FERMI__QA_Round_2_ao_17Mar16.docx

DLA FERMI LABS

Solicitation SPE600-16-R-0404

Please find below the Government’s responses to questions and request for clarifications regarding DLA Solicitation SPE600-16-R-0404. All other questions that were submitted and not answered within this document are still being researched or considered exception to the terms and conditions of the RFP and shall be included in your bid response as such.

1. Does Fermi expect shaped blocks? Or only blocks as described in the Solicitation, Section B19.46 (7x24, on-peak or off-peak blocks)?

A: Only as blocks described in the solicitation.

2. Fermi's Installation Sheet shows peak demand of up to 46 MW, but Attachment V reflects up to 50 MW of power block locks. Is Fermi intending to lock more supply than it consumes? If so, does Fermi plan to sell the excess in the market?

A: The blocks have been sized based on anticipated load.

3. Alternatively, is Fermi ramping up its consumption? If so, please provide a ramp-up schedule with the scope and size of the ramp-up.

A: The blocks in the spreadsheet, is the best assessment of increases in consumption based on internal feedback from the customer.

4. Consumption data for August and September look very low for summer months. Please confirm that the Installation Sheet load is accurate for these months.

A: Yes, it is accurate and reflects accelerator shutdown.

5. Please clarify what the Government means by and expects to see in the way of Peak Load Contribution (PLC) documentation referenced in Item (6) page 20 of 31.

A: The Peak Load Contribution (PLC) is two unique values created for each electric account within the ComEd zone derived from Capacity PLC and Network Service PLC. Retail Electric Suppliers may obtain this information from ComEd.

The Government is requiring documentation IAW Section C804 (b) (14) FERMI_2016_Combined_Synopsis_Amendment 0001 posted to FBO on 2-19-16.

6. How will invoices from ComEd and Contractor be sent to DOE at the same time when both ComEd and Contractor will be billing Fermi directly?

A: The solicitation is for dual billing. An authorization form will be provided to the contractor which will allow the release of ComEd invoice to the Contractor. The Contractor will then provide the ComEd invoice and their invoice at the same time.

7. To facilitate broadest participation by wholesale marketers, is Government willing to notify Contractor the day before it plans to request fixed price power blocks?

A: Please see document titled Attachment V Block Purchase Schedule in FERMI_2016_Combined_Synopsis_Amendment 0001posted to FBO on 2-19-16.

8. Once the Government receives executable pricing, does the Government plan to accept or reject the quote right away (within 10 minutes)?

A: Per Clause 19.46 (1) (IV) Within one (1) hour of receiving notification from the Contractor regarding the proposed price of a firm-fixed price block, the Government will notify the Contractor of its preliminary decision to request a refreshed executable firm-fixed price for the block. Within one (1) hour of the Government’s notification, the Contractor shall provide a refreshed, executable firm-fixed price for the block to the Government, at which time the Government may direct the Contractor to purchase the block at the refreshed, executable price.

9. In times of market volatility, will Government allow Contractor to refresh prices before execution?

A: See response to Question 8.

10. Are ancillary services included in the Supplier Service Fee?

A: Ancillary services that cannot be specifically addressed as Electricity and/or Other Market Charges components described in this section B19.46 BLOCK PURCHASES (ELECTRICITY) (DLA ENERGY) (JAN 2012) should be included in the service supply fee.

11. Are line losses included in the Supplier Service Fee?

A: Please see response to Question 10.

12. 10. Is the fixed RPS cost included in the Supplier Service Fee?

A: Please see response to Question 10.

13. The offeror understands that it is the Government's desire to have the Supply Service Fee fixed and that the balancing and operating reserves should be included in this number. However, balancing and operating reserves often fluctuate and are variable costs. Please elaborate on what is to be included in the Supply Service Fee. As a point of elaboration, the risk associated with fixing balancing and operating reserves could prove to be very costly due to the fact that the cost is variable and forecast/estimations would need to be made in an effort to capture the cost over the life of the agreement. Would Fermi consider passing through balancing and operating reserves and excluding this from the Supply Service Fee?

