Sole Source Justification -Posted.docx

Sole Source Contract Justification Questionnaire For

NO. SS 2420 CPR

Project Title: Subscription Services for Electricity Transmission Data Sole Source Company Information

What is the contract purpose?

The purpose of this contract is for subscription services to provide annual data on electricity transmitted into and out of the state of Washington to allow Ecology to verify which electric power entities have imported and exported electricity.

Funding Source (the amount of contract)

Proposed Contract Dates

Will time extensions be needed? Yes, two additional two-year periods or portions therein.

What business need or problem requires this contract?

Ecology requires data on electricity transmitted into and out of the state of Washington to facilitate the tracking of its progress towards achieving the greenhouse gas emissions state cap under the Cap-and-Invest program, and for the accurate provision of no cost allowances to electric utilities.

The OATI work on this project will be limited to power transactions within the boundaries of the state of Washington. This electricity transaction data serves to ensure that all electricity importers into, and electricity exporters out of, the state of Washington have been accounted. Without a mechanism for independent verification, an importer of electricity that does not participate in the Cap-and-Trade program will not be detected by the Department of Ecology. Contracting with OATI still requires that the Department of Ecology must gain approval from electric power entities to use their data, and work with OATI to summarize and provide that electricity transaction data in a format that can be used by the Department of Ecology in fulfilling its compliance role.

Describe the proposed contractor’s unique features, qualifications, abilities, or expertise for this sole source contract.

The electricity transaction data provided by Open Access Technology International, Inc. (OATI) will allow the Department of Ecology to verify which entities that imported or exported electricity have, or have not, reported that electricity transaction data through the Department of Ecology reporting process. Without this mechanism for independent verification, a new importer of electricity that does not already report to the Department of Ecology will not be identified and will incur a significant cost advantage in the wholesale electricity markets. In the absence of these control totals check, electric power entities (EPEs) could avoid obligations by simply not reporting.

OATI manages the national webSmartTag database under contract by the U.S. Federal government for the purpose of collecting electricity transaction data. OATI is the only centralized and readily accessible source of electricity transaction data. There is no other collector of this information.

OATI is the only data collector of this information in the Western United States Power Grid, which encompasses the area from which Washington draws power, and the area into which Washington transmits power. The Department of Ecology has no discretion in this matter.

What kind of market research did the agency conduct to conclude that alternative sources were inappropriate or unavailable?

The Department of Ecology exhausted all possible avenues of market research to guarantee that there are no other alternative sources of this proprietary data than Open Access Technology, Inc. (OATI). Ecology learned that entities transacting power on the western power grid pay OATI and exclusively OATI to track electricity transmitted from source to sink in the western United States. No other companies have access or permission to gather this data. Through this investigative process, the Department of Ecology learned that OATI manages the national webSmartTag database under contract by the U.S. Federal government for this purpose, which is the only centralized and readily accessible source of electricity transaction data. To corroborate, Ecology reached out to our sister state agency in California, the Air Resources Board (or CARB), who also requires similar data for the state of California cap-and-trade program emissions reporting compliance. CARB confirmed there is no additional source for this information, and Ecology learned that because OATI is the sole proprietor of this data, CARB has a sole source contract with OATI as well.

What considerations were given to providing opportunities in this contract for small business, including but not limited to unbundling the goods and/or services acquired.

There is no possibility to provide opportunities for smaller businesses. This is a specialized business function that only Open Access Technology International, Inc. (OATI) provides.

Provide a detailed and compelling description that includes quantification of the costs and risks mitigated by contracting with this contractor (i.e., learning curve, follow-up nature) There is no alternative to contracting with OATI for this data. The Department of Ecology could not create this data by training staff or training a new contractor, as Ecology or the new contractor will not have access to the electricity transaction data without (1) gaining permission from the electric power entities who own the data, as OATI is the data collector, but not the data owner, and (2) paying OATI to provide that electricity transaction data in the format of our choosing. This is exactly what this contract with OATI accomplishes.

As stated above, OATI is the only entity that collects and tracks this electricity transaction data on behalf of and under contract with electric power entities (EPEs) in the electricity industry. Contracting with OATI is the most cost-effective method for individual entities to track this data. If we required this information directly from each EPE, that EPE would first need to enter into a contract with OATI to gather that electricity transaction data in a format that meets the requirements of Department of Ecology. Each EPE would then need to enter into a separate contract with the Department of Ecology to provide that information to the Department of Ecology in a format that can be used to fill Ecology’s compliance role.

Is the agency proposing this sole source contract because of special circumstances such as confidential investigations, copyright restrictions, etc.?

No.

Is the agency proposing this sole source contract because of unavoidable, critical time delays or issues that prevented the agency from completing this acquisition using a competitive process?

No.

Is the agency proposing this sole source contract because of a geographic limitation?

No What are the consequences of not having this sole source filing approved?

The Department of Ecology will be unable to provide assurance that electric power entities are reporting all power brought into or sent out of Washington. In turn, the Department of Ecology will be unable to guarantee that Washington is meeting the greenhouse gas reporting requirements set in statute, in RCW 70A.15.2200, and whether the State is meeting the intent of the Climate Commitment Act as it pertains to electricity regulation in the Cap-and-Invest program.

Since competition was not used as the means for procurement, how did the agency conclude that the costs, fees, or rates negotiated are fair and reasonable?

Per the Department of Ecology’s investigative process with our sister state agency in California, the Air Resources Board, these costs are consistent with the costs outlined in California’s sole source contract with Open Access Technology, Inc. (OATI). In addition, the costs are reasonable for data query and production with data stewardship.

Does the contract/purchase involve IT?

No

Rev. 11/29/2022