RFP 20_1868 Schedule A - Statement of Work Utility-scale Solar Development FINAL.docx

Bidder must enter company name here.

STATE OF MICHIGAN

Request for Proposal No. 200000001868 Utility-Scale Solar Energy Development Lease Department of Natural Resources

SCHEDULE A

STATEMENT OF WORK

CONTRACT ACTIVITIES

This schedule identifies the anticipated requirements of any lease/land use permit resulting from this RFP. The term “Contractor” or “Lessee/Permittee” in this document refers to a bidder responding to this RFP.

The bidder must respond to each requirement or question and explain how it will fulfill each requirement. Attach any supplemental information and appropriately reference within your response.

BACKGROUND

The Michigan Department of Natural Resources (DNR) is committed to the conservation, protection, management, use and enjoyment of the state's natural and cultural resources for current and future generations. We strive to protect natural and cultural resources, ensure sustainable recreation use and enjoyment, enable strong natural resource-based economies, improve and build strong relationships and partnerships, and foster effective business practices and good governance.

As a member of the U.S. Climate Alliance, the State of Michigan is committed to taking affirmative actions to address climate challenge by implementing policies that advance the goals of the Paris Climate Agreement, including tracking and reporting progress to the global community and accelerating new and existing policies to reduce carbon pollution and promote clean energy deployment in the State of Michigan. The DNR manages 4 million acres of state forest land throughout Michigan, a portion of which may be suitable for lease for the purpose of utility-scale solar energy development. This project continues Michigan’s progress in converting from non-renewable to renewable energy to implement environmental sustainability across state government.

SCOPE

The State of Michigan seeks proposals from public or private utilities and/or solar development companies to enter into lease and permitting agreements for the purpose of developing, building, and operating utility-scale solar photovoltaic (PV) systems. The DNR has identified projects on underutilized lands located near existing transmission infrastructure that have potential for cost-effective solar installations. This RFP identifies two potential locations on state forest lands in Dickinson and Crawford Counties.

A winning bidder will first enter a Development Lease period that establishes site control for the Lessee and is applicable during the interim development period prior to construction. During the interim development lease period, a Lessee will be granted an annual use permit for preliminary activities that are necessary to assess site suitability for construction of the PV facility (e.g. soil boring, long-term placement of equipment). Prior to construction, a Lessee must enter a Surface Use Lease for the duration of the operating facility. If a site requires additional acreage beyond the Surface Use Lease in order to interconnect the facility with the grid, an additional utility easement lease will apply.

Additionally, a winning bidder’s proposal should reflect the values and mission of the DNR.

REQUIREMENTS

1. General Requirements

1.1. Project Description

The project area will encompass two locations in Dickinson and Crawford Counties.

Groveland Mine The project site is located in T41N, R29W, Sections 5 and 6; and T42N, R29W, Sections 31 and 32 of Dickinson County, Michigan.

· Description of Site: The 673 acre site was formerly part of the Groveland iron mine and being located upon former tailing ponds is a highly disturbed site. The site is mostly open land with some stands of young red pine, white pine and hardwoods. The topography of the site is relatively flat. There are no known environmental contamination issues on the site. The site is public land, open to access.

· Potential Solar Energy Sites Groveland Mine show the proposed extent of the 673 acre project area, elevation contours, and immediate proximity with identified major electric power transmission lines and substations. Project boundaries are conceptual and acreage is subdivided into five labeled units [1-5] based upon former tailing pond levees. Bidders may select specific subdivisions by number or provide a GIS shape file and clearly state the acreage of their proposed Development Phase area. Bids must include Unit 1. Bids on Units 2 through 5 are optional.

· Desired System Size: The solar system must be comprised of an array of PV panels and associated electrical infrastructure sized to maximize the potential of the site within practical limitations.

· Description of Desired Solar System: The solar system shall be configured as ground mount arrays with buried powerlines up to the high voltage (HV) switchyard per DNR policy. Energy storage integration will be allowed, note integrating energy storage at a future date will not change the lease duration in the lease agreements. Preference will be given to projects that incorporate development design strategies that align with DNR’s mission of “conservation, protection, management, use and enjoyment of the state's natural and cultural resources”.

