ENE50 RFR Natural Gas Final~1.docx

REQUEST FOR RESPONSE

Statewide Contract for Natural Gas RFR # ENE50 / COMMBUYS Bid# BD-19-1080-OSD03-SRC01-40843

COMMONWEALTH OF MASSACHUSETTS

OPERATIONAL SERVICES DIVISION

Request for Response (RFR)

Document Title: Statewide Contract for Natural Gas

Agency Document Number: ENE50NN

COMMBUYS Bid#: BD-19-1080-OSD03-SRC01-40843

07/11/2019

Please Note: This is a single document associated with a complete Bid (also referred to as Solicitation) that can be found on www.COMMBUYS.com. Bidders are responsible for reviewing and complying with all Bid requirements. Bidders may contact the COMMBUYS Helpdesk at COMMBUYS@state.ma.us or the COMMBUYS Helpline at 1-888-MA-STATE for technical assistance with COMMBUYS. The Helpline is staffed from 8:00 AM to 5:00 PM Monday through Friday Eastern time, as applicable, except on federal and state holidays.

Bidders with disabilities or hardships that seek reasonable accommodation, which may include the receipt of RFR information in an alternative format, must communicate such requests in writing to the contact person. Requests for accommodation will be addressed on a case by case basis. A Bidder requesting accommodation must submit a written statement which describes the Bidder’s disability and the requested accommodation to the contact person for the RFR. The SST reserves the right to reject unreasonable requests.

Contents

A.

Introduction and Bid Overview

1. Purpose of Procurement The Commonwealth of Massachusetts and the ENE50 Strategic Sourcing Team (SST) are soliciting bids for acquisition of natural gas supply. The resulting Contract will replace ENE44 and be the primary Statewide Contract used by Executive Agencies of the Commonwealth for the goods and services covered by the Contract.

The Commonwealth’s current natural gas supply contract ends with the first meter read date on or after November 1, 2019. This procurement will be performed through a two-step process where interested bidders provide technical information for evaluation in Phase I and those that are approved provide pricing through a reverse auction in Phase II.

This contract serves approximately 360 accounts from various state agencies. These accounts use approximately 2.6 million dekatherms (Dths). The Statewide Contract will also be available for use by other eligible entities listed below. Each Commonwealth Agency and eligible entity is responsible for executing its own purchase orders and paying its own invoices for goods and/or services acquired from this Statewide Contract. Contractors will be responsible for marketing their goods and/or services to Commonwealth Agencies and other eligible entities.

The Massachusetts Operational Services Division (hereafter referred to as “OSD”) is requesting responses for the supply of all natural gas commodity components, up to the Delivery Point including but not limited to natural gas commodity, transportation and delivery (including any/all directly related ancillary and/or incidental services necessary), the Statewide Contract Administration Fee as defined in this RFR, Enel X North America, Inc.’s procurement fee (hereafter referred to as “Enel X”), to service the load of the various facilities in the Commonwealth of Massachusetts. DO NOT INCLUDE regulated delivery charges in the price you bid. Along with the release of this RFR, Enel X will make available an excel file titled “Exhibit 1” which will include an auction schedule, monthly usage data for all included accounts, and other utility provided information regarding each account such as service address, account number and tariff. The Exhibit 1 will be made available at: http://exchange.apps.enelx.com/webportal/Public/Announcement.aspx?ID=hUDd5YgWsdg%3d OSD will be requesting pricing for two natural gas pricing products that will differ with respect to price components to be included in bids. The two pricing products are 1) Firm-fixed price and 2) Index + basis price (NYMEX last day settle + basis). Not every pricing product will be requested for each account and some accounts may request only one of the two pricing products. The accounts serviced through this contract are located in the following utility service territories:

· Berkshire Gas Company

· Bay State Gas Company (d/b/a Columbia Gas)

· Eversource (formerly NSTAR)

