Industry Discussion Debrief.pdf

Industry Discussion Debrief

Industry Discussion:

Introductions: Executive Order (E.O.) 14057, Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability, 86 Fed. Reg. 70935 (Dec. 2021), sets the goal of achieving carbon pollution-free electricity (CFE) on a net annual basis by 2030. In August 2022, the Council on Environmental Quality issued Implementing Instructions for E.O. 14057, providing guidance on how to achieve these goals. In order to track progress, EACs or RECs must be sourced from generation resources that: (1) produce carbon pollution-free electricity, (2) were placed in service on or after October 1, 2021, either as a new resource or as new capacity at an existing resource modified to increase output; and (3) deliver carbon pollution-free electricity to the same grid region of Federal facility consumption.

The goal of this RFI is to ask targeted questions in specific markets, starting in ERCOT, to get feedback on how to structure an acquisition approach and move to the next step of procuring CFE consistent with the elements outlined in the Implementing Instructions.

Grid-supplied CFE questions: We recognize the value of the CFE already on the grid, so the questions on the RFI on grid-supplied CFE get to that issue. How do we value the CFE already on the grid and how do we procure new CFE as well?

Opened meeting for discussion:

Q: The initial thrust of the campaign is in ERCOT, is that right?

A: The RFI is aimed at the whole U.S. Government, all markets. We are applying a “whole of government approach,” moving towards CFE in every market;

however, the first opportunity GSA has to really pursue this new approach will be in ERCOT. That solicitation will contain a requirement for CFE. That said, if you offer CFE outside of ERCOT, we want to hear from you, because we are moving forward procuring CFE in every market.

Q: Do we have a calendar established of when you will proceed with CFE in other markets?

A: We are attaching a chart to this RFI with that information. You may also search on the public website www.FPDS.gov for energy purchases to find existing contracts and when they expire. We can walk you through searching this website. Email Bonnie.Bueter@gsa.gov for step-by-step instructions.

Q: 24/7 matching was not listed as one of the (CFE) criteria. Is that intentional?

A: The guidance in the Implementing Instructions focuses on the annually matched requirement to get to the 100% goal. The Implementing Instructions note that guidance to agencies on the 24/7 requirement will be forthcoming and states that agencies should consider that CFE procurements will need to meet the 100 percent net annual and 50 percent 24/7 hourly targets.

Q: Is balancing authority anywhere in ERCOT or are you looking at ERCOT North, ERCOT Houston, etc…?

A: For the purposes of the upcoming procurement, ERCOT will function as one balancing authority. The solicitation will clearly state the balancing authority for each solicitation. There shouldn’t be any confusion once you read the solicitation, but suppliers can also ask for any clarifications during the associated questions and answers session. Here is a link to the FEMP website which gives more information on Balancing Authority.

We understand that the primary risk here is basis risk between the load zones / congestion nodes, but we’d like supplier’s feedback as to whether or not there are any additional risks associated with how the balancing authority boundaries are defined. We want to be aware of any constraints that are being imposed and challenges associated with it for accounting purposes that have an impact on the ability to provide CFE. That would be helpful to have in response to the RFI.

Q: Is the primary driving factor the ability to claim, according to GHG protocol, carbon reduction or zero carbon energy or is it to hedge electricity pricing in ERCOT?

A: The requirement that CFE be delivered to the balancing authority is for accounting purposes and tracking to allow us to understand whether and how we achieved 100% CFE and our progress towards that and to avoid double counting. It is important that we aren't claiming EAC’s that someone else is also claiming. So, there is an accounting piece and delivery piece. Hedging our power prices is also important. Discussion of how we should pull those two strands together would be helpful to have in response to the RFI.

Requiring delivery to a balancing authority in this context is a change for GSA. In the past we could satisfy our New York renewable requirements with RECs from wind energy projects out of ERCOT, but that will no longer qualify under the requirements of the Executive Order and Implementing Instructions.

We must show that we are having a direct effect on the grid. That should be clear from the Implementing Instructions and from the RFI, but we welcome any comments or concerns or questions, because this is different from how we have been doing things in the past.

The decision to require that CFE be delivered to the same grid region of Federal facility consumption is a policy decision, in order to combat the climate crisis in each grid region and not a procurement decision to hedge electricity pricing in

ERCOT.

Q: What is the process for receiving feedback from the RFI responses?

A: RFI responses are strictly confidential and will only be shared with internal federal agencies. We will reach out if we have specific questions regarding your response. We do not anticipate publishing a public summary.

Q: The procurement schedule is coming up quickly, what is the timeline for feedback?

A: We will look for responses that directly relate to ERCOT, then we will look at the broader picture. Responses will directly inform our solicitation, but the solicitation itself is expected to be the same process as normal.

Q: Should suppliers expect consistency within and across all the government agencies?

A: That is the goal, however the solicitation process is very particular to agencies' needs and specific to particular markets, so they won’t be uniform. Suppliers should recognize the requirements in the E.O. and Implementing Instructions and the common definition of CFE throughout.

In Closing: Responses need to be emailed to CFESupport@gsa.gov

We recommend following the RFI on SAM to get notifications of any changes and notification when questions are posted.

We are looking for recommendations, you may offer information above and beyond the questions on the RFI. Do not feel limited to the questions. Please offer solutions and give additional input.

GSA is hosting this call, but we will share responses with other Federal agencies involved in the procurement of CFE. For instance, the Defense Logistics Agency (DLA) procures electricity in many different markets for the Department of Defense (DOD). Please answer questions or provide feedback that is unique to DOD needs, as suppliers are not restricted to GSA procurements only.