Amd 0002 RFI Group 2.pdf

PJM CFE 2024 Amendment 0002 RFP SP0604-24-R-0421 Page 1 of 4

Request for Information – Group 2

1. In a scenario where a curtailment is called on the upstream asset or a force majeure event occurs at the asset, does the DLA expect the shortfall provision to still be valid?

a. No. The Government understands in this scenario where curtailment is called on the upstream of an asset by a 3rd party or force majeure event occurs, and out of the Retail Suppliers control, for a period of time directly attributable to the event the shortfall provision will not apply.

2. We have supply agreements in place with the DLA that expire in December 2024. There are enrollment and drop deadlines for these accounts, as we can’t serve these accounts after the expiration date at the current contracted rate. If this bid is awarded after the drop/enrollment deadline, will a short-term extension be requested in the meantime?

a. Requirements of this solicitation can be found in Section B and C of the solicitation.

3. Based on SPE60422R0406 - PJM 2022 (Page 8 of 49), does the DLA could utilize the following clause to extend a current agreement in place, to ensure the smooth transition between the contracts. At any time during contract performance, the Government and the Contractor can mutually agree to convert any locational marginal price-based contract line items quantity to a firm fixed price for a specific delivery month(s) or for the remainder of the delivery period, based on the historical usage identified in the Installation Data Sheets. B806 CONTRACT

PRICE CONVERSION (ELECTRICITY) (DLA ENERGY JAN 2012)

a. The referenced language (B806) will not be included in this solicitation. Questions regarding the current agreement in place may be directed to the applicable Contracting Officer.

4. In order to perform under any awarded Solicitation, Contractor anticipates entering into one or more Power Purchase Agreements (PPAs) with carbon-free project developers. Will Force Majeure events under such PPAs which impact the commercial operation date of the project or other CFE performance be considered as Force Majeure events under the awarded Solicitation when such event prevents Contractor’s performance? Will such events be considered when determining compliance with the 35% CFE Requirement?

a. The Government understands in this scenario where a force majeure event impacts the Commercial Operation Date, and out of the Retail Suppliers control, for a period of time directly attributable to the event the shortfall provision will not apply.

5. With respect to Availability of Funds, Contractor understands the Government’s obligations under this agreement are subject to appropriations. Can you confirm that if the contract is terminated as a result of Government’s inability to obtain funding approval, Contractor will have a contractual remedy for damages? Can DLA confirm this contractual remedy will be available and provide language to that effect.

a. Reference FAR 52.232-18 Availability of Funds.

6. With regards to FAR 52.204-21, DFARS 252.204-7008, DFARS 252-204-7012, DFARS 252.204-7019 and DFARS 252.204-7020, it is assumed that controlled unclassified information (CUI), and covered defense information (CDI) does not include information that is publicly available. To ensure the information is protected in accordance with the requirements, please identify any and all CUI and CDI that will be included within this contract and will be marked as such.

a. All CUI and CDI will be marked as appropriate.

7. How will the long-term contracts entered under this solicitation be handled should a future administration reverse EO 14057?

a. An awarded contract will continue.

8. Is the PPA agreement, the contract agreement, with that individual installation or with DLA?

a. The contract agreement is with DLA Energy as the contracting agent in support of the installations referenced in Section B, Table 1 Supplies to be Furnished.

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9. DLA indicated the term would be a 20-year "shell" with four, 5-year terms included. Should the LSE procure a

20-year PPA that starts in year 3 or 4 of the contract, would the DLA be willing to extend another term to be conterminous with the underlying PPA? Alternatively, would the DLA be willing to shorten the tail of the contract to be conterminous with, for example, a 15-year term that ends in Year 18 or 19 of the "shell"?

a. No, the contract term is for 20 years.

10. Please confirm that the DLA understands that an agreement, including an agreed upon standard of measurement, would be required between the DLA and the awarded supplier regarding the technical capability and market construct to support 24/7 CFE. This would be required in order for the hourly matching requirement to be met.

a. Please provide more information on the "standard of measurement".

11. As indicated in the Information Session call, the DLA is interested in offsetting on-peak hours in order to not purchase CFE in hours it does not consume. Would the DLA be open to a different approach in ranking the type of asset submitted?

a. Please provide the approach in the Technical Proposal.