· Project Financing: The Contractor shall be responsible for all financing for the solar development project including documentation of proposed agreement(s) with offtake entity (e.g., utility, MISO, etc.). The DNR will continue to pay statutorily required payments in lieu of taxes for the property. Lessee/Permittee will be responsible for payment of local personal property taxes.

· System Ownership Information: The Contractor will have exclusive rights for use of the leased area, and exclusive ownership of the PV power plant as set forth in a use permit and lease of the project area from the State of Michigan.

· Operation & Maintenance: The Contractor will be responsible for all operation and maintenance services for the duration of the lease, and all necessary site restoration upon termination of the agreement. Contractor shall maintain a clean and safe site.

7 Mile Pit The project site is located in T25N, R03W, Sections 9 and 16 of Crawford County.

· Description of Site: Portions of the 169 acre site was formerly a gravel pit and is highly disturbed. It is mostly open land and generally slopes to the south. There are no known environmental contamination issues on the site. The site is public land, but the entrance to the pit is gated to prevent vehicular access.

· Potential Solar Energy Sites 7 Mile Pit show the proposed extent of the 169 acre project area, elevation contours, and proximity to identified major electric power transmission lines. Project boundaries are conceptual and specified by the extent of the former gravel pit, section lines and forested stand boundaries. Bidders must provide a GIS shape file and clearly state the acreage of their proposed Development Phase area.

· Desired System Size: The solar system must be comprised of an array of PV panels and associated electrical infrastructure sized to maximize the potential of the site within practical limitations.

· Description of Desired Solar System: The solar system shall be configured as ground mount arrays with buried powerlines up to the HV switchyard per DNR policy. Energy storage integration will be allowed, note integrating energy storage at a future date will not change the lease duration in the lease agreements. Preference will be given to projects that incorporate development design strategies that align with DNR’s mission of “conservation, protection, management, use and enjoyment of the state's natural and cultural resources”.

· Project Financing: The Contractor shall be responsible for all financing for the solar development project. including documentation of proposed agreement(s) with offtake entity (e.g., utility, MISO, etc.). The DNR will continue to pay statutorily required payments in lieu of taxes for the property. Contractor will be responsible for payment of local personal property taxes.

· System Ownership Information: The Contractor will have exclusive rights for use of the leased area, and exclusive ownership of the solar array system, as set forth in an operational permit and lease of the project area from the State of Michigan.

· Operation & Maintenance: The Contractor will be responsible for all operation and maintenance services for the duration of the lease, and all necessary site restoration at the termination of the agreement. Contractor shall maintain a clean and safe site.

1.2 Project Requirements

1.2.1 Overview

A bidder must be an established public or private utility or other company capable of developing, designing, building and/or operating solar PV systems at the locations specified in Section 1.1. A bidder may be a consortium of separate entities formally working together to provide a unified bid. The successful bidder will have demonstrated experience developing, financing, designing, planning, scheduling, permitting and constructing, interconnection and operating a utility-scale solar PV system. The Contractor will be responsible for all permitting. Bidders must have experience at the scale of the bid project and provide examples of how their development achieved operating power plants. A bidder may submit proposals for either one or both project sites. Bidders must provide a project financial analysis demonstrating a profitable model in their proposals.

The State of Michigan reserves the right to accept multiple or none of submitted proposals.

1.2.2 System Design and Construction Requirements

Contractor must consider the following guidelines and construction requirements when designing the solar system.

Only projects that utilize PV modules to generate electricity are eligible under this RFP. Energy storage may be included with PV systems.

Industry standard setbacks from buildings and roads will apply, but it is up to the bidder to develop a site design that meets reasonable standards and complies with local zoning requirements. The DNR shall be included in all communications with local jurisdiction and community groups in the process of obtaining approval from local jurisdictions and/or community members.

Conceptual locations for projects are identified in the maps and are subject to negotiation. Proposals for projects at other locations on state forest land will not be considered at this time. The DNR does not guarantee that the entirety of the identified locations or area within the identified locations are suitable for utility-scale solar energy projects.

