal is for a different Resource Alternative than it requires a separate Intent to Bid.

Within the Appendices to the PacifiCorp RFP, under the Credit Matrix section, it states " .... if (a Moody's or S&P credit rating is) not available, the credit rating will be determined by the Company through an internal process ....". Please provide guidance on what credit rating we should use in determining the amount of credit assurances to be posted.

The RFP states the Credit Rating is defined as the lower of: x) the most recently published senior, unsecured long term debt rating (or corporate rating if a debt rating is unavailable) from Standard & Poor’s (S&P) or y) the most recently published senior, unsecured debt rating (or corporate rating if a debt rating is unavailable) from Moody’s Investor Services. If option x) or y) is not available, the Credit Rating will be determined by the Company through an internal process review utilizing a proprietary credit scoring model developed in conjunction with a third party.

From the Company's response to Question 4 in the Q&A posted on the RFP website, are these depreciation schedules governing designed plant life documented anywhere? If so, can they be provided?

No, the depreciation schedules are not however, the information for the designed plant life is in the IRP.

When will Bidders receive acknowledgement that the Intent to Bids have been received and have been completed correctly?

All Bidders have been notified.

How does the Company evaluate a proposal whose depreciation schedule (allowed by PacifiCorp regulators) related to the sale of an existing facility is shorter than the design plant life of that asset? Or does the approval valuation per this RFP just allow for the Design Plant Life to be equivalent to the Depreciation Schedule?

We first run an analysis using the approved book depreciation lives of the plant, from a regulatory perspective. If you can demonstrate and we agree that the economic life extends beyond the official book life, then we may extend the analysis period to match the best estimate of the extended life.

When is the appropriate time to propose adjustments to the Design Plant Life based on existing or planned plant improvements? How will these adjustments be evaluated or validated?

It must be on existing adjustments. The evaluation must be compelted on what is known and measureable at the time of the evaluation.

Please provide a Point of Delivery costs (per Attachment 13 of RFP appendices) for both locations: (1) interconnecting to Casper North substation and (2) Platte substation.

Wyoming.

Are bidders required to supply emission offsets and/or credits within their bids?

 

Yes, if the proposal is for a new power plant to be located in either Oregon or Washington. If the bid is for a power purchase agreement, bidders are expected to include any current or reasonably expected future emissions-related compliance costs (including future greenhouse gas allowance costs), within their proposed pricing.

Is this only applicable for certain states? If so, please identify those states.

 

Currently, Oregon requires new power plants to offset approximately 17 percent of anticipated CO2 emissions and Washington requires new power plants to offset approximately 20 percent of anticipated CO2 emissions. Bidders should consult each state's power plant siting regulations for the latest offset obligations."

Appendix C‐1 suggests PacifiCorp will accept a PPA of 25 years in duration. Will PacifiCorp accept PPA’s of greater or lesser term and if so how will this be taken into account in the terminal value methodology?

 

The PPA is designed for a PPA for a wind project. A PPA can only be for the life of the asset consistent with the IRP. In the event the Bidder provides an purchase option to the Company an additional terminal value will be applied.

Can bidders participate in the Integration Cost Workshops?

Yes - It will be held in the first week of December.

Will the terminal value methodology be open to public comment and participation?

No, this will be an internal evaluation by the Company , locked down by the IE.

PacifiCorp originally indicated that resources delivered on the Gonder‐Pavant line were acceptable. Will PacifiCorp accept delivery of a resource delivered on the Gonder‐Pavant line? If not please explain why this has changed.

 

Acceptance of a resource at any point of delivery is dependant on the resource's ability to be interconnected and integrated. PacifiCorp transmission will determine after an application has been received.

Is there a possibility that you would consider a late submission? We would be interested, if it’s possible.

No. Additional NOI will not be accepted.

Have you yet published the Attendee list from the October 22nd Pre-Bid meeting?

Yes, the list is published.

Would a bid for multiple small 2-3MW DC systems totaling 12MW AC, meeting the required production minimum, be considered a conforming bid?

Yes given that fixed panel solar can have low capacity factors, 25,000 MWh translates into anywhere from 12-20 MW. They MUST are all connected directly to PacifiCorp's system (not a customer system) using interconnection agreements administered by PacifiCorp's transmission function,

• all have revenue quality metering

• all are contracted via a single PPA or BOT contract,

• all are expected to come online during the RFP window (< end of 2011), AND

• a single superimposed production profile can be submitted for analysis review, AND

• a single PPA price is paid for all output or a single BOT price for all assets.

The 2008R-1 file (link on page 8) is not letting me chose any other option than “Build Own Transfer” in cell F12. Can you please verify that the spreadsheet is working correctly?