A: Balancing and operating reserves will remain a part of the service supply fee.

14. In addition to the block schedule that will be provided in Attachment V, should this offer become the winning bidder, would the Government be open to providing load forecast on a regular basis (every24-48 hours) to provide the most accurate rates and portfolio management? As a point of clarification, would Fermi notify the contractor of any significant changes in load with a 24-48 hour notice?

A: Fermilab will continue to make reasonable efforts to provide information about significant load changes.

15. Is the Government requesting that the hourly energy usage used to price the blocks be based off of NERC hours or Utility (Com Ed) hours? As a point of clarification, contractor recognizes that the blocks would be delivered to the Com Ed Zone. In regards to pricing the blocks using On and Off Peak hours (should Fermi request On/Off Peak pricing blocks as noted in the solicitation), should the blocks be priced based on NERC On Peak Hours (6am-10pm Mon-Fri) or Com Ed On Peak Hours (9am-10pm)? Due to the fact that different hours of the day are covered using each methodology, this would net in different cost to Fermi. Therefore, it is imperative to know what Fermi prefers.

A: NERC hours

16. Contractor wishes to clarify that the prices in its submission will not include any costs related to FERC Order 745. “FERC Order 745 costs” refers to any costs or charges imposed by the ISO on load served by Contractor in accordance with complying with the provisions of Federal Energy Regulatory Commission (“FERC”) in Order No. 745 18 CFR Part 35 (March 15, 2011). Any modifications or conditions to the treatment of FERC Order 745 Costs under the ISO tariff or otherwise shall be deemed a change in regulation pursuant to the applicable section of the Solicitation.

A: FERC Order 745 cost should be treated as a pass through with no mark up.

17. This entry is to correct the Governments response to Question number 4 of Q&A Posted as of 3-2-2016:

Q: Is the Government requesting that the hourly energy usage used to price the blocks be based off of NERC hours or Utility (ComEd) hours?

A: NERC hours

Q&A Posted as of 3-2-2016

1. Is there a way to obtain more historical data (more than 12 months) on the account?

A: The Government will provide Letter of Authorizations to all responsive and responsible bidders after the receipt of offers; This LOA will allow offers to request the usage, load, interval data, etc., as needed.

2. The offeror understands that it is the Government’s desire to have the Supply Service Fee fixed and that the balancing and operating reserves should be included in this number. However, balancing and operating reserves often fluctuate and are variable costs. Please elaborate on what is to be included in the Supply Service Fee.

A: Please refer to B19.46 (c) SUPPLY SERVICE FEE on page 19 of the solicitation.

3. In addition to the block schedule that will be provided in Attachment V, should this offeror become the winning bidder, would the Government be open to providing load forecast on a regular basis (every24-48 hours) to provide the most accurate rates and portfolio management?

A: Please see document titled Attachment V Block Purchase Schedule in FERMI_2016_Combined_Synopsis_Amendment 0001posted to FBO on 2-19-16.

4. Is the Government requesting that the hourly energy usage used to price the blocks be based off of NERC hours or Utility (ComEd) hours?

A: The block shall be delivered to the ComEd zone.

5. On page 19, the RFP states that, “The contractor shall submit both the ComEd and supplier bills to the customer at the same time. Invoices must be submitted in both hardcopy and electronic form.” With dual billing, the supplier does not receive an invoice from ComEd. ComEd sends the delivery service charges directly to the customer. Please clarify and confirm that the Government is requesting dual billing (one invoice from the supplier and one invoice from the utility).

A: The Government will utilize Dual Billing for any and all applicable awards made under this solicitation.

6. In the Synopsis added January 20, 2016, the Government states that it seeks to procure energy in blocks at the Northern Illinois Hub (NI Hub) with the remainder to be taken at the ComEd Zone LMP. Please clarify whether the Block will be delivered to the NI Hub or at the ComEd Zone. If the Block is to be delivered at the NI Hub will the Government agree to pay for the basis and if not, can Contractor deliver to the ComEd Zone?