Only ground mounted solar systems will be permitted. The bidder must develop a design for the proposed photovoltaic system(s) using new components. It is the responsibility of the bidder to assess site topography and geotechnical attributes to estimate costs related to project installation. The selected Contractor is responsible for securing the environmental permits necessary to install a ground-mounted system and all costs and work related to such permits.

· Mounting system must be either directly anchored into the ground (driven piers, concrete footers, ground screws, etc.) or ballasted on the surface without ground penetration. Mounting system design must meet applicable local building code requirements with respect to snow loads, wind loads, and frost heave factors. The design calculations must be provided in as-built drawings to verify these loads are met.

· Mounting system can either be fixed tilt or tracking systems. Bidders must specify which type (fixed or tracking) in their project proposal.

· Ground surface and applicable vegetation management must be included in the proposal. If appropriate for the site conditions, pollinator and native vegetation is preferred.

· The DNR’s policy requires underground wires when applicable, such as MV cabling from solar field to the site substation.

· Contractor will have exclusive use rights to the property for the duration of the lease, excepting existing public access roads which shall remain open for public use. Easements should be uncovered during the diligence period, such as those for utilities transmission lines.

· Fencing (6 ft. height chain link) shall be installed around the project area to exclude other uses.

· Contractor must include a quote in each proposal for the cost of decommissioning, removal and disposal of the system at the end of the service life and lease.

Additional Construction Requirements

· Contractor may make an independent environmental assessment of the Development Area. If an assessment is made, a copy of the environmental assessment shall be provided to the Lessor’s representative upon or by lease inception. Contractor stipulates, represents, and warrants that Contractor has examined the premises, and that they are at the time of this lease in good order, repair, and in a safe, clean, and tenantable condition. Contractor represents that it is taking possession of the premises in their “as is” condition.

· Soil borings are not provided and a DNR land use permit is required for soil boring. The DNR anticipates this request during the Development phase. If a potential bidder wants to request access to the site prior to the RFP closing, direct the request to: Matt Fry at frym1@michigan.gov. The bidder’s proposal shall include a description of all associated work, such as a geotechnical evaluation and/or topographical survey.

· All PV modules, inverters, electrical components, and transmission equipment must be listed or recognized by an appropriate safety laboratory [e.g. Underwriters Laboratories (UL)]. The electrical design and installation for the PV system shall conform to the National Electric Code (NEC) and IEEE (NESC) standards for power system safety. All electrical components, including over current protection, disconnects, surge suppression devices, conduit, wiring and terminals must have a UL or equivalent listing and have appropriate voltage, current and temperature ratings for this application.

· In areas with notable climate conditions, such as high snow load, the bidder should explain how they plan to mitigate performance risk and structural risk.

A selected Contractor is required to provide information at future, appropriate stages of development. For example, updated documentation is required for Use Permit, Surface Use Lease, applicable Utility Easement Lease.

· Project design plans, specifications and engineering calculations, (including a storm water management and erosion control management plan), that are signed and sealed by a professional engineer licensed in the State of Michigan.

· Survey and shape files of the extent of lands to be leased, to be accomplished by a land surveyor registered in the State of Michigan.

Additionally, the selected Contractor agrees to general, industry standard safety and performance expectations, which will also be included within the Surface Use Lease:

· Design and construction supervision. Must have a full-time site superintendent during site construction.

· Quality control plan (QCP) including inspections and testing (QCP should, at a minimum, conform to “IEC 62446 Grid Connected Photovoltaic Systems – Minimum Requirements for System Documentation, Commissioning Tests, and Inspections”.

· Documentation of project completion and commissioning.

· System Electrical Calculations, system energy production calculation showing estimated monthly and yearly energy output for each array.

Bidder shall check the box below, confirming agreement to Section 1.2.2 System Design and Construction Requirements

I have reviewed the above requirements and agree.

1.2.3 Proposal Requirements

A proposal may include one or both locations, however each location must have a clear set of responses for all unique aspects. For each proposal, Contractor must describe their technical approach to the design and construction of the solar project at one or both of the identified project areas including:

· A description of the renewable energy system proposed including projections of module, inverters, and racking specifications. Include description of how the grid interconnection requirements will be met.

