PJM_Navy_RFI_Group_4.pdf

RFI Group 4

1. Can you provide historical billing demand data for each account?

Response: See Attachment 8 Historical Demand and PLC/NITS Tags in Amendment 0005

2. In the Description section of the Requirements Summary on page 3 of the RFP, DLA provides values in kWh that the Contractor is expected to supply to PEPCO and BG&E.

Section 3.1.2 states “At a minimum, 51% of the energy requirements shall come from new renewable energy resources.” The 51% requirement is inconsistent with the values provided on page 3. In addition, Section

3.1.2 does not specify whether that 51% applies to historical data, contract year one only, or to each year of the Projected Annual Changes documented in Attachment 1.

Response: The Government is looking to maximize its consumption of renewable energy under the procurement up to 100% of the Installation load. Refer to Section C.4.2. In the description section of the Requirements Summary on page 3, the Government provides the total amount of annual supply of electricity that is required to be produced with the minimum limitation that must come from a new offsite renewable facility. See section M.1.4.1a for the requirement of meeting the Minimum Production Guarantee on a contract year basis.

3. Section L.4.2.2: Which method of delivery is required of energy production, a CR-ROM or a printout or both?

Response: The Government does not require an hourly output profile for this solicitation. The Government only requests annual output production as stated in section L.5.1.a Subfactor 1: Renewable Energy Production, Design, and Implementation. Please see Amendment 0005 for updated language.

4. Could the Government please provide the capacity and NITS tags for all Navy meters included in both RFPs.

Response: See Attachment 8 Historical Demand and PLC/NITS Tags in Amendment 0005.

5. In addition to the interval data already provide, is it possible to obtain for each account Capacity PLC, Transmission NSPL, Utility Rate Class/Code, and, for the Naval Academy, account the service voltage (BGE Rate P loss factor varies depending on service voltage).

Response: See Attachment 8 Historical Demand and PLC/NITS Tags in Amendment 0005

6. How does the Navy plan to evaluate the anticipated cost of that additional PJM spot market energy passed through? Depending on the generation profile of the project, the cost of that spot market energy would be vastly different. A wind plant would pass through the cost of peak summer power while a solar plant would pass through the cost of off peak winter power. Two proposals could have very different Firm Fixed Commodity Price RESA with RECs, but the overall kWh cost to the Navy could be very similar depending on the cost of the PJM spot market energy.

Response: Price will be evaluated as stated in M.1.7 Factor 4 – Price, which does not consider spot market pricing.

7. Attachment 2 Pricing workbook. How are we supposed to distinguish our proposed REGS production from the non-renewable (“brown power”) commodity supply in the Attachment 2 pricing worksheet?

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Response: In the pricing worksheet, the Government is only requesting the Contractor to provide the amount of renewable energy proposed for the Installation.

8. Time of day. Will the Government assign any differential value to the renewable power supplied by the bidder based on the time of day it is provided? In other words, will all kWh supplied be valued the same regardless of whether they are generated intermittently during the day (like PV) or more in the evening (wind), or consistently throughout the day and night (biomass)?

Response: The Government is looking at production on an annual basis regardless of when the kWh’s are produced. All kWh supplied will be valued the same regardless of what time of day it is generated.

9. On the “Interval Data By Account Number” worksheet in the Installation Data Sheet for Midlant (Attachment 1), the “Account Number” column of data is titled “Interval End.” Could the Government confirm that all hourly data provided for Navy loads represents usage for the “hour ending” (rather than “hour beginning”) at the time stamp listed?

Response: Yes, the hourly data represents the “hour ending”.

10. The RFP suggests scheduling of renewable power from the asset to installations. This will not reduce site PLCs or NSPL tags as it still utilizes the PJM system. Since PJM is a Regional Transmission Operator and electricity, when injected into PJM, is not discernable between electrons, we would like to ensure the Government is aware of the required financial settlement from the asset location with any renewable attributes being delivered exclusively to the Government.

Response: The Government understands the Capacity and Transmission Peak Load Contributions will not be impacted by offsite renewable generation.

11. Has the government contracted for any behind the meter generation at any installation?

Response: No. As stated in B.1.2 CLIN DESRIPTION, Special Notes (2) the Government reserves the right to pursue and implement energy conservation measures which has the potential to reduce electricity consumption at the seven Department of Navy installations in this solicitation by 10% by 2020. These reductions do not reflect the removal of building or facilities from the Installation load, but instead would result from successful energy efficiency and energy use programs. Future consumption includes adjustments for potential behind-the-meter projects on installations in the PJM region up to approximately 10MW of installed solar PV for any given installation. These projects would not reduce DON's electricity purchase below the minimum annual purchase guarantee stated in the RFP.

12. Are there expectations to materially change the load at any installation? Naval Station Great Lakes does not show any expected increase, but the Contractor has been advised ancillary to this RFP of the installation’s expectations for demand to change.

Response: No. As stated in B.1.2 CLIN DESRIPTION, Special Notes (2) the Government reserves the right to pursue and implement energy conservation measures which has the potential to reduce electricity consumption at the seven Department of Navy installations in this solicitation by 10% by 2020. These

PJM NDW RESA SPE600-15-R-0409 Page 2 reductions do not reflect the removal of building or facilities from the Installation load, but instead would result from successful energy efficiency and energy use programs. Future consumption includes adjustments for potential behind-the-meter projects on installations in the PJM region up to approximately 10MW of installed solar PV for any given installation. These projects would not reduce DON's electricity purchase below the minimum annual purchase guarantee stated in the RFP.