A: The block shall be delivered to the ComEd zone.

7. RFP Clause B19.46 Block Purchases. This clause provides that for each separate block purchase, the Contractor will obtain pricing quotes from at least three wholesale counterparties, or at least four if one of the quotes is from a Contractor affiliate. It also requires that Contractor will provide those quotes to Government upon request to ensure that adequate competition is being obtained.

Please confirm that if required by confidentiality agreements or obligations, the Contractor may withhold the identity of the wholesale counterparties from whom the pricing quotes are obtained, and redact the names of such wholesale counterparties from any correspondence or written communication to the Government, including audits.

A: Contractor may withhold the identity of the wholesale counterparties from whom the pricing quotes are obtained and redact the names of such wholesale counterparties from any correspondence or written communication to the Government.

Pursuant to FAR 52.212-5 (d), Comptroller General Examination of Record (as shown on page 15 of this solicitation), the Government has the right to audit the price quotes or other information submitted by the Contractor’s electricity suppliers in order to verify price reasonableness and best value.

8. Please confirm that the Government will accept fewer than 3 or 4 quotes if market liquidity is such that fewer pricing options are available.

A: The Government will not accept fewer than three quotes.

9. RFP Clause B19.46 Block Purchases (1) Electricity – Purchase by Firm-Fixed Price Blocks. We are confused by the following statement from subpart (i): “Any modification to the Block Purchase Schedule shall not exceed 12 months beginning one month subsequent to the date when the Government directs the Contractor to make a block purchase, unless different terms are mutually agreed upon.” Please provide an example of the timeline the Government envisions will apply to the Block Purchase Schedule.

A: Please see document titled Attachment V Block Purchase Schedule in FERMI_2016_Combined_Synopsis_Amendment 0001posted to FBO on 2-19-16. Any modification to the Block Purchase Schedule would not affect any block scheduled to be purchased within one month of the date the Government directs the Contractor to make a block purchase. This could, at the earliest, include blocks scheduled to be purchased one month after the date on which the Block Purchase Schedule was modified; and at the latest, include any block purchases scheduled over the next twelve months following this earliest possible date. Any modification affecting scheduled block purchases outside of this range would be mutually agreed upon.

10. RFP Clause B19.46 Block Purchases (4) Renewable Energy Credits.

Please clarify whether the Government wants to see the Fixed REC component as a separate line item on the invoice or is it to be included in the Fixed Supply Service Fee?

A: Per Clause 19.46, the Renewable Energy Credit charges is identified as “Other Market Charges” therefore NOT included in the Supply Service Fee; and shall be invoiced in accordance with the INVOICE clause.

11. We believe that the true-up calculation set forth in the first Note for subpart (4) may result in unintended consequences and the inability to true up for the final months of the term.

The RFP’s example of how the true-up calculation would be applied does not address how the ACP will be applied for the planning year June 2020 – May 2021. As written, in July 2019 and July 2020, the charge would be based on all billed volumes that correspond to the planning year (June – May each year during the term). How would the charge be handled for the planning year June 2020 – May 2021 which impacts charges or credits in 2020? Since the 36 month term requested ends with the last meter read in December 2020, actual corresponding ACP values won’t be known until 7 months after the expiration of the contract.

A: The Government recognized that the actual ACP rate necessary to true-up the RPS payments made during the final year of the contract (January 2019 – December 2019) would not be available until June 2020. It is acceptable that the credit due to, or charge owed by, the Government (as applicable) be resolved outside of the contract period so long as the true-up value is calculated solely based on energy consumed by the customer during the contract period and in accordance with Section B, Provision B19.46 BLOCK PURCHASES (ELECTRICITY) (DLA ENERGY) (JAN 2012), Paragraph (b)(4) of the solicitation.

12. Please