1803 LTRFP 2019

Adjustment to Section 4.3 RFP Schedule: The LPSC Staff will file comments on 1/28/2020.

1803 Electric Cooperative Long-Term RFP Documents:

Notice of Technical and Bidders Conference

Frequently Asked Questions (FAQ)*:

  1. Q: Are all questions submitted going to be posted anonymously?

    A: Yes

  2. Q: Where will the questions be posted on the RFP Administrator Website?

    A: All questions and responses will posted under the FAQ section on https://www.acespower.com/1803ltrfp2019/

  3. Q: What is the response time by the RFP Administrator for questions submitted?

    A: Responses to questions will be provided as soon as practical. Response times will vary depending upon the complexity of the question.

  4. Q: Section 3.3.2. states “Energy supply must be physical” – please explain what is meant by “physical”.

    A: “Physical” means “Non-Financial”.  The energy supply is intended to be physically delivered and scheduled within the MISO market. 

  5. Q: Please clarify the binding Phase 2 pricing and concept of “consistent with, and align with, market fluctuations”. What metrics will be used by 1803 and the RFP Administrator to quantify market fluctuations?

    A: We will use forward pricing for relevant commodities including, but not limited to MISO South forward power prices, MISO South forward capacity prices, natural gas forward prices, and renewable energy forward prices at the time of the bidder’s first phase proposal in comparison to forward pricing at the time of the bidder’s second phase proposal. The magnitude and direction of pricing changes will be reviewed.

  6. Q: Is 1803 considered a wholesale power provider for purposes of establishing market-based rate authority under FERC?

    A: No.

  7. Q: Is there a scenario in which less than all 5 Members of 1803 would contract for a portion of supply? For example, 3 of the 5 members contract for Capacity. Or 4 of the 5 members contract for a PPA.

    A: The RFP is being conducted on behalf of 1803, which is the supplier for all of its members. 

  8. Q: How will information be communicated regarding the Technical and Bidders Conference?

    A: The Notice of Technical Bidders Conference is posted on https://www.acespower.com/1803ltrfp2019/

  9. Q: Is registration required in order to attend the Technical and Bidders Conference in Person?

    A: There is no registration for the Technical and Bidders Conference; all are welcome to attend.

  10. Q: Can you provide three years of audited financial statements for each of 1803’s members?

    A: 1803 will provide three years of audited financial statements for each of the five members upon execution of the final version of the Confidentiality Agreement, Appendix C. The final version shall be posted to https://www.acespower.com/1803ltrfp2019/ on or around January 31, 2020.

  11. Q: May changes be proposed to the Confidentiality Agreement? If so, how should those changes be proposed?

    A: 1803 will consider proposed changes to the Confidentiality Agreement, Appendix C. Please submit proposed changes in redline form to the RFP email address by 5:00 PM CPT on January 22, 2020. After review and consultation with LPSC Staff, a final version of the Confidentiality Agreement, Appendix C, will be posted to the RFP website.

  12. Q: Will a representative from each of the individual 1803 cooperatives be present at the January 16 Technical and Bidders Conference?

    A: Representatives of each of the individual 1803 Member Cooperatives are anticipated to be present at the January 16 Technical and Bidders’ Conference.

  13. Q:The RFP suggests on Page 5 that “winning proposals” will be selected. It indicates on Page 8 that “1803 will likely enter into a variety of power purchase agreements (PPA) to fulfill the energy and capacity obligations of its Member Cooperatives.” On Page 9, it mentions that 1803 “intends to purchase a […] diverse power supply portfolio to meet its long-term load-serving obligations.” Please identify and explain: (a) whether the RFP predetermines and assumes an outcome that will include a “variety of purchase power agreements” and/or a “portfolio” of resources, (b) whether the RFP precludes bids that propose a single power purchase agreement that meets the full requirements of 1803 and its member cooperatives, and (c) whether the RFP predetermines and assumes that capacity and energy alone will be sufficient for 1803 to serve the full requirements of its member cooperatives?

