RFI Group 1.pdf

Industry Day Event Questions Solicitation SP060426R0409

Amendment 0004

NOTE: All references to Task Order (TO) have been corrected to Delivery Order (DO).

1. The section marked content for submission regarding the price specifies” price for the delivery of coal based electricity to the Pentagon, Arlington, VA”.

a. Will an account list or load information be disclosed to be able to understand the volume, usage profiles, rate classes of the accounts being priced for the Pentagon, Arlington, VA?

ANSWER: Account information will not be provided as the reference to the Pentagon, Arlington, VA was removed from the solicitation under Amendment 0004.

b. Is the scope of the response to provide a framework for other facilities in the Dept. of War’s portfolio of installations inclusive of regulated and deregulated power markets in the USA as indicated by “Customers” defined in Section B , sub 1 Supplies to be Furnished (d) Customers?

ANSWER: The scope of the IDIQ contract is to provide a framework for military installations in the Department of War’s portfolio inclusive of regulated and deregulated power markets.

c. What period of time is being contracted for? The solicitation does not have a contract flow start, but mentions a 10-year period in 5-year increments.

ANSWER: The period of time being contracted for will be articulated in each Delivery Order-Power Purchase Agreement (DO-PPA). A DO-PPA award will be for a period of up to 10 years. DLA Energy is currently solicitating for Indefinite Delivery/Indefinite Quantity (IDIQ) contract holders. The IDIQ contracts will be valid for a period of 5 years. Only IDIQ contract holders will be able to offer on any future DO-Request for Proposal (DO-RFP) solicitations, which may result in a DO-PPA.

2. The phone numbers in cell 8 appear to have reverted back to the original in Amendment

2. Can you confirm the phone numbers from Amendment 1 are correct?

ANSWER: The phone numbers from Amendment 0001 are the correct phone numbers.

RFI Group 1

SP0604-26-R-0409

3. When will an account list of the remainder of the sites indicated as “Customers” be provided?

ANSWER: Requirements will be issued under any DO-RFP solicitation and will contain the military installation and accounts being solicited.

4. We would find it helpful to review a sample IDIQ contract or template. Can a sample be provided?

ANSWER: The solicitation becomes the IDIQ contract at award, minus Sections L and M.

5. Will a unit-contingent volume agreement, such as a slice of system percentage, be an appropriate structure?

ANSWER: As requirements are issued under a DO-RFP, IDIQ holders are required to meet the full anticipated requirement. Given market frameworks, a singular slice of a system percentage that does not meet the anticipated military installation requirement will not be considered. However, it can be combined with other coal-fired generation resources so long as the full military installation requirement is met.

6. When must a new coal plant come online to be eligible?

ANSWER: As amended under Amendment 0002, the solicitation no longer requires construction of new coal plants. Existing coal plants are eligible.

7. Are we to essentially "pledge" capacity to be called on later?

ANSWER: If a DO-PPA is awarded to an IDIQ holder, the military installation requirements identified within the award shall be satisfied.

8. Will the delivery obligations be firm or unit contingent? Is there a firm obligation to take or pay for MW contracted?

ANSWER: Delivery obligations will be detailed in the issued DO-RFP once requirements have been identified.

9. Can the PPA be take or pay?

ANSWER: Delivery obligations will be detailed in the issued DO-RFP once requirements have been identified.

Amendment 0004

10. A termination of PPAs for convenience creates major uncertainty. Could a future administration use "convenience" as a reason to cancel coal PPAs because that admin opposes the use of coal? What are the expected terms to exercise this right? What would be the basis for associated termination payments? Market to market? Defined termination and who would be the calculation agent for termination purposes?

ANSWER: The Government always reserves the right to terminate for convenience in accordance with Federal Acquisition Regulations (FAR) Part 49, https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-49. Termination language will be provided at the DO-RFP level. For examples of DLA Energy’s termination for convenience language, you can review Clause 52.212-4(l) under the following electricity solicitations on SAM.Gov: PJM SPE60425R0405, ERCOT SPE60426R0401 and New York SPE60425R0404.

Please Note: an offeror can always submit exceptions to contract language with their DO-RFP proposal, that will be reviewed and negotiated during negotiations.

