Electricity RFI Sources Sought_Italy Electricity.docx

Description This sources sought (SS) and request for information (RFI) is for planning purposes only and shall not be considered as an invitation for bid (IFB), request for quotation (RFQ), request for proposal (RFP), or as an obligation on the part of the Government to acquire any products or services. The Government will not award a contract on the basis of this notice, or otherwise pay for information solicited by it. No entitlement to payment of direct or indirect costs or charges by the Government will arise as a result of contractor submission of responses to this announcement nor the Government's use of such information. Interested parties are responsible for adequately marking proprietary or competition sensitive information contained in their response. The requested information is for planning and market research purposes only and will not be publicly released. Responses to this RFI are not offers and cannot be accepted by the Government to form a binding contract. However, the Government is anticipating the release of a solicitation for the requirements outlined below later this year through the United States Government’s solicitation portal (https://sam.gov/content/home).

Please send your answers no later than 15 March 2024.

The Naval Facilities Engineering Systems Command (NAVFAC) Navy Region Europe, Africa, Central (EURAFCENT) is seeking comments on draft requirements, market research, potential sources, and best practices information for the supply of low and medium voltage electricity at approximately 50 delivery points.

Constructive feedback, suggestions, and solutions are requested.

Annual estimated electricity consumption (to be revised at time of solicitation published)

NAVFAC EURAFCENT anticipates issuing a Solicitation that will result in the award of at least one (1) Firm-Fixed Price Agreement or Market-Based Price Agreement for the supply and transmission of electricity and ancillary services to Sicily, Campania, and Air Aviano, no later than June 2024 through the United States Government’s solicitation portal (www.sam.gov).

Questions for consideration by contractors are as follows:

1. Pricing mechanism

1.1 Would your company lock into a multi-year Firm-Fixed Price (FFP) contract with the U.S. Navy (USN)? If so:

a. What is the optimal contract term for a large customer on a FFP contract? One, two, three years, or more?

b. What portion(s) of the contract price would your company be able to provide as a fixed component?

c. What would be the maximum amount of days your company would be willing to hold the FFP proposal price for award?

1.2 Would your company lock into a multi-year contract with the U.S. Navy (USN), with a first-year Firm-Fixed Price (FFP) and with succeeding interim price adjustments? In this pricing mechanism the offer energy price will consist of a base Price Index, and of a Transaction Fee (or spread/markup) that will be evaluated for award. The base price index is provided according to a given market formula, and will be recalculated for the interim price adjustments. If so:

a. What is the preferred total number of years of the contract (2 years, 3 years, or more) on a FFP adjustable price contract?

b. What is the preferred timeframe of price adjustments (every 6 months, every 12 months, other)?

c. Which market index would your company prefer be used to calculate the initial FFP base Price Index and the interim price adjustments (EEX Futures; other)?

d. Is your company able to offer a lower price (per unit) than a published market index for the commodity only?

e. Do you normally include a markup fee, or supplier margin, or spread on top of a market indexed price? How is this calculated?

f. What portion(s) of the contract would your company be able to provide as a fixed component?

g. What would be the maximum amount of days your company would be willing to hold the proposal price for award?

1.3 Would your company lock into a multi-year contract with the U.S. Navy (USN), with monthly price adjustments and a fixed transaction fee (or spread/markup, other) that will be evaluated for award ? If so:

a. What is the preferred total number of years of this contract pricing mechanism (1 year, 2 years, 3 years, or more)?

b. Which index would your company prefer be used to calculate the monthly price adjustments (Gestore dei Mercati Energetici [GME] Prezzo Unico Nazionale PUN monthly average; other)?

c. Is your company able to offer a lower price (per unit) than a published market index for the commodity only?

d. Do you normally include a markup fee, or supplier margin, or spread on top of a market monthly indexed price? How is this calculated?

e. What portion(s) of the contract would your company be able to provide as a fixed component?

f. What would be the maximum amount of days your company would be willing to hold the proposal price for award?

1.4 Of the three pricing mechanisms above (1,1, 1.2 and 1.3), which is the one that your company considers the most practicable for an overall low competitive price?

2. Provide insights into additional contract terms, lengths, and price options, including the possibility of customized contracts to suit specific customer needs.

a. What pricing structures outside of FFP can your company offer? (e.g. Variable rate, time of use, tiered, blended, indexed, customized, demand response, and renewable)

b. If more than one additional structure available, which would be the preferred and why?

c. Briefly explain how this structure works

d. What is the preferred contract duration (e.g. 1, 2, or 3 years) for each offered pricing structure and why is that option optimal?

e. What are considerations the USN should be aware of when your company forecasts the bid price for longer-term contracts (beyond 2 years)? For example: Does it take more time to formulate solicitation bid? Does your company have to buy additional hedging or risk products? Is a higher risk premium incorporated into the price?

f. Do your options require a contract demand? If so, are there penalties for not meeting or exceeding that demand?

3. What could be changed in the solicitation terms to increase the ease and likelihood of your company’s response to our solicitation? Please refer to the attached draft solicitation model.

4. Describe your approach to risk management in retail energy procurement.

a. How do you help clients mitigate price volatility and manage energy budgeting effectively?

b. Under what conditions are you willing to enter into firm-fixed price contracts?

5. Describe the overall composition of your energy portfolio

a. Do you own generation or procure through bilateral contracts and/or other means?

b. Please describe how you diversify your supply in terms of generation resources, associated commodity sources (i.e. natural gas), and suppliers.

c. What is the maximum percentage of renewable energy that your company can guarantee for the supply to the US Government? Renewable energy percentage will not be considered as a factor for price evaluation, but will be only for separate and general energy performance evaluation in the USG installations.

6. The USN is considering holding an Industry Day for electricity suppliers to gather information and provide clarification on our upcoming solicitation

a. Would you find it beneficial to participate in an Industry Day? If so, what are some topics that you would like being discussed?

b. Would you be interested in attending this meeting in person?

c. Would you attend if the session was held virtually?

7. If possible, share case studies or references of clients who have successfully implemented your procurement strategies and achieved positive results.

a. What was the recent annual consumption and peak demand of this customer?

b. What procurement strategy was utilized?

8. The USN is exploring procurement of carbon pollution-free electricity (CFE). Share information about any renewable energy procurement options available, including green energy certificates and Power Purchase Agreements (PPAs).

a. Do you offer any green tariff rates that supply partial or full electricity generated from renewable energy?

b. Are you able to allocate a set capacity via contract to specific customers?

c. Would you be able to offer verification of any renewable energy through a purchased certificate (i.e. Energy Attribute Certificate)?

d. Do you participate in the AIB Circuit with Guarantees of Origin?

e. What is your electricity mix of fuel sources? What is your plan for CFE in the next 1-5 years?

f. Is there a preferred contract term for renewable-focused supply customers?