· Conceptual layout drawing of the installation site, overlain upon aerial imagery, showing the location of all equipment.

· Technical approach, design, equipment details and specifications, and installation. Include all work necessary to begin operation of the renewable energy system, including any costs of land clearing, site preparation, and stabilization of the site after installation is complete. The State of Michigan’s preference is for low maintenance ground treatment.

· A report indicating the amount of power production of the proposed system.

· Describe how the bidder establishes methods to ensure all necessary installations are performed in a timely, quality, and efficient manner.

· A description of the controls, monitors, and instrumentation to be used for the system.

· A description of the major components design life and useful life of: solar panels, inverters, rack, and other critical components that are typically warranted.

· A description of any potential additional benefits to the project site or region (e.g. native species restoration, etc.).

Section 1.2.3 Proposal Requirements

Bidder shall provide documents describing how they will meet all Section 1.2.3 Proposal Requirements, including a conceptual layout drawing as a separate attachment.

1.2.4 Land Leases and Easement.

No operations shall be conducted by the Lessee/Permittee on any of the following described land situated in the State of Michigan without obtaining all separate written permissions required by the Lessor or any other State or Federal Government Agencies. A sample copy of a draft Project Development Lease, State Surface Use Lease, and typical Utility Easement are included in Schedules C, D and E.

Bidder Response: (Bidder must confirm agreement with Land Lease requirements as specified in Schedules C, D, and E:

1.3. Quality Control Program

Explain your Quality Control Program(s) for construction and technology selection.

Bidder Response to Section 1.3 Quality Control Program

1.4 Bonds and Insurance

Both the Performance Bond and Payment Bond must remain in effect from the date of Lease and Permit award until final completion of the lease agreement. The surety bonds required for a lease will not be accepted by SFA unless the surety bonding company is listed in the current United States Government, Department of Treasury’s, Listing of approved sureties (bonding/insurance companies), Department Circular 570. Copies of the current Circular listing may be obtained through the internet website https://www.fiscal.treasury.gov/fsreports/ref/suretyBnd/c570.htm.

Insurers must have an “A-“ A.M. Best Company Rating and a Class VII or better financial size category as shown in the most current A.M. Best Company ratings. Insurance must be provided by insurers authorized by the Department of Insurance and Financial Services (DIFS) to do business as an insurer in Michigan. The insurance company must attach evidence of the authorization. These certificates must specify the Project File No., Funding Code., Project Title, and a description of the Project. The Lessee/Permittee agrees that insurance coverage afforded under the policies as such coverage relate to the State Michigan under this Contract as determined by the Lessee/Permittee will not be modified or canceled without at least thirty calendar days prior written notice to the State of Michigan. The latest A.M. Best’s Key Ratings Guide and the A.M. Best’s Company Reports (which include the A.M. Best’s Ratings) are found at: http://www.ambest.com. The Lessee/Permittee must not perform any part of the work unless the Lessee/Permittee has all the required insurance in full force and effect.

As a guarantee of faithful performance of the conditions of the lease, the successful bidder delivers herewith a cash or surety bond or letter of credit in the sum of $50,000.00. As soon as security for the performance of the terms of this contract or the settlement of claims incident thereto is no longer necessary, deposits in lieu of surety or cash bond will be subject to the conditions set forth in the sentence immediately following, and returned to the Lessee/Permittee. The Lessee/Permittee agrees that all monies deposited under this contract may, upon failure on Lessee/Permittee’s part to fulfill all and singular the requirements herein set forth or made a part hereof, be retained by the State of Michigan to be applied as far as may be to the satisfaction of Lessee/Permittee’s obligations assumed hereunder, without prejudice whatever to any rights and remedies of the State of Michigan.

The following expectations are directly from the Surface Use Lease to encapsulate all insurance requirements:

Lessee/Permittee shall provide to Lessor certificates of insurance listing the State of Michigan, its several departments, boards, agencies, commissions, officers, and employees as additional insured’s, within 30-calendar days following the execution and delivery of this lease to Lessee/Permittee, and every year thereafter, for the following insurance coverage. The insurance policies cannot be modified, canceled, or allowed to expire without 30 days prior written notice given to Lessor.