· Liberty Utilities

· National Grid (comprises Boston Gas Company and Colonial Gas Company) This procurement is being conducted through a multi-step auction bidding process and awards will be made to the responsive and responsible bidder supplying the lowest price for each account group as defined under Exhibit 1 for pricing options as determined by the Commonwealth. Alternate bids (bids on terms or conditions different than those established by this RFR) are not permitted. All bidders shall submit an un-priced technical proposal which will be evaluated in accordance with this RFR. Bidders whose technical proposals are found to be acceptable will be invited to participate in a reverse auction through Enel X’s auction platform. Bidders whose technical proposals are found unacceptable will be so notified. All prices submitted through the Enel X auction platform shall be in accordance with the provisions of this RFR. It shall be the express responsibility of the Bidder to understand both the rules and the mechanics of the Enel X auction platform. As part of this procurement both teleconferences and a demo auction will be provided to assist Bidders.

OSD is utilizing an internet-based transaction platform provided by Enel X to obtain pricing for this procurement. Bidder’s prices shall be submitted utilizing an internet-based, reverse auction provided by Enel X at https://exchange.apps.enelx.com in accordance with the instructions in this Request for Response (RFR) and the Enel X website:

https://www.wesplatform.com/WebPortal/Public/Announcement.aspx?ID=l0Q%2bGceZ3%2fI%3d

To participate in the initial aggregation, all non-executive agencies executed a Memorandum of Understanding (MOU) which gives OSD full authority to award for all participants of this Contract.

2. Estimated Procurement Calendar

Pre Bid Conference Information click here

Training for Online Submission – Contractors that have not previously submitted electronic quotes via COMMBUYS are strongly encouraged to attend training

Locate and Respond to Bids in COMMBUYS Dates and Times Available:

July 25, 2019 1:00PM Location:

Webinar Limited seating – reserve your seat now at:

How to and Respond to Bids in COMMUYS - Webinar

Times are Eastern Standard/Daylight Savings (US), as displayed on the COMMBUYS system clock displayed to Bidders after logging in. If there is a conflict between the dates in this Procurement Calendar and dates in the Bid’s Header, the dates in the Bid’s Header on COMMBUYS shall prevail. Bidders are responsible for checking the Bid record, including Bid Q&A, on COMMBUYS for Procurement Calendar updates.

3. Submission of Bid Questions The “Bid Q&A” function in COMMBUYS allows Bidders to ask written questions and receive written answers regarding this Bid. All questions must be submitted through the Bid Q&A found on COMMBUYS (See “Locating Bid Q&A,” below). Questions must be asked prior to the Deadline stated in the Estimated Procurement Calendar. The Strategic Sourcing Team (SST) reserves the right not to respond to late questions. Bidders are responsible for verifying that their questions are recorded in COMMBUYS and appear on the Bid Q&A page.

Questions submitted to the SST outside of COMMBUYS will not be answered.

Content entered must be suitable for public viewing. Bidders must not include inappropriate content, including but not limited to, information that could be considered personal, security sensitive, inflammatory, incorrect, or collusory. The SST reserves the right to edit or delete any inappropriate content.

All answers are final when posted. Any subsequent revisions to previously provided answers will be dated.

Bidders and awarded Contractors are required to view the COMMBUYS requirements associated with this bid are responsible for compliance with those requirements.

4. Pre Bid Conference Interested bidders are invited to call into the RFR teleconference as specified in the Procurement Calendar. The call-in number is 1-650-479-3208; meeting access code 669299059. Questions regarding the terms and conditions of the RFR, COMMBUYS, the procurement schedule and Exhibit 1 will be addressed.

5. Locating Bid Q&A Log into COMMBUYS, locate the Bid, acknowledge receipt of the Bid, and scroll down to the bottom of the Bid Header page. The “Bid Q&A” button allows Bidders access to the Bid Q&A page.

6. Bid Amendment Deadline The SST reserves the right to make amendments to the Bid after initial publication. It is each Bidder’s responsibility to check COMMBUYS for any amendments, addenda or modifications to this Bid, and any Bid Q&A records related to this Bid. The SST and the Commonwealth accept no responsibility and will provide no accommodation to Bidders who submit a Quote based on an out-of-date Bid or on information received from a source other than COMMBUYS.

