NS Rota Electrical Service Sources Sought.pdf

Sources Sought (SS) - Request For Information (RFI)

Classification Original Set Aside:

Product Service Code: S112 – Utilities- Electric NAICS Code: 221121 – Electric Bulk Power Transmission and Control Place of Performance: Spain

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 (www.sam.gov).

Please send your answers no later than 29 November 2023.

The Naval Facilities Engineering Command (NAVFAC) Europe Africa Central (EURAFCENT) Command is seeking comments on draft requirements, market research, potential sources, and best practice information for the supply of high voltage, 2nd category (66 kV) electricity at:

Naval Station (NS) Rota whose location on the electrical grid is identified by the NIF/CIF N4001073H and CUPH EH0031102555053001GD0F and is located in Rota. Annual electricity consumption is approximately 91,710 MWh in Rota. Constructive feedback, suggestions, and solutions are requested.

NAVFAC EURAFCENT later plans to issue a Solicitation that will result in the award of one (1) Firm-Fixed Price Agreement for the supply and transmission of electricity and ancillary services to United States Navy (USN) Base in Rota, Cadiz, Spain no later than February 2024 through the United States Government’s solicitation portal (www.sam.gov).

Firm-Fixed Price Agreement

The USN defines a Utilities Firm Fixed-Price Contract as a contract with specific portion(s) of the overall rate set at a constant value for a specified duration. The overall rate per mega-watt-hour (MWh) can include the following:

Commodity: energy sales price separate from regulatory tariff components as set by the Spanish government Markup or Transaction fees: vendor fees not associated with regulatory tariff components as set by Spanish government

The fixed portion of the contract price can take one of three forms:

Fixed Commodity Price: In this scenario, the fixed portion of the price corresponds to the cost of the electricity supplied. This rate is determined by the vendor based on market conditions and forecasts at the commencement of the contract. This fixed commodity price would remain the same for the entire contract length or updated periodically at an interval and methodology established in the contract.

Fixed Mark-up or Transaction Fee: In this scenario, the fixed portion of the price corresponds to a transaction fee that is separate from the commodity market price, which may fluctuate according to a pricing mechanism as outlined in the contract (often a published indexed price).

This transaction fee would remain constant throughout the contract period or can be updated to preestablished values at an interval outlined in the contract.

Fixed Commodity Price and Mark-up or Transaction Fee: The fixed portion of the price encompasses both the commodity price, based on analysis of the market at the contract's commencement, and the fixed transaction fee. Both the commodity price and transaction fee may be adjusted at an interval and methodology established in the contract.

One of the pricing methodologies above will be chosen and communicated when the solicitation is posted.

Questions for consideration are as follows:

1- Would your company lock into a multi-year firm-fixed price contract with the USN? If so,

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

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

c. Which indices are used to establish the commodity market price? (e.g. OMIE Day

Ahead Market Hourly Spot Price, European Energy Exchange (EEX) etc.)

d. If the contract length is longer than 12 months, would your company be open to price adjustments of the fixed portion? If so, what is the preferred interval?

e. What are the items outside of a “fixed price” energy supply charge in Spain (e.g.

access rate (“Tarifa de Acceso”), losses coefficient, capacity payments, system operator charges, market operator charges)

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- The USN is prohibited from using energy sourced directly from the Russian Federation for purposes including heating, cooling, and electricity. Can your company provide electricity to the USN installation(s) without these commodities being sourced directly from a Russian supplier?

a. If so, can you provide assurance and verify this?

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

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

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

5 years?

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

Attachment 1: Draft Solicitation Model