Remember while DLA Energy Electricity solicitations include Fed Civ agencies, any resulting DO-RFP will only be applicable to DoW locations.

11. Clarify allowable pass-thru vs. firm fixed price expectations.

ANSWER: All pricing expectations will be provided at the DO-PPA level.

12. CMMC requirements - Will CMMC requirements be a part of the IDIQ or task order requirements?

ANSWER: While CMMC clauses have to be included in the solicitation, we do recognize that your systems are NOT touching the installation system. Each DO- RFP will contain specific requirements relating to the Contractor’s performance for processing, storing or transmitting Controlled Unclassified Information (CUI).

13. Will the Gov't be supporting regulatory changes to extend coal generation required to be closed by federal or state requirements.

ANSWER: DLA Energy is an acquisition office and does not advocate for regulatory changes. We would be happy to understand the specific regulatory changes you recommend and can provide them to the appropriate party. We also advise you to reach out to your Congressmen and Senators to advocate for change.

https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-49

14. What assurances can DLA/USG offer industry that contracts will have longevity and not face abrupt cancellation should policy changes?

ANSWER: The Government cannot provide assurances that the DO-PPA will not face abrupt cancellation should policy change. DLA Energy contracts include a Termination for Convenience Clause.

15. How does DLA expect western interconnection generators to submit an evaluation? -virtual PPA, western delivery point? etc.

ANSWER: The reference to the Pentagon was removed under Amendment 0004.

Nothing should prevent western interconnection generators from submitting a proposal under this IDIQ solicitation. It should be noted though that coal-fired generation plants must be located within the same region that the DO-RFP requirements are located in. We are not pursuing virtual PPA’s.

16. Delivery be specific to a specific installation, or regional hub?

ANSWER: Specific delivery information will be provided at the DO-RFP issuance. However, given we are purchasing retail electricity, deliveries must be made to a specific installation.

17. Energy profile decided by installation, or seeking a set number of MW's?

ANSWER: Energy profile will be decided by the installation in the DO-RFP solicitation.

18. Can an existing coal PPA to an installation be transitioned into a task order under this

IDIQ?

ANSWER: No; however, once the existing PPA expires, the installation will have the opportunity to use the IDIQ.

19. What pricing structures will be acceptable? Firm/fixed, take-or-pay, indexed, etc.

ANSWER: Pricing structures will be detailed under the DO-RFP.

20. If using an intermediary to sell/deliver power, can generator still be prime contractor, w/ intermediary as a subcontractor?

ANSWER: Yes, as long as there is an agreement that establishes the relationship, for example a teaming arrangement. Please see Section L.3 of the solicitation.

21. Can you describe the ideal product structure?

ANSWER: The solicitation is not for the coal product itself. The solicitation is for retail coal-fired generated electricity.

22. What Ancillaries are to be provided by the coal plants?

ANSWER: Ancillary services for retail electricity will be detailed under the DO- RFP solicitation(s).

23. So, the installations will need to opt-in to IDIQs?

ANSWER: The IDIQ contract vehicle will be available to all installations interested in coal-fired electric generation. Installations will need to provide any requirements to DLA Energy.

24. Are we still to identify installations in the response?

ANSWER: No, please see Amendment 0004, the reference to the Pentagon has been removed.

25. Does a coal facility need to maintain a commitment from same retailer for entire 10 years?

ANSWER: No, a coal facility does not need to maintain a commitment from the same retailer for the entire 10 years. However, a coal facility will need to maintain a commitment from a retailer and shall be required to update DLA Energy if you change retailers, see Section H.2 of the solicitation.

26. Is it accurate to say that the IDIQ will be set first, then the installation can opt in or choose not to opt in in the future?

ANSWER: The IDIQ will be awarded first, and installations can issue DO-RFPs against the IDIQ once their current electricity contracts end.

27. Please explain DO-PPA termination payments. Hedge unwind treatment under termination for convenience.

ANSWER: Termination language will be provided at the DO-RFP level. For examples of DLA Energy’s termination for convenience language, you can review Clause 52.212-4(l) under the following electricity solicitations on SAM.Gov: PJM SPE60425R0405, ERCOT SPE60426R0401 and New York SPE60425R0404.

Please Note: an offeror can always submit exceptions to contract language with their DO-RFP proposal, that will be reviewed and negotiated during negotiations.