7. Late Bids will not be considered Bid responses must be received in full by the posted due date and time. Proposals received after the deadline will be late and ineligible for consideration and deemed as non-responsive. Each bidder must submit all required bid response forms electronically through COMMBUYS. When submitting a quote electronically through COMMBUYS, please allow sufficient time to complete the online forms and upload documents. The solicitation will end at the closing time listed in the RFR. If you are in the middle of uploading your proposal at the closing time, the system will stop the process and your quote will not be completed and received by the system.

8. Debriefing The SST will conduct debriefings for unsuccessful Bidders, if requested within 14 calendar days of the resulting Master Blanket Purchase Order being posted on COMMBUYS. The SST will provide debriefing guidelines in advance of each debriefing.

9. Applicable Procurement Law:

10. Acquisition Method:

The acquisition method(s) to acquire goods and/or services from this Bid are identified below.

11. Anticipated Contract Awards:

Check One (“X”):

a. Estimated Number of Awards Multiple bidders may be qualified based on the results of technical evaluations. However, only one Contractor will be awarded a contract to serve any individual account.

Depending on the account groupings, the SST may award contracts to more than one (1) Bidder, if it is in the best interests of the Commonwealth to do so.

b. Adding Contractors after initial Contract Award If, over the life of the Contract, the SST determines that additional Contractors should be added, these may first be drawn from qualified bidders which responded to this Solicitation but were not awarded contracts. If necessary to meet the requirements of the Commonwealth, the Solicitation may be reopened to obtain additional bids.

12. Entities Eligible to Use the Resulting Contract Statewide Contract – Open for Use by All Eligible Entities. Any Contract(s) resulting from this Bid will be open for use by the following entities:

1. Cities, towns, districts, counties and other political subdivisions;

2. Executive, Legislative and Judicial Branches, including all Departments and elected offices therein;

3. Independent public authorities, commissions and quasi-public agencies;

4. Local public libraries, public school districts and charter schools;

5. Public hospitals owned by the Commonwealth;

6. Public institutions of higher education;

7. Public purchasing cooperatives;

8. Non-profit, UFR-certified organizations that are doing business with the Commonwealth;

9. Other states and territories with no prior approval by the State Purchasing Agent; and

10. Other entities when designated in writing by the State Purchasing Agent.

Each eligible entity is responsible for executing its own purchase orders and paying its own invoices for goods and/or services acquired from this Contract. Contractors will be responsible for marketing their goods and/or services to Commonwealth Agencies and other eligible entities.

13. Anticipated Contract Duration:

Initial Duration

Total Maximum Contract Duration

14. Estimated Value of the Contract The estimated value of purchase(s) resulting from this Bid can be found in Exhibit 1. The Commonwealth makes no guarantee that any commodities or services will be purchased from any Contract resulting from this Bid. Any estimates or past procurement volumes referenced in this Bid are included only for the convenience of Bidders, and are not to be relied upon as any indication of future purchase levels.

B. Procurement Scope and Description The Massachusetts OSD is requesting responses for the supply of all natural gas commodity components, up to the Delivery Point including but not limited to natural gas commodity, transportation and delivery (including any/all directly related ancillary and/or incidental services necessary), to service the load of the various facilities in the Commonwealth of Massachusetts.

Commodities: 83-10-16 C. Bidder Qualifications The following information must be provided using the Bidder Response Form attached to this Bid. Interested bidders will be qualified based on an evaluation of their submitted Vendor Response Package Bidder General Information The Bidder shall provide company name, company address, company phone number, company fax number and Internet address.

Designated Account Manager/Project Team The Bidder must provide a resume of the designated account manager who will be responsible for the overall management, reporting and ensuring adherence to the performance measures of this contract during normal business hours. This individual should have at least 3-5 years of direct customer account management experience. Since this person will be responsible for day-to-day management of this contract, OSD anticipates that this person should not be an officer of the company or any individual without the available time to effectively manage the contract. The designated account manager is required to be responsive to OSD requests, ideally within 24 hours, and responsible for contract management.

The Bidder must include The Account Manager’s resume with relevant past experience in managing contracts, ensuring adherence to performance measures, and satisfying contract directed reporting requirements).