    A: The RFP does not predetermine or assume any outcome, and provides for a wide variety of responses, including load following PPAs from 5-100% of the load. A single proposal could be selected if that proposal meets all of 1803’s needs. (b) A bid proposing a single PPA is welcome and would be provided using appendix B-3, noting any additional products or services provided with the response. (c) The analysis will include a full comparison of all costs for 1803 to serve the full requirements of its member cooperatives. The PPA Evaluation Team will evaluate all costs that 1803 will incur under any offer(s), primarily composed of energy and capacity but also ancillary services, MISO market charges, energy management and other costs. However, it is assumed transmission costs would be directly charged to 1803 or passed to 1803 at cost, if a proposal offers to fix transmission costs at set rates for 1803 this should be clearly indicated for proper evaluation.

  14. Q: Please identify and explain: (a) the RFP requirements to provide transmission arrangements and deliverability for bid proposals, (b) how the transmission costs will be quantified, and (c) how the transmission costs will be included in the bid evaluations.

    A: (a) The RFP indicates the desired locations and deliverability for all products as indicated in each description in the document. (b-c) The proposals should cover all interconnection costs in the offered price or indicate any costs that would be passed through. Any pass through costs will be included in the evaluation and any basis costs (congestion and losses) and risk will be evaluated based upon historical and future congestion and loss forecasts as discussed in Section 4.13 of the RFP.

  15. Q: Please identify and explain: (a) the RFP requirements to assess risk differences among bid proposals in terms of cost, availability, reliability and deliverability, (b) how the risk differences will be quantified, (c) how the quantifications of risk difference will be included in the bid evaluations and (d) whether the risk assessment process will be subject to LPSC oversight or 1803 input.

    A: (a-c) Please see section 4.13 of the RFP which discusses risk differences and stochastic modeling. (d) 1803 will be working with Commission staff and their consultants on the risk and cost evaluations. 1803 is the requestor of these proposals. RFP preferences, including risk, are entirely 1803’s preferences as described in section 4.13.

  16. Q: The RFP mentions on Page 30 that 1803’s “risk tolerance” will be taken into account when evaluating proposals. On Page 4, it mentions that 1803 member cooperatives currently receive power pursuant to “full-requirements” contracts, which mitigates many of their primary risk exposures. Given the RFP indicates it is for capacity and energy only, (a) how does 1803 intend to manage the risks associated with day-to-day energy management, e.g. load forecast risk, day-ahead vs. real-time energy market exposure, basis risk between energy supply and load obligation, etc. and (b) how will such risks be accounted for when conducting levelized cost analysis?

    A: The RFP seeks a variety of potential supply types, including load following products that could include full requirements offers. The selected responses may or may not leave risk for 1803. If risk remains, 1803 has plans to manage any such exposures. (b) The PPA Evaluation Team will evaluate all costs and risks that 1803 will incur under any offer(s), primarily composed of energy and capacity but also ancillary services, MISO market charges, energy management and other costs. 1803 does not consider pass-through charges in an offer as risk reducing.

  17. Q: Please identify the “1803 personnel” for which unsolicited contact regarding the RFP is prohibited during the RFP process.

    A: “1803 personnel” includes all employees, management and board members of 1803 and the five member distribution cooperatives, as well any consultants retained by 1803 or its members in conjunction with this RFP.

  18. Q: Please identify and explain the procedures that will be used for bids that are determined to be “non-conforming”, including: (a) the notification procedure, (b) the timing of the notification, (c) opportunity and timing for cure by the bidder and (d) whether the LPSC will have oversight into the rejection of any such non-conforming bids.

    A: (a) The RFP Process Control Team will contact bidders who submit inaccurate or incomplete data to inform them of the omissions/errors and ask them to correct the data and resubmit their proposals by no later than 5pm CPT on 2/28/20.

    (b) As soon as practical after receipt of the proposal.

    (c) See (a) above.