12. Shortfall: Does this shortfall, whereby the LSE needs to provide 35% REC coverage by purchasing offsetting EACs, only kick in starting 1/1/2030? For example, if the upstream development was to COD in January 2028 and is delayed by six months, as written, it seems to indicate that the DLA can terminate; however, this is a very real possibility and is beyond the control of the LSE.

a. No, coverage begins at COD. If there is a justifiable reason, the Government will evaluate the scenario.

13. What sort of standards to the offsetting EACs have to qualify for?

a. EACs shall meet the standards of Executive Order 14057.

14. If the LSE needs to procure “make up” EACs (RECs) is the intent for these RECs to be the same vintage year?

Month? Hour?

a. EACs shall meet the standards of Executive Order 14057.

15. Please confirm the amount of CFE the DLA is looking to procure based on the following: On the Information

Session Deck, slide 4 indicates the GSA goals of 100% by 2030 (with 50% being hourly matching). Slide 7 indicates a goal of 35% by 2030 – our assumption is that DLA is overriding the goals on Slide 4.

a. To meet the 100% CFE goal of 2030, we are only requiring ~35% as we anticipate the other 65% will be other contributions from Grid Supplied CFE.

16. Please confirm that the CFE must be bundled with EACs and the price proposal for CFE should be inclusive of EACs.

a. Confirmed.

17. Is the 35% CFE target measured on an annual usage basis, or does it need to be matched to specific hours / days / month?

a. Hourly.

18. When is compliance with the 35% CFE Requirement determined? Please verify the analysis is performed at the end of the end of the calendar year, which is identified as the “CFE Compliance Year” in the Solicitation.

a. The CFE compliance requirement is at the end of the calendar year.

19. The definition of CFE does not speak to storage assets. Given the profile of the sites, storage could be a critical asset type to fulfill the CFE demand. Please confirm storage is a technology that is allowed for CFE.

a. Battery Energy Storage Systems are not defined CFE resources. However, they may be offered as part of a generating facility.

20. Section B.1 of the RFP indicates that Retail Electricity component will be purchased in 5- year increments. We assume this means that the initial award will be a 20-year contract for New-Build CFE with a provision covering the 1st 5-years for Retail Electricity. Will the three successive 5-year increments for Retail Electricity be included as firm future commitments, or will they be included as option quantities that they Government may or

PJM CFE 2024 Amendment 0002 RFP SP0604-24-R-0421 Page 1 of 4 may not exercise? If they will be included as option quantities (or some other form of option), under what circumstances does the Government believe it might not exercise an option?

a. The Government is not contemplating option years. The Government intends to award follow-on sole source contracts to the Retail Supplier contracted for the CFE for the 20 -year delivery term.

21. The CFE project developer will be a wholesale counterparty to the Contractor or Contractor’s affiliate through a PPA. Please verify such wholesale counterparty and Contractor’s affiliate would not be considered a subcontractor for any purposes under an awarded Solicitation.

a. Confirmed. The wholesale counterparty and affiliate will not be considered a subcontractor. The Government intends to contract with the Load Serving Entity.

22. Please confirm the CFE attributes are to be provided by the retail supplier entering into a PPA with a developer.

a. Confirmed.

23. The Solicitation notes that delivery orders may be issued starting in December. What if they are not? It does not seem clear that a Contractor, upon BAFO, is sure how much it will serve and for what duration.

a. DLA Energy's customers will return to their serving utility on a month-to-month basis until a solution to provide electricity is provided. The December 2024 dates were removed, reference Amendment 0002.

The delivery period will remain for 20 years.

24. With respect to termination for convenience:(a) Does this provision apply to this Solicitation? (b)Given, as noted above, Contractor would contract with developers in order to source the CFE, what happens in the case of termination for convenience given the stranded asset that was contracted?

a. Yes.

b. Reference Amendment 0002.

25. Would you consider rearranging any of the groups of accounts for regulatory services?

a. The CLIN structure was formulated by state, utility, and location. Suggestions are maybe submitted to the DLAEnergy-CFE@dla.mil.