Licensing and Certification The Bidder must show that it holds all necessary licenses including a Massachusetts Department of Public Utilities (MDPU) supplier license number. Since OSD anticipates aggregating accounts and loads together for pricing purposes, bidders will need to be licensed and have agreements in place with all local distribution companies (LDCs) included in Section A.1 of the RFR in order to bid on the Commonwealth’s requirements. Provide proof your firm has agreements in place with each LDC you plan to provide bids on. Proof in the form of a docket no., date of application, and date of approval is sufficient evidence.

Experience The Bidder shall demonstrate that it possesses experience providing firm supply of natural gas to retail customers in deregulated markets and is not merely acting as a broker. The Bidder shall provide a narrative describing experience in deregulated natural gas markets, including Massachusetts. The Bidder must state the number of years the firm has been providing natural gas in Massachusetts. The bidder must provide the magnitude in dekatherms (Dths) of natural gas supply contracts transacted during the past two (2) years in Massachusetts. The Bidder must provide two (2) examples of large-scale natural gas procurements that your firm is currently serving or has served in the past three (3) years with at least 25 accounts and an annual volume of at least 750,000 Dths.

Customer Service The Bidder must provide the following information on business relations, customer satisfaction, timeliness and accuracy of bills, and customer service operations including established customer service numbers and e-mail addresses. OSD intends to verify the Bidder’s past performance information by contacting at least two (2) references provided and others as appropriate. The Bidder shall provide a narrative addressing the Bidder’s ability to effectively and efficiently administer retail natural gas contracts in deregulated markets and how any continuity of service problems will be addressed. The Bidder’s effectiveness of contract administration management and willingness to assist with routine matters and unexpected difficulties. A description of the current billing operations and whether this is an in-house operation or out-sourced entity. The timeliness of customer enrollments as well as corrective actions the bidder will take in the event of any enrollment difficulties experienced in deregulated markets.

Billing As a separate document, the bidder must provide a sample bill. The Commonwealth requires bills to include the following items: supplier account number, utility account number, account name, volume billed, price per dth, total cost, whether the volume billed was based on estimated or actual data, starting and ending meter read dates for the bill, state contract number (ENE50). Ideally, the Commonwealth would like to also see line loss information on the bill but if that is not possible, it can be distributed to participants through an annual circular or other means. Any additional charges and transactions occurring during the billing cycle (i.e. payments applied, unpaid balance, late charges, credit memos and other adjustments) must also be clearly identified on the bill. In addition, it is necessary that a unique invoice number be clearly identified on the bill for each account as this will assist end-users and contractors in resolving any billing questions during the term of the contract.

References The Bidder must provide a total of five (5) references. Please provide the name and title of the contact, company name, account size, phone number and email address. The Commonwealth of Massachusetts reserves the right to verify Bidders experience and references. The same clients cannot be used for the government entity references. Vendors are responsible for ensuring contacts are aware they are being used as references.

Two (2) references must be from a government entity (federal, state, or municipal) for which your company has provided natural gas supply within the last two (2) years. These references can be for customers within Massachusetts or for customers located in other states. Three (3) references with accounts being served in the deregulated Massachusetts’s natural gas market.

Financial stability including DUNS report, bankruptcy, litigation and contract defaults The Bidder shall submit on the Bidder Response Form a description of any and all investigations, indictments or pending litigation by any federal, state or local jurisdiction relating to the bidder, any officer, director, partner or member thereof, any affiliate or any related company and any other requested information.

a. Financials The bidder shall provide a URL link to, or electronic copy of, the firm’s most recent audited financial statement and annual report or a link to the reports. The Bidder must provide their most recent Standard & Poors and/or Moodys credit rating information available to include any applicable support documentation.

Additional Information The Bidder must describe their online customer portal or other online capabilities Specifications Additional required terms appear in the Appendices to this RFR

1. Commodity Specifications All quantities required to be delivered to facilities included in this Contract, for both Pricing Options described below, shall be considered full requirements and guaranteed for delivery by the Contractor to the Delivery Point. This usage will include weekdays, weekends, Holiday usage.