Lessee/Permittee shall obtain general liability insurance, naming Lessor, its officers and employees as additional insureds and protecting against claims, demands, suits, actions, or causes of action or judgments, settlements, or recoveries, for bodily injury or property damage arising out of a condition of the premises, or arising in connection with or as a direct or indirect result of the Lessee/Permittee's use and occupancy of the premises or its exercise of the right and privileges granted in the lease. Lessee/Permittee agrees to maintain a policy limit, in the amount of $2,000,000.00 per occurrence for property damage, $2,000,000.00 per occurrence for bodily injury, and $4,000,000.00 aggregate.

Lessee/Permittee shall obtain workers compensation insurance, or be an approved self-insurer for Lessee/Permittee employers’ claims under Michigan Workers Compensation Act or similar employee benefit act or any other state act applicable to an employee, along with Employer’s Liability Insurance for claims for damages because of bodily injury, occupational sickness or disease or death of an employee when workers compensation may not be an exclusive remedy, subject to a limit of liability of not less than $100,000 each accident.

Lessee/Permittee shall maintain automobile no-fault coverage as required by law, or be an approved self-insurer.

Lessee/Permittee shall maintain pollution liability insurance covering pollution incidents that result in bodily injury or property damage, subject to a limit of liability of not less than $1,000,000.00.

Bidder shall check the box below, confirming agreement to Section 1.4 Bonds and Insurance

I have reviewed the above requirements and agree.

1.5 Other Requirements and Conditions

· The State of Michigan will not assume any risk that Federal incentives, tax credits, bonus depreciation or similar items are not achieved (i.e., no price adjustments).

· All references to megawatts (MW) refer to MWac and references to kilowatts (KW) refer to KWac if not otherwise stated.

Bidder shall check the box below, confirming agreement to Section 1.5 Other Requirements and Conditions

I have reviewed the above requirements and agree.

2. Service Levels

2.1. Reporting

A Contractor must submit to the DNR Program Managers the following written reports:

· Annual update during both Development Lease period and Surface Use Lease period.

· Status of major milestones.

· Contract Representative information update.

· Site security and other operational issues.

· Energy production in standard industry terminology.

· The DNR will request courtesy updates on the following major milestone completions within 10 days of achievement.

· Any issue that adversely impacts the potential for site development, including the reception of feedback or any determination affecting the location’s condition and competitiveness that could result in a lease termination request.

· Documentation of the completion of solar project construction.

· Post-construction performance testing and inspections

· Documentation of the date of startup and full operational status of the solar project. This report must be submitted within 7 days of completion of startup and full operations.

Bidder Response to Section 2.1 Reporting

2.2. Meetings

A Contractor must attend the mandatory design kick-off meeting in person within 30 calendar days of the effective date of the lease and land use permit.

The State of Michigan may request other meetings as it deems appropriate.

Bidder Response to Section 2.2 Meetings

3. Staffing

3.1. Contract Representative

Contractor must appoint a Contract Representative, specifically assigned to each project area, that will respond to State of Michigan inquiries regarding the lease and permit activities.

Contractor must notify the DNR at least 30 calendar days before removing or assigning a new Contract Representative.

Bidder Response to Section 3.1 Contract Representative

3.2. Key Personnel

Contractor must provide an organization chart and resumes, detailing senior level/firm principal, project manager, development engineers, and other key project personnel.

Bidder Response to Section 3.2 Key Personnel Bidder shall provide organizational chart and resumes of Key Personnel.

3.3. Organizational Chart

Contractor must provide an organizational chart of all staff of all companies involved in the project.

Bidder Response to Section 3.3 Organizational Chart

3.4. Security

The Lessee/Permittee must maintain any additional security measures in place to ensure the security of State property.

Bidder Response to Section 3.4 Security Bidder must explain any measures necessary to ensure the security of the property.