Remember while DLA Energy Electricity solicitations include Fed Civ agencies, any resulting DO-RFP will only be applicable to DoW locations.

28. Is this the first of other industry meetings? The issues are complex. Otherwise parties cannot plan to pursue?

ANSWER: This is the first and only industry meeting. It is recommended you submit questions regarding your concerns prior to the deadline articulated within the RFP.

29. What start dates are available for award?

ANSWER: Start dates will be detailed in the DO-RFP solicitation(s).

30. Would existing retail agreements for installations be terminated early if those installations are included in an award here?

ANSWER: Installations will not be included in the award of the IDIQ contract.

Existing retail agreement(s) will not be terminated early, installations would look to use the IDIQ after current electricity contract(s) end.

31. Will the award be executed on federal government documentation or custom solution provider documentation?

ANSWER: An award will be executed on federal government documentation.

32. Will proximity between the coal facilities and served installations be a priority?

ANSWER: While the proximity between the coal facilities and the installations served won’t be a priority, pricing will be an evaluation factor under the DO-RFP.

33. Why is the PPA procurement vehicle necessary for providing coal distributed power to military installations?

ANSWER: The term PPA is being used for the long-term purchase of electricity.

34. To my knowledge, there has never been a coal PPA, as the third-party ownership model is usually used for renewables.

ANSWER: The PPA model was removed from the solicitation under Amendment 0002. The term PPA is being used for the long-term purchase of electricity.

35. Why has this never been the case before and why does it make sense to pursue now?

ANSWER: The Government is supporting EO 14386 Strengthening United States National Defense with America’s Beautiful Clean Coal Power Generation Fleet.

36. Does that mean that product will vary by individual Task Order?

ANSWER: The Government is not procuring the product, but the electricity generated from the facility.

37. Please provide the energy profile (volume, shape, firmness) that is currently TDB.

ANSWER: Energy profiles will be provided at the DO-RFP level.

38. How will state mandated renewable requirements be managed with coal PPA?

ANSWER: State-mandated renewable goals, such as Renewable Portfolio Standards (RPS), are compliance obligations placed on energy providers (utilities, retail electric suppliers) rather than individual customers.

39. Does the price submitted in the PPA need to include necessary ancillary services required to be provided by retail electric provider?

ANSWER: Each DO-RFP will detail what ancillary services need to be provided.

40. Please confirm whether TO-PPAs require retail delivery at the meter.

ANSWER: Yes, any awarded DO-PPA will require retail delivery to the installation meter.

41. Please provide DO-RFP timeline expectations and what data will be included. (interval load, tariffs, meter)

ANSWER: DO-RFP timeline expectations will vary based on when current electricity contracts expire. The individual DO-RFP’s will contain specific installation information such as, meters and interval load data.

42. Please define “coal-based electricity” compliance: physical delivery vs attributes vs unit-tied.

ANSWER: Coal-based electricity is electricity generated from coal-fired energy production facilities. Compliance will be met with unit-tied facilities in the region where the installation is located.

43. For proposals in Alaska, are there any differences in eligibility (retail versus wholesale) given the regions?

ANSWER: All awarded DO-PPAs will be retail electricity transactions.

44. What if there’s an existing transmission line to the Alaska base?

ANSWER: Any resulting DO-PPA would still be required to be a retail electricity transaction.

45. How will the coal generation lead to additional resiliency if it is off site? If the grid goes down, the military installation goes without power, if the coals power is coming from the grid.

ANSWER: The intent of this procurement is to strengthen the grid through the diversification of resources, such as coal, for uninterrupted, base load power as detailed in the EO.

46. Our plant is in PJM. It’s often ordered offline by PJM. How will this be handled? Re delivery.

ANSWER: If the plant is generally ordered offline due to economic reasons, the plant has the option to self-schedule and just provide the energy, even if the markets do not commit you. The plant can self-schedule, as long as they meet power capacity and they self-schedule to the account number. (PJM representative assisted with answering this question at the Industry Day Event.)

47. Reading through the RFP, I was a bit unclear on who would be responsible for the land use cost recovery between the installation and the provider. Can you clarify.

ANSWER: Under Amendment 0002 we are no longer looking for coal plants to be built on military installations; therefore, there are no land use concerns.