The winning Contractor will be responsible for the following duties:

a) Supply of firm natural gas supply for delivery to the various facilities listed in Exhibit 1 including interstate pipeline line losses;

b) Manage, nominate and schedule transportation service with the Local Distribution Company (LDC) to the citygate for each account and coordinate delivery of gas to the burnertip;

c) Communicate directly with the LDC to balance scheduled and actual receipt and delivery of the facility’s gas pursuant to the LDC’s Transportation Service Agreement and this contract;

d) Coordinate its actions with the LDC and the agency point of contact for each account;

e) Assist the customer in converting index plus basis prices into a fixed price if requested;

f) And to perform all other incidentals necessary to execute the duties set forth in subsections (a), (b), (c) (d) and (e) above.

2. Service Specifications The following define the service specifications.

a. Delivery Point The “Delivery Point” for such natural gas shall be that point on the distribution system at which the LDC takes possession and ownership of the natural gas supply (citygate) for final delivery to the meter(s) of the specific facilities (burnertip). This same Delivery Point shall be where the facility takes title to the natural gas though Contractor’s are required to manage the natural gas to the burnertip.

b. Continuity of Service It shall be the Contractor’s responsibility to coordinate with the LDC as necessary to resolve issues related to the LDC’s regulated services and to ensure the reliable provision of natural gas to the facilities included in this Contract. Metering services shall continue to be provided by the LDC.

c. Nominating and Balancing Responsibilities It is the Contractor’s responsibility to conduct all required nominations on behalf of the facilities specified herein. The Contractor shall be fully familiar with the imbalance policies, interstate/intrastate transmission losses of the LDC and other interstate/intrastate transmission companies. Any costs or penalties associated with these items will be the sole responsibility of the Contractor. Any charges passed through to the facility by the Contractor for balancing, nominating, storage, pooling costs, upstream and capacity requirements, billing charges, etc. will be passed through at cost and will exclude any penalties caused by the Contractor. Any utility assets assigned to the facility will be used solely for the transport of natural gas purchased for the facility.

d. Risk of Loss Risk of loss of natural gas supplied under this Contract shall remain with the Contractor until, and risk shall pass to the Commonwealth upon, delivery of said natural gas to the Delivery Point specified for each facility.

e. Regulatory Changes If, during the term of this contract, unanticipated regulatory changes shift costs from the LDC to the Contractor or from Contractor to the LDC, then such costs or credits shall be charged to the Commonwealth of Massachusetts at cost subject to review and approval by OSD at least 30 days prior to the regulatory change taking affect.

If, during the term of this contract, regulatory changes create additional costs not currently included in the contract price or increases in the cost components of the price awarded, which the Commonwealth of Massachusetts would be subject to regardless of whether it was receiving service from the Contractor, the LDC or any other provider of natural gas service (“Incremental Charge”), and the Contractor is unable to mitigate such incremental charge, then the Contractor shall charge such incremental cost to the Commonwealth of Massachusetts. OSD and the Contractor will bi-laterally negotiate how these charges are addressed in terms of billing.

Any anticipated regulatory changes that OSD wants bidders to include in their bid prices on auction day will be communicated to bidders prior to the auction and specified on the bid platform. All other anticipated regulatory changes that have not been approved as of the auction date should not be included in bid prices.

f. Credit for Default Service If at any time (unless under a condition of Force Majeure) an account covered by this contract is forced to accept LDC Tariff Rates from the LDC serving in its capacity as the utility contractor of last resort due to the fault of the Contractor, the Contractor shall be responsible for payment of any additional natural gas costs incurred over and above the contract award price. Force Majeure in terms of this contract will refer to any of the events described in the definitions section of this contract.

g. Material Change The facility manager will make every effort to promptly notify the Contractor and Strategic Sourcing Services Lead in writing via email or facsimile of any construction projects, furnace outages, boiler shutdowns and additions, maintenance of equipment, Executive Orders and Public Laws and Regulations, or the facility electing to switch to an alternate fuel source that may impact a facility's historical usage by more than 25% (a "material change"). Additionally, a material change cannot be caused by increases or decreases in operating hours, caused by fluctuations in the weather or by a declared State of Emergency or Force Majeure events. If the facility provides advance notice to Contractor of any material change, Contractor will pay any penalties imposed by relevant market entities. If the facility fails to notify Contractor of a material change, the facility shall pay all penalties imposed by relevant market entities.