4. Pricing

4.1. Price Term

Bidders must submit price proposals for annual development lease and surface use lease fees for use of project lands under Schedule B Pricing.

Pricing will be based on a two-tiered process. The Bidder shall propose a Development Lease Fee of $[ ]/acre-year based on total acreage for the proposed Development Area. The Bidder shall also propose a Surface Use Lease Fee of $[ ]/acre-year based on total acreage for a to-be-determined surveyed lease area. The DNR acknowledges the Development Lease period is speculative and often accompanied with a discounted lease rate compared to Surface Use Lease period.

Pricing is expected to be firm and fixed price for the entire length of the lease.

Bidder Response to Section 4.1 Price Term

5. Ordering

5.1. Authorizing Document

The appropriate authorizing document for the project will be a signed Development Lease agreement followed by a Surface Use Lease agreement and subject easement if applicable.

6. Payment

6.1. Payment Methods

A Lessee/ Permittee will make lease and permit payments by electronic funds transfer (EFT).

Bidder Response to Section 6.1 Payment Methods

7. Preliminary Project Plan Bidders must include a preliminary proposal for how the bidder will execute a successful project. Included in the proposal is the preliminary financial analysis showing a successful project, the bidder’s role, and a preliminary project schedule. The preliminary project schedule proposing major milestones from development to operations, including at a minimum tentative dates for:

· Generator Interconnection Application date and target agreement date.

· Offtake/Power Purchase Agreement target date.

· Discretionary Permitting completed.

· Initiation and completion dates for preliminary on-site construction, including any land clearing (all NTPs).

· Completed survey and system design.

· Surface Use Lease execution.

· Construction Commencement (FNTP).

· Operational events: Startup, Permission to Operate, Commercial Operations Date, etc.

· Any ownership changes

Bidder Response to Section 7. Preliminary Project Plan, including the submission of a detailed project timeline

8. Licensing Agreement The Contractor must provide a copy of any applicable licensing agreement.

Bidder Response to Section 8. Licensing Agreement

9. Liquidated Damages Late or improper completion of the Contract Activities will cause loss and damage to the State of Michigan and it would be impracticable and extremely difficult to fix the actual damage sustained by the State of Michigan. Therefore, if there is late or improper completion of the Contract Activities the State of Michigan is entitled to collect liquidated damages for each day Contractor fails to remedy the late or improper completion of the Work.

Specific amounts for damages can be located in the leases, Schedule C and D.

Bidder shall check the box below, confirming agreement to Section 9. Liquidated Damages

I have reviewed the above requirements and agree.

101. Additional Requirements

10.1. Environmental and Energy Efficient Products

The Contractor must identify any energy efficient, bio-based, or otherwise environmentally friendly products used in the products. Contractor must include any relevant third-party certification, including the verification of a United States Department of Agriculture certified bio-based product label.

Bidder Response to Section 10.1 Environmental and Energy Efficient Products

10.2. Hazardous Chemical Identification

In accordance with the federal Emergency Planning and Community Right-to-Know Act, 42 USC 11001, et seq., as amended, the Contractor must provide a Material Safety Data Sheet listing any hazardous chemicals, as defined in 40 CFR §370.2, to be delivered. Each hazardous chemical must be properly identified, including any applicable identification number, such as a National Stock Number or Special Item Number.

The Contractor must identify any hazardous chemicals that will be provided under any resulting contract.

Bidder Response to Section 1.2 Hazardous Chemical Identification

10.3. Mercury Content

Pursuant to MCL 18.1261d, mercury-free products must be procured when possible. The Contractor must explain if it intends to provide products containing mercury, the amount or concentration of mercury, and whether cost competitive alternatives exist. If a cost competitive alternative does exist, the Contractor must provide justification as to why the particular product is essential. All products containing mercury must be labeled as containing mercury.

Bidder Response to Section 10.3 Mercury Content

10.4. Brominated Flame Retardants

The State of Michigan prefers to purchase products that do not contain brominated flame retardants (BFRs) whenever possible. The Contractor must disclose whether the products contain BFRs.

Bidder Response to Section 10.4 Bromated Flame Retardants

Version 2 Revised Date: 2/2019