48. What will be the evaluation criteria for choosing the winner of each DO-PPA?

ANSWER: Evaluation criteria will be detailed in each DO-RFP.

49. Our SAM registration has just been submitted. Can we offer on 5/15 if final approval isn’t received?

ANSWER: In accordance with FAR 4.203-1(b) offerors are required to have an active Federal Government contract registration in SAM when they submit an offer or quotation, and at the time of award. *Please note this response has been updated since the Industry Day Event.*

50. Will all facilities contracted through DLA be eligible for consideration? For instance, facilities normally associated with DOE?

ANSWER: The solicitation is currently only for DoW installations.

51. Does a retail electric supply need to be identified?

ANSWER: Yes, in accordance with Section H.2 you will need to identify a retail electric supplier in deregulated states.

52. Is there a limit to how many MWhs of annual coal generation could be awarded?

ANSWER: Requirements will be specified in each individual DO-RFP.

53. Under the price section it specifies the proposed cost for coal base power to Pentagon, Arlington VA. How could that be done for power generated in ERCOT?

ANSWER: Please review Amendment 0004, as the reference to Pentagon, Arlington, VA and pricing requirements have been removed.

54. Will the terms of every PPA be the same/aligned or will each PPA be negotiated with the owners?

ANSWER: Each DO-PPA requirements will be negotiated given specific regional/utility differences; however, the overarching terms of the IDIQ are still applicable.

55. Is new coal power plant build eligible?

ANSWER: Yes.

56. Will the PPA be physical or financial?

ANSWER: The request is for coal power to be generated and delivered to the grid within the region where the installation is located. For all intents and purposes, if you have a coal-fired plant in PJM and we have a base in CA that has requested an order, we will not do a financial transaction.

57. Is this a retail or wholesale transaction?

ANSWER: This is a retail transaction.

58. Can you provide detail on the potential amount of energy needed in the major RTOs, PJM, MISO, etc.?

ANSWER: Unfortunately, we can’t. The DO-RFP will provide the potential requirements associated with the energy needed within the specific RTO.

59. What timeframe of when you need the power? (w/ capacity markets, line PJM, understanding when the power is needed.

ANSWER: At this time a timeframe is unknown. Specific information will be provided in the DO-RFP.

60. What is the relationship between the pricing in the ID/IQ and the PPA pricing?

ANSWER: Pricing in the ID/IQ was removed under Amendment 0004.

61. Offers are due on May 15th, how long must they remain valid?

ANSWER: Offers are usually valid for 120 days.

62. What is the assumed PPA start date?

ANSWER: The DO-PPA start date will be identified in the DO-RFP.

63. What is the timing to enter a PPA?

ANSWER: Once the IDIQ is awarded, a DO-PPA can be executed for up to 10 years. The IDIQ will be awarded for a period 5 years.

64. When will a form or PPA be provided?

ANSWER: The IDIQ will be awarded first, and installations can issue DO-RFPs against the IDIQ once their current electricity contracts end.

65. Will DLA consider capacity-only contract structures, with or without energy dispatch rights, in markets such as PJM?

ANSWER: It is unlikely. However, you can submit an exception to any issued

DO-RFP.

66. Will DLA consider IDIQ structures with minimum quantity obligations to ensure some level of investment certainty?

ANSWER: This is currently being discussed. Any changes to the solicitation will be detailed in an Amendment to the solicitation. Continue to monitor SAM.gov for Amendments.

67. When will the terms of the PPA be provided? It is impossible to provide a price without understanding the PPA terms.

ANSWER: Terms of the PPA will be provided when the DO-RFP is solicited.

Pricing is no longer going to be required at the IDIQ stage.

68. What was the rationale behind limiting the DLA solicitation to only 5 years - with a potential extension - when the U.S. Code authority cited in the solicitation allows for up to 30 years contracts (10 USC 2922a)?

ANSWER: Under Amendment 0002 the 10 USC 2922a authority was removed from the solicitation. The IDIQ contract will be for a period of 5 years, while the DO-PPA’s can be for a period of up to 10 years.

69. What is delivery point for the PPA? Nodal? Generator’s zone? Load zone? Is it possible that more than one delivery point is specified in the PPA?

ANSWER: The delivery point will be identified in the DO-RFP solicitation(s).