h. Account Enrollment The Contractor will be responsible for switching accounts from the applicable LDC (or third-party contractor) to Contractor and fulfilling any obligations with the LDC to that end. If the Contractor fails to switch accounts within the terms specified in this contract, penalties may be assessed based on the difference between the Applicable LDC Tariff Rate and contract award price for the period of time the account remained on LDC service. OSD will make its best effort to ensure that all accounts included under this RFR and the resulting auctions are transportable. However, it is the supplier’s ultimate responsibility to verify that accounts are transportable. All costs associated with a supplier not being able to service an account based on non-transportability issues will be borne solely by the supplier. If a utility requires a new meter to be installed in order to take third-party natural gas supply, it is the Contractors responsibility to notify OSD prior to enrolling the account.

Additionally, the Contractor will be required to provide a spreadsheet clearly identifying each account number being served as a result of contract award(s) and the service start date for each of these accounts. This spreadsheet will be due to OSD and Enel X as per the Estimated Procurement Schedule in Section A.2.

Facilities in leased space that are responsible for paying their own natural gas bills will be allowed to participate in this Contract. Based on the information available to OSD at the time of this RFR release, no leases are scheduled to terminate over the next thirty-six months for accounts included in the Exhibit 1. Notes regarding any differences in service end dates for any account, including accounts in leased space, will be clearly identified in the notes section of Exhibit 1.

i. Adding and Deleting Facilities to this Contract after Initial Start Date For a variety of reasons, it is possible that certain authorized facilities eligible to compete their natural gas requirements but not included in Exhibit 1 may request to satisfy these requirements by use of this Contract. In that event, OSD shall provide an estimate of the facility’s natural gas requirements and the Contractor will be required to provide a price for new accounts under the same Terms and Conditions as this Contract. OSD will have the ability to decline the price if it is not in the Commonwealth’s best interest. Adding facilities shall be accomplished through either a bilateral execution of an Additional Account form or a subsequent auction. The specific method used will be at the discretion of OSD.

In an applicable LDC where the policy is to change account numbers upon enrollment with a third-party contractor; the facility will not be considered an addition even if a new account number is assigned. If the LDC deems appropriate to change an account number for a facility during the term of this Contract, this will also not be considered an addition and it will continue to be served at the contract award price for the full term of the contract.

It is also possible that some accounts that are enrolled under this contract may subsequently be deleted at the facilities request. Deleting an account will be handled under the below Special Contract Termination – Liquidation of Contract Positions language and execution of a contract modification.

At any time following contract execution or during the term of this contract, OSD may terminate service to an individual account or accounts specified herein. The agency responsible for the account (s) will pay any penalties imposed by the LDC or other appropriate authority associated with such termination in the event the subject contract account(s) were properly enrolled as required pursuant to the Account Enrollment language included in this RFR.

If possible, OSD will provide thirty (30) days prior notice of termination to the Contractor. Upon termination of an enrolled account(s), Contractor will return such account(s) to LDC service on the next available meter read date as determined by the LDC, and the party's respective obligations under this contract will cease on that meter read date. At the time the enrolled account(s) is terminated the Contractor will make a reasonable assessment of the difference between the Contract Price (Price A) and the market based price for the same supply at the time the contract is terminated (Price B). If Price A is greater than Price B, the agency responsible for the account (s) shall pay the Contractor the difference between Price A and Price B. The Contractor's assessment of Price B shall include any incidental costs such as administrative costs, brokerage fees, transmission or increased tax costs for termination, provided such incidental costs are reasonable and fully documented. Calculations of Price B shall be itemized and supported by appropriate proofs of payment or settlement resulting in the total amount resulting from the termination and provided to OSD for approval prior to any payment being made by the agency responsible for the account.