26. Does DLA Energy anticipate extending the timeline since it is a very tight turnaround, especially for the new build, to incorporate CFE. We can put it in writing, but we do feel that the timeline that DLA proposed is quite aggressive and ambitious. To have all of that done within 3 weeks, it’s going to be very challenging.

a. Refer to Amendment 0001.

27. The Government has outlined that you want the CFE in a certain way and you want the LMP pricing in a certain way. If the marketplace is not ready to have those assets to build within the certain timeframe that you are anticipating, are you open to alterative product structure proposals?

a. Yes, the Government is requesting innovative solutions that meet the requirements. Reference Section L.5(A), Factor I - Technical Capability Risk.

28. If we as a supplier are not licensed in a certain utility zone, can we list that as an exception or are do you think it will basically prohibit us from submitting and pricing for a certain pricing group because those are set in stone for DLA?

a. All exception to the solicitation can be submitted in accordance with Section L.4(K) Exception to Terms and Conditions.

29. Regarding Termination (Forward Price): Does “ATC energy price” refer to load weighted energy? Can it include recovery of any fixed components for the remainder of the contract?

a. Please provide more information for this question.

30. Regarding the requirement for a letter of credit: If a letter of credit is provided, does the DLA intend for this to be a pass-through charge or included in the supplier fee?

a. This shall be included in the Transaction Fee.

mailto:DLAEnergy-CFE@dla.mil

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31. As these EACs (RECs) become more specific, the supply around these EACs (RECs) becomes less and less available – therefore, there is a scenario where - say the DLA wants RECs for hour ending 12 - these RECs trade at multiples over the initial contract price. Therefore, in this type of scenario, is the DLA willing to absorb these significant above contract pricing as a pass-through charge?

a. No, DLA is not willing to absorb the variance in EACS pricing as a passthrough charge. The EACs are inclusive at the contract price for CFE.

32. Regarding FAR 52.232-18 (Availability of Funds): If no funds are available, what protection for the supplier would be in place in the event of termination if funds do not become available?

a. Reference FAR 52.2332-18 Availability of Funds.

33. For the New Jersey installations, please confirm if NJ Sales and Use Tax is to be included in price.

a. The Government is exempt from the NJ Sales and se Tax and will provide the tax exempt form at contract award.

34. Regarding Payment Request Submissions: Does the DLA plan to require suppliers to utilize WAWF for payment requests and receiving reports for this deal? If so, will it be applicable to all accounts, or will each department be able to select that as an option? Additionally, how will suppliers submit any reporting related to the subaccount or billing?

a. Please refer to Attachment IX for Invoice and Payment Instructions.

35. In terms of the way the settlement would work, would be essentially, whatever amount of MWh that show up at a given hour, would be priced at this price and everything else is purchased at the real-time LMP?

a. Correct.

36. With regard to the pricing sheet, I’m looking at it, is the expectation on there where it says the generating rate, commodity only, is that potentially a PPA rate you are looking for?

a. Yes, inclusive of EACs.

37. Does the Government anticipate extending the timeline since it is a very tight turnaround, especially for the new-build, to incorporate CFE? We can definitely put it in writing, but we do feel that the timeline that DLA proposed is quite aggressive and ambitious. To have all of that done within 3 weeks, it’s going to be very challenging.

a. Please refer to Amendment 0001 for updated "Offer Due Date" of November 4, 2024.

38. What is the energy delivery start date for each CLIN? Is it Dec 2024 for all?

a. Energy delivery is expected after contract award is effectuated and the applicable accounts can be enrolled with each supplier. Reference Amendment 0002.

39. Will the Government be requesting an upfront EAC cost, separate from the CFE and inclusive EAC cost, for the separate provision of EACs that might be necessary if CFE Production doesn’t meet the 35% requirement as indicated in the second paragraph of Section C.2.a. If not, please confirm how this price for separate EACs will be determined.

a. No, the CFE price will include EAC costs.

40. Is there any CFE obligation prior to January 1, 2030?

a. Yes. The Government will consume energy from CFE resources as they come online.

41. Will the Government accept CFE for any volume at any hour prior to January 1, 2030 if a facility’s COD is before that date?

a. The target CFE need is 35% by January 1, 2030. The Government will accept CFE volume prior to that date.