70. Will DoW be open to shaped MW profile across months/years? Across peak/off-peak/ 2x16?

ANSWER: Not sure individual installations will be able to/open to purchase electricity generated from coal-fired energy projection facilities as requested, unless it is a large installation. Profiles will be provided under each DO-RFP. If you have an exception/recommendation to the DO-RFP once issued, please provide your comments at that time.

71. Will PPAs be “around the clock”?

ANSWER: Requirements will be issued with each DO-RFP. Selected contractor will be required to provide all requirements to the installation.

72. Termination for convenience is not a concept that applies to PPAs. What are the expected terms to exercise this right? What would be the basis for associated termination payments? Mark-to Market? Defined termination? Who will be the calculation agent for termination purposes?

ANSWER: The Government always reserves the right to terminate for convenience in accordance with Federal Acquisition Regulations (FAR) Part 49, https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-49. Termination language will be provided at the DO-RFP level. For examples of DLA Energy’s termination for convenience language, you can review Clause 52.212-4(l) under the following electricity solicitations on SAM.Gov: PJM SPE60425R0405, ERCOT SPE60426R0401 and New York SPE60425R0404.

Please Note: an offeror can always submit exceptions to contract language with their DO-RFP proposal, that will be reviewed and negotiated during negotiations.

Remember while DLA Energy Electricity solicitations include Fed Civ agencies, any resulting DO-RFP will only be applicable to DoW locations.

73. What will serve as governing law for the PPA?

ANSWER: The primary governing law for Department of War (DoW) federal contracts is a combination of two frameworks:

1. The Federal Acquisition Regulation (FAR)

a. The FAR, codified in Title 48 of the Code of Federal

Regulations, is the baseline regulation for all executive branch acquisitions, including those by the DoW. It sets the general rules for how the federal government procures goods and services.

2. 40 USC 501

74. Can a PPA override state legislation like CIJA in IL which forces the retirement of fossil fuel resources beginning in 2030?

ANSWER: A government contract cannot override state legislation.

75. What entity will be the contracting party on behalf of DoW? Is that entity currently established and authorized to procure and re-sell power on a retail basis under Federal and State laws?

ANSWER: Defense Logistics Agency Energy (DLA Energy) is the acquisition office that will be executing the base IDIQ. The entity contracting on behalf of specific DoW installation loads will be DLA Energy. DoW is not interested in re-selling power on a retail basis under Federal and State laws. The Government is looking to purchase retail electricity only through appropriate approved parties in accordance with State laws.

76. Will these be structured as an internal bilateral deal (for PJM) or similar structures for other RTOs? Who will be responsible for scheduling/confirming schedules?

ANSWER: The IDIQ holder will be responsible for scheduling/confirming schedules under an awarded DO-PPA.

77. How will DoW accommodate retail service requirements in non-retail choice states/ utility franchise areas?

ANSWER: It is our intent that in non-retail choice states/utility franchise areas will utilize Exhibit A under the GSA areawide contract, or a separate contract will be executed.

78. Will this transaction be reportable for Dodd-Frank purposes? Who will be the reporting party for Dodd-Frank purposes?

ANSWER: The Government is purchasing electricity. Any Dodd-Frank reporting would be the Contractors responsibility.

79. Offers are due on May 15, how long are offers expected to remain valid?

ANSWER: IDIQ offers will be valid for 120 days.

80. What is the timing expected to enter into a contract? How long following contract execution would the contract begin?

ANSWER: Specific requirement and period of performance details will be issued in the DO-RFP.

81. Is the DoW open to tenors offered by Owners or is the tenor of a defined term?

ANSWER: Specific period of performance details will be issued in the DO-RFP.

Any resultant DO-PPA will be for a defined term which can be up to 10 years, but no longer.

82. Can you tell me if this opportunity is only available to Contractors who are the owner and operator of the generator source? Coal PPA RFP SP0604-26-R-0409 Amendment 0001 notes under “Supply Resource” “The EPF shall be owned and operated by the Contractor.

I’m assuming that means the applicant must own and operate the coal-based facility. Is that correct?

ANSWER: This opportunity is not only available to Contractors who are the owner and operator of the generator source, but also available for parties that can obtain electric generation derived from coal fired resources.