13. What sort of RFP process is the Government seeking for capacity? Capacity is procured for Load Serving Entities (LSEs) by PJM through the Reliability Pricing Model (RPM) auction. Load cannot be segregated.

Response: Capacity charges shall be treated as a direct pass-through to the Government. For each day of the month, the Government shall pay the Contractor the product of the capacity price and the account’s Capacity Obligation. The capacity price is the PJM zonal capacity price, expressed in dollars per megawatt-day. The account’s Capacity Obligation is defined as the Obligation Peak Load for the account times the Final Zonal Reliability Pricing Model (RPM) Scaling Factor times the Forecast Pool Requirement, as those terms are defined by PJM, for the relevant time period and zone in which the account is located.

14. What are the penalties for a project that comes on late due to items such as but not limited to: environmental regulations, environmental lawsuits, development delays, construction delays, etc.

Response: Once a Contractor has been selected, a Notice of Intent to Award (NOITA) will be issued with conditions that will need to be finalized prior to actual contract award execution. In the event a situation arises because of a situation that is outside the reasonable control of the contractor, the Government will evaluate the circumstances on a case by case basis as to determine a course forward. In the event the selected Contractor is unable to fulfill its responsibilities under the NOITA, the Government will consider the next best value Contractor within the competitive range.

15. As noted in question set 2, question 14, Other Market Charges will not be permitted to change or adjust with changes in rates or regulation. PJM is implementing Capacity Performance (see FERC Docket ER15-623- 000, likely for the ‘15-‘16 capacity year. There have been many filings and comments, from PJM, FERC, and the Retail Energy Supply Association about the unknown costs. State auctions (Provider of Last Resort, Standard Offer Service, etc.) have seen limited responses and high costs to end users with limiting suppliers from passing through these costs. Suppliers would be forced to pass through high risk premiums to the government. The contractor recommends passing through those costs, when known, without markup.

Response: Offerors should price using the current methodology and once a final ruling is made the Government will evaluate and make any necessary changes at that time.

16. Attachment 2 for the RFP, the Production & Pricing Worksheet, lists year to begin 2016 as a year. The RFP states that a deal is to start no later than December 2016. What is the Government seeking for 2016?

Response: The Government is estimating a start date of delivery by Dec 2016.For purposes of evaluation it is requested that Contractors apply a complete year for proposed production and cost.

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17. The RFPs ask for “2 CDs of the entire proposal”, but then also state “The Offeror shall submit a separate CD-

ROM for the Hourly Output table as detailed in Attachment 2, Production and Pricing Worksheet for each proposal submission required under Section L.5.1.3.1.” Does the government want the initial 2 CDs to also have “Attachment 2” included in Excel format as well? Or is it OK to simply have 5 PDFs (representing each of the 5 volumes) on those 2 CDs?

Response: The Government does not require an hourly output profile for this solicitation. The Government only requests annual output production as stated in section L.5.1.a Subfactor 1: Renewable Energy Production, Design, and Implementation. Please see Amendment 0005 for updated language.

18. Section L.5.1.1.a.iv: Does the following count toward the 50-page maximum limit for Volume 1:

interconnection agreements and studies?

Response: Please see Amendment 0005 for updated information.

19. In Section L.5.1.1.a Subfactor 1: Renewable Energy Production, Design, and Implementation, (iv) the

Government requests:

(2) Copies of interconnection requests, agreements, studies or notices.

(3) Copies of documents indicating status in PJM generation interconnection process.

The Interconnection documentation and status documentation are approximately 150 pages. Will the Government accept electronic versions on the proposal CD rather than hard copies as an appendix to Volume I?

Response: Yes, in cases where the appendix will exceed a reasonable size you can provide a CD.

20. Does the Navy require a 12x24 (or 8760 hourly) wind expected profile of production for the facility?

Response: The Government does not require an hourly output profile for this solicitation. The Government only requests annual output production as stated in section L.5.1.a Subfactor 1: Renewable Energy Production, Design, and Implementation. Please see Amendment 0005 for updated language.

21. Delivery Date. The Solicitation states that power must be delivered beginning December 2016. We assume this date was selected to take advantage of the Investment Tax Credit (ITC) for renewables, which expires in its current form at the end of 2016. Would the Government consider a proposal that does not depend upon ITC, but may not become commercial until after January 2017 and still run for 20 years from that COD?

Such a project would still meet the Navy’s intent to procure substantial renewable power and would actually be less risky to the Government as it would not be vulnerable to delays by the Government (or other delays) that would otherwise threaten the ITC eligibility.

Response: The Government would consider the proposal as an alternate proposal submission that could possibly be considered for award.

22. Blended Rate. Per the Definitions, the Blended Contract Unit Price equals CLIN1 Renewable Energy, plus CLIN2 Firm Fixed Transaction Fee, plus CLIN3 Other Market Charges (only fixed for first two years). Is it

PJM NDW RESA SPE600-15-R-0409 Page 4 this Blended Rate that cannot exceed the Maximum Contract Unit Price as defined in the Solicitation, or just the CLIN1 Rate?

Response: The Blended Contract Unit Price is the rate compared to the Maximum Contract Value.

23. How does the Not to Exceed price apply during terms when items are not fixed (i.e. years 3, 4, and 5 and beyond)? It would seem that the Not to Exceed price could only be provided for 2017 and 2018.

Response: Other Market Charges CLINs shall be firm fixed price for the first two years. In delivery year 3, these charges will convert to a direct pass-through with no mark-up to the Government. Section B.1.3 identifies all Other Market Charges applicable to the procurement. The Government is aware that starting in year 3 that the Blended Contract Unit Price may exceed the Maximum Contract Unit Price as a result of the unknown Other Market Charges rates that will be passed through.

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