There are two options 1) the Build Own Transfer and 2) a separate tab for the Power Purchase Agreement.

Is this in response to a low number of responses earlier, or a drop in commodity process, etc? Can you share the reason why with us? Is that a question to direct to someone else?

No, the amendment is in response to an interpretation in one of PacifiCorp’s states to issue a request for proposals for renewable resources in January if the company is building its own generation in that given year. PacifiCorp determined it was most efficient to issue an amendment to RFP 2008R-1 instead of issuing two separate requests for proposals.

It is unclear from the attached 2008R-1 Amendment, what exactly is being amended or what a bidder would change to comply with this amendment? The amendment and the email below cite the December 16 submission date. [BIDDER NAME REDACTED] along with other bidders submitted its proposals on December 24, after a weather related extension was granted from the revised December 22. Please clarify what the Amendment is requesting.

The amendment allows existing bidders to update their pricing and new bidders to submit pricing by February 27, 2009. The previous submission deadline was December 22, 2008. This deadline was extended to December 24, 2008 due to weather. The letter erroneously refers to December 16, 2008. No other requirements have been modified. Bidders do not need to take any action if they have no updates to their previously submitted proposals.

This is welcome but somewhat confusing because the original due date was December 22nd rather than the date you mention in the attached letter December 16th. Is this the same RFP I submitted our response to PacifiCorp or is it a different one? If it is the same then the date of the 16th is not correct. If the same I will provide a refresh to PacifiCorp by the due dates.

This is the same RFP. The amendment allows existing bidders to update their pricing and new bidders to submit pricing by February 27, 2009. The previous submission deadline was December 22, 2008. This deadline was extended to December 24, 2008 due to weather. The letter erroneously refers to December 16, 2008. Existing bidders who submitted proposals by the December 24, 2008 deadline can refresh their bids. If they do not refresh their bids, the bids will be evaluated as previously submitted and no additional action is required by the bidder.

Hello, your amended 2008/R-1 RFP has not been posted on your website. Can you send me the new RFP documents?

The RFP 2008R-1 amendment documents are now posted on the website.

We received this amendment notice and want to seek clarification. Can you articulate the reason for issuing this amendment? Is it because of: 1) Insufficient number of bidders 2) Insufficient quantity of renewable resource bids or 3) A reopener of bids due to a change in market conditions?

See answer to Question 40.

Why did PPW decide to establish a due date of Dec 22nd 2008 for its renewables RFP when it knew it had issue another RFP 10 days later? Is it possible since PPW is opening the RFP process up again, that parties could withdraw (get deposit back), revise existing proposals, or add new proposals?

The amendment is in response to an interpretation in one of PacifiCorp’s states to issue a request for proposals for renewable resources in January if the company is building its own generation in that given year. PacifiCorp determined it was most efficient to issue an amendment to RFP 2008R-1 instead of issuing two separate requests for proposals. Existing bidders can either update their existing bids or make no changes and their bids will be evaluated as previously submitted. Existing bidders can also submit additional bids. Existing bidders can withdraw their existing bids and receive a refund of the bid fee so long as the request to withdraw is received by PacifiCorp in writing prior to the proposal due date set forth in the amendment.

Question 7: [BIDDER NAME REDACTED] response to PacifiCorp’s original RFP2008R-1, was shipped via FedEx on Dec. 19th, 2008, for delivery on Dec. 22nd, 2008. However, FedEx informed us that due to extreme weather conditions the packages were not delivered until Dec. 23rd. Was our response to the 2008R-1 RFP received and will it still be eligible for consideration under the original RFP conditions?

Due to extreme weather in the Portland area on December 22, 2008, the deadline was extended to December 24, 2008.

The 2008R1 RFP was amended last Monday to allow new bids to come in and bids that had been issued to be refreshed. We are interested in learning why PacifiCorp has amended the RFP to allow for additional bids.

See answer to Question 40.

Is there any way that I could access the bidders list for this RFP?

The bidders list will not be released at this time.

When are these due?

Updates to proposals which were submitted on December 22 and/or new proposals are due on February 27, 2009.

In response to RFP 2008R-1, we have the following questions: • Will Yellowtail 230 kV bus be considered as a delivery point? • Will Goshen 161 kV bus be considered as a delivery point? • Will it be acceptable to respond by indicating two or more delivery points whose cumulative total is 300 MW, to constitute our proposal of delivering a total of 300 MW in response to this RFP?

Please refer to the RFP 2008R-1 documents for information regarding acceptable delivery points and for details regarding the size of projects that will be accepted.