Q_A_Addendum_FINAL.pdf

STATE OF CALIFORNIA – CALIFORNIA NATURAL RESOURCES AGENCY GAVIN NEWSOM, Governor

DEPARTMENT OF WATER RESOURCES

715 P STREET, 7th FLOOR P.O. BOX 942836

SACRAMENTO, CA 94236-0001

REQUEST FOR PROPOSAL PRIMARY

ADDENDUM # 1

ANSWERS TO TECHNICAL QUESTIONS

SOLICITATION # 10203603

NOTICE TO PROSPECTIVE BIDDERS

March 13, 2026

To All Prospective Bidders:

Request for Proposal (RFP) #10203603 for Credit Management Services has been revised.

Addendum #1 includes the following:

A) Changes made in the Request for Proposal are as follows:

1) Changes made to Section C, Page 4, Proposal Requirements and Information, Proposal Key Action Dates.

All proposing firms must adhere to the following time schedule.

Proposals must be received by April 3, 2026 by 3:30pm Anticipated date of proposal opening April 8, 2026 at 9:30am Anticipated start date of agreement is May 8, 2026

All other statements of the original solicitation will remain the same.

B) DWR received the following question(s):

Q1. Is there an incumbent contractor currently providing the required services? If so would DWR be willing to disclose who?

A1. DWR does not currently have an incumbent contractor performing the services described in this solicitation.

Q2. If there is an incumbent contractor, how are they currently fulfilling the required scope of work?

A2. DWR does not currently have an incumbent contractor performing the services described in this solicitation.

Q3. If there is an incumbent contractor, what personnel roles at DWR are working with them to accomplish the required scope of work?

A3. DWR does not currently have an incumbent contractor performing the services described in this solicitation.

Q4. If there is not an incumbent contractor, what personnel at DWR are currently responsible for accomplishing these tasks?

A4. DWR does not currently have an incumbent contractor performing the services described in this solicitation..

Q5. What is DWR’s budgeted value for this contract?

A5. DWR does not disclose the budgeted contract value for this solicitation. Proposers should submit pricing in accordance with the Cost Proposal Worksheet provided in the RFP.

Q6. Are there any page or formatting limitations associated with the Technical Proposal?

A6. There are no format limitations. The RFP requests that proposals provide concise and straightforward descriptions of the proposer’s ability to meet the requirements of the Scope of Work. Proposals should follow what is described in the RFP instructions.

Q7. Beyond the estimated number of counterparties in the DWR Counterparty Portfolio (DCP), can DWR provide additional detail on the anticipated types and characteristics of counterparties to be assessed and monitored (e.g., investor owned utilities, municipal utilities, community choice aggregators, renewable developers, financial institutions, or special purpose entities)?

Additionally, to what extent does DWR expect counterparties to involve complex organizational or financing structures, such as parent subsidiary relationships, holding companies, or project level SPVs? This information would assist proposers in aligning analytical methodologies, staffing models, and monitoring intensity to DWR’s actual counterparty risk profile.

A7. DWR’s counterparties include entities participating in wholesale power and renewable energy markets that support the State Water Project’s power portfolio. These may include utilities, energy marketers, renewable developers, financial institutions, and other entities involved in power-related contracts. Counterparties may operate through corporate entities, subsidiaries, or project-level entities commonly used in energy and renewable project financing structures.

Proposers should be prepared to evaluate credit risk at both the corporate and project level and consider credit support mechanisms such as parent guarantees, collateral, or other financial assurances when appropriate.

Q8. Can DWR provide general guidance on the anticipated size range and financial transparency of counterparties (e.g., small, mid sized, or large entities; availability of audited versus unaudited financial statements; public versus private disclosures)? Additionally, does DWR anticipate reliance primarily on counterparty provided financial data, third party data sources, or a combination of both? Finally, does DWR expect material changes over time in counterparty size, complexity, or risk profile as SB 1020 related renewable and net zero resources expand during the contract term?