    (d) Per Section 4.11 of the RFP, 1803 and the RFP Process Control Team will notify the LPSC of the disqualification of any proposal on the basis it is non-conforming and shall identify the manner in which it is non-conforming.

  19. Q: Please supply the hourly shaped load forecast for the 1803 entity to be served by resources procured through this RFP for the period 2025 through 2050.

    A: The data will be provided to respondents who have a signed NDA when the final version of the RFP is released. Appendix A contains annual peak demand and energy projections as well.

  20. Q: Does ACES have commodity projections to provide to bidders so all bids are based on a single set of commodity projections?

    A: 1803 recognizes that different bidders may have different suppliers and cost structures and should use those in their responses to provide 1803 the most accurate information.

  21. Q: Please identify and explain whether all information from the stakeholder portion of the RFP process shall be filed into the LPSC docket and record in X-35283 for use in certification proceedings as needed, including in particular: (a) all stakeholder questions and responses thereto, and (b) all stakeholder comments.

    A: 1803 does not intend to file any of the bidder questions and responses or comments into LPSC Docket No. X-35283. 1803 will maintain this webpage for public review, with bidder questions and responses included, throughout the subsequent and separate certification proceedings. 1803 will share all comments received with LPSC Staff and, upon specific request by a bidder/stakeholder, will consider posting the comments of the requesting bidder/stakeholder to this webpage.

  22. Q: Please identify and explain: (a) whether the RFP predetermines and assumes an outcome that contract terms cannot begin until 2025, (b) whether the RFP precludes bids that propose contract terms that entail savings to members as soon as 2020, and (c) if not, how the RFP intends to treat bids that propose contract terms that entail savings to members as soon as 2020?

    A: (a) The RFP is intended to provide supply at the end of the current contract, however a respondent may offer credit(s) or cash payment(s) prior to the start of the contract.

    (b) The RFP does not preclude such bids. If a respondent wishes to offer credit(s) or cash payment(s) prior to the start of the contract, that should be indicated as part of the appropriate product offering with the timing and amount of such credit(s) or payment(s).

    (c) The RFP evaluation will calculate a net future value as of 2025 for any credits or payments made prior to the start of the contract and include such value in the evaluation.

  23. Q: When will the 1803 members provide access to hourly load shape data?

    A: See question #19.

  24. Q: Please identify and explain how the RFP evaluation will take into account and compare bid proposals that are different in terms of providing a full requirements solution versus providing a slice of portfolio option.

    A: All proposals will be evaluated on the total costs to 1803, equivalent to the full requirements cost. Refer to section 4.13 and Question #13.

  25. Q: Please identify and explain how the RFP evaluation will take into account and compare bid proposals that are different in terms of the start date for providing savings to members (i.e., beginning in 2020 versus not until 2025).

    A: The RFP evaluation will calculate a net future value as of 2025 for any credits or payments made prior to the start of the contract and include such value in the evaluation. See also Question #22.

  26. Q: If there is an interest in energy storage resources being bid into the RFP process, would it be possible to create a specific PPA Evaluation Form for an energy storage resource?

    A: Energy storage resources are part of Appendix B-2. A separate Appendix for evaluation of energy storage resources can be created.

  27. Q: What materials and/or information, if any, are anticipated to be designated as Highly Sensitive Protected Material?

    A: Information and documents which may be subject to such designation could potentially include certain cooperative information related to financial issues, pending/future litigation, and matters related to utility competition as well as specific information regarding distribution cooperative members/customers.

  28. Q: The bidder registration form requests identification of the “Credit Support Provider (if applicable).” How do you define “Credit Support Provider,” (i.e., is it asking a proponent to identify the entity that will post credit, such as a parent or a guarantor, or is it asking for identification of a financial institution that may provide a letter of credit)?

    A: Credit Support Provider is a guarantor, which is an entity issuing or providing a guaranty in respect of obligations of the bidder.

*Please note that question numbers are only for ease of reference and do not indicate the timing or importance of any question.