j. Contract Termination or Suspension Section 4, of the Commonwealth Terms and Conditions; entitled Contract Termination or suspension, provides that the Commonwealth may terminate the Contract without cause. The Commonwealth hereby notifies all Bidders that it will not exercise the termination provision without cause except in the case of emergency.

k. Special Terms and Conditions All of the powers, protections, benefits, and terms and conditions of this Contract, applicable to the Commonwealth or the State, that are contained in the Standard Commonwealth Terms and Conditions, including, but not limited to the indemnification and risk of loss provisions, shall apply to all Eligible Entities that choose to participate in this Contract. Eligible Entities is defined in Section 8 of this RFR.

Any reference in the Contract documents, including but not limited to this RFR, the Commonwealth Terms and Conditions, and the Commonwealth of Massachusetts Standard Contract Form and instructions, to the terms Agency, Agencies, Commonwealth of Massachusetts, Commonwealth or State shall include all Eligible Entities participating in this Contract as defined in Section 8 of this RFR.

l. Notes and Instructions Regarding Exhibit 1 The quantities shown in Exhibit 1 are estimated load requirements and are based upon the best information available to OSD through the LDC at the time this RFR was issued. The load information submitted is intended as an estimate of the magnitude and nature of the loads during a specified time period. Such estimates are being furnished for informational purposes. The State does not warrant the accuracy of the usage information provided and the Contractor will be entitled to no additional compensation and no equitable adjustment of price if actual load requirements vary except as expressly detailed under Material Changes, Service Interruptions, Load Reductions and Pricing Product Definitions. Since it is impossible to determine the precise quantities that will be needed during the contract term, each Contractor shall be obligated to furnish each facility’s natural gas requirements in full to the Delivery Point during the term of this contract.

m. Quality and Measurement The contractor is solely responsible for the quality of gas upstream of the citygate. Measurement, testing, heating value, delivery pressure, and quality of natural gas supply delivered shall be in accordance with the applicable interstate/intrastate pipeline specifications. The facility shall not be obligated to purchase or pay for natural gas that either the LDC or the interstate pipeline has refused to accept due to nonconformance with its specifications. The Contractor shall furnish all labor, materials, tools, equipment, and incidentals to supply and deliver direct supply natural gas to the LDC citygate(s). The Contractor shall adhere at all times with applicable LDC tariff, agreements, rules and regulations.

n. Line Losses The data provided in Exhibit 1 is historical usage for the facilities and is for usage baseline and planning purposes only. The historical volumes provided are burnertip usage. Initially, all line loss quantities will be calculated using the current line loss factor specified for each LDC. The Contractor is responsible for the analysis of all account data available and the acquisition of adequate quantities for each facility.

If LDC line loss factors change during the term of this contract, suppliers will be allowed to revise their line loss factors but are required to notify OSD of the change thirty (30) days prior to issuing an invoice that includes the new line loss factor.

Regarding billing requirements associated with line losses, OSD requires the total citygate volume to be billed and all line losses included in billed volumes. Bidders should review the billing requirements specified in the Vendor Response Form.

For any utility that invoices in Cubic Feet (CCF), the vendor agrees to work with OSD to determine a mutually agreeable conversion and invoice process.

o. Service Interruption In the event the LDC issues an interruption, supply curtailment, gas production period, operational flow order, etc.; the Contractor is to notify the facility point of contact and the SSTLead prior to the event in writing via email or facsimile with the starting and ending dates and times of the restrictions.

p. Payment and Billing For the purposes of this Contract, the Commonwealth shall pay the Contractor through monthly utility bills rendered by the Contractor for each account included in this contract in accordance with the applicable LDC’s dual billing procedures. The Commonwealth requires that Contractors allow for payment of bills using Electronic Fund Transfers (EFTs) at the option of the Commonwealth. The Contractor shall base all invoicing on metered quantities at the customer meter. If estimated usage values are used, the contractor shall adjust all estimated usage values to actual metered consumption levels no later than one (1) month after actual usage volumes are provided by the utility. Contractors will be required to include any price components on the invoice other than the awarded price as itemized line items.