A8. Counterparties may vary in size and financial transparency and may include both publicly traded and privately held entities. Financial information used for credit assessments may include audited financial statements, unaudited financial statements, publicly available filings, and information obtained from third-party financial data sources and industry reporting. DWR anticipates using a combination of counterparty-provided information and third-party data sources for credit monitoring. Counterparty profiles may evolve over time as renewable and net-zero energy resources expand in support of SB 1020 objectives.

For new unrated entities entering into DWR’s portfolio, DWR will request financials for the initial onboarding of the counterparty. The recipient of the contract will be responsible for updating the ratings and outlook of unrated counterparties afterwards.

Q9. Will DWR also consider requiring agency access to real-time business intelligence on credit standing of counterparties, through a web-based platform for internal assessments and monitoring as well?

A9. DWR requires continuous monitoring of counterparties’ financial condition and timely notification within three (3) business days of any developments that may impact their financial standing. Through a situation report, the contractor will notify DWR of any indication of changes in the financial well-being and outlook of entities found in the DCP via email. Proposers may describe tools, systems, or platforms used to support monitoring, analysis, and reporting processes.

Q10. Can DWR provide clarification on the experience needed by the contractor related to Power Purchase Agreements?

A10. The contractor must have experience in the power and energy industry, including experience related to bilateral energy transactions and Power Purchase Agreements (PPAs).

See Page 4, Minimum Qualifications.

Q11.What is the substantive nature of the Power Purchase Agreements relevant to the provision of the counterparty assessment?

A11. Power Purchase Agreements relevant to this scope of work include agreements associated with DWR’s power portfolio and energy procurement activities, including contracts supporting renewable and net-zero energy objectives under SB 1020.

Q12. Could DWR share its expectations around pricing flexibility and whether alternative pricing structures—such as pricing tied to the volume of entities monitored or investigated—would be acceptable?

A12. The contract pricing structure is described in the Cost Proposal Worksheet and is based on a subscription model tied to the number of entities actively monitored and assessed during each contract year.

Q13. Would DWR be willing to extend the proposal submission deadline to April 3, 2026?

Allowing additional time would enable us to incorporate all clarifications provided during the Q&A process and ensure our response is fully aligned with the agency’s needs and solicitation requirements.

A13. DWR has agreed to extend the proposal submission deadline to April 3, 2026 by 3:30pm.

See Response Above.

Q14. What percentage of the W&S counterparties are rated? And are you only looking at W&S counterparties? Is it national OR specific state- /regional-focus?

A14. Currently, more than 80% of DWR’s counterparties are rated entities. The scope of services is not limited to a specific counterparty category such as Water & Storage (W&S).

Counterparties may include both regional and national organizations participating in wholesale energy markets in California and the broader Western electricity market.

Q15. What data-source will you be leveraging?

A15. DWR expects the contractor to leverage a combination of counterparty-provided information, publicly available financial disclosures, and third-party financial data sources to support credit assessments and ongoing monitoring activities. These sources may include audited and unaudited financial statements, regulatory filings, credit rating agency reports, industry publications, and financial news and reporting services.

The contractor will be responsible for obtaining relevant information necessary to evaluate counterparty creditworthiness, monitor financial condition, and identify indicators that may affect the financial outlook of entities included in the DWR Counterparty Portfolio.

Q16. Expected frequency of monitoring?

A16. The contractor is expected to continuously monitor the financial condition and credit profile of entities included in the DWR Counterparty Portfolio. Monitoring activities should include tracking newly released financial statements, credit rating updates, financial news, and other indicators that may affect a counterparty’s financial outlook.

When new information or indicators become available that may impact a counterparty’s financial condition, the contractor will perform an updated assessment and notify DWR. Notification of material developments should occur within three (3) business days of discovery, and updated reports should be provided within five (5) business days when an assessment is triggered.

Q17. We looked through the state general terms and conditions, and our attorney says that we cannot agree to the indemnification provision in Section 5. The language says the T&Cs are non-negotiable. Please advise if you actually have wiggle room there or not.

A17. Office of General Counsel will not accept changes to the General T&C’s.

*End of Questions*