The Commonwealth requires bills to include the following items: supplier account number, utility account number, account name, volume billed, price per dth, total cost, whether the volume billed was based on estimated or actual data, starting and ending meter read dates for the bill, state contract number (ENE50). Ideally, the Commonwealth would like to also see line loss information on the bill but if that is not possible, it can be distributed to participants through an annual circular or other means. Any additional charges and transactions occurring during the billing cycle (i.e. payments applied, unpaid balance, late charges, credit memos and other adjustments) must also be clearly identified on the bill. In addition, it is necessary that a unique invoice number be clearly identified on the bill for each account as this will assist end-users and contractors in resolving any billing questions during the term of the contract.

Compensation Structure/Pricing Awarded suppliers will be compensated on a per Dth basis.

The Commonwealth is interested in two (2) types of pricing. Each of which is described below.

Pricing Option 1 – Firm-Fixed Price The supply of natural gas to be provided to each account under Pricing Option 1 shall be one hundred percent (100%) usage, full requirements, firm fixed price option with no guaranteed usage/volumes to the contractor and no usage restrictions to the Commonwealth. The Commonwealth shall be invoiced monthly on actual usage at the awarded contract price, with unlimited usage. During any month of delivery for the term of the contract, the Commonwealth may over or under burn the estimated quantities as specified by month for each account listed in Exhibit 1. In both over burn and under burn scenarios, the Commonwealth shall be invoiced at the awarded contract price for actual usage. For example, if the Commonwealth burned 50% of the monthly historical usage, the Commonwealth shall be invoiced at the awarded contract price multiplied by actual usage. If the Commonwealth burned 150% of the monthly historical usage, the Commonwealth shall be invoiced at the awarded contract price multiplied by actual usage. A full product specification is provided in the table below.

Other Terms & Conditions

Pricing Option 2 – Index + Basis Price The supply of natural gas to be provided to each account under Pricing Option 2 shall be a basis price which includes all transportation costs but does not include the cost of natural gas commodity. This is commonly called locational differential. The customer requires full swing. Please note that if this product is converted into a firm-fixed price over the term of the contract, the resulting firm-fixed price will be for full swing as described in Pricing Option I. The basis price shall include all contractor costs associated with delivering gas to the delivery point. A full product specification is provided in the table below.

The Commonwealth shall have the right during the term of this agreement to lock-in a fixed price for any or all month(s) remaining in the term of the contract by notifying the Contractor of the Commonwealth’s desire to do so. The Commonwealth will provide the contractor with a notice identifying the month(s) and estimated monthly volumes it desires to lock in. The Contractor will be required to provide a fixed price under the same Terms and Conditions as this Contract. OSD will have the ability to decline the price if it is not in the Commonwealth’s best interest. OSD will provide the notice at least three days before the prompt month’s settlement date.

The Commodity Price to be paid under Pricing Option 2 shall be a per Dth unit price multiplied by the volume of gas delivered and accepted by the LDC for each Commonwealth account. The monthly per Dth commodity price shall be equal to the prior month’s settlement price as published at: http://www.cmegroup.com/trading/energy/natural-gas/natural-gas_product_calendar_futures.html.

Other Terms & Conditions

Basis for Award OSD may request one or all of the above pricing options for any specific account or set of accounts. Awards will be made on the basis of best value to the Commonwealth.

Bidders whose responses meet the technical requirements will be qualified to participate in an auction pricing event. Bidders are not required to offer pricing for every pricing group offered; however pricing submitted for a pricing group must apply to all accounts contained in that pricing group. Pricing will be submitted via an on-line auction. The Bidder agrees to hold the prices in its price proposal firm until 2:00 PM ET on the auction date. All bids entered into the auction are considered binding. All awards will be made no later than 2:00 PM EST the day of the auction.

OSD reserves the right to establish alternative pricing groups to those specified in Exhibit 1 and to seek price proposals for such alternative pricing groups from qualified vendors as part of this RFR.

Reverse Auction Participation and Procurement Fee Payment The awarded natural gas contractor(s) hereby agree to assess a procurement fee, to be paid to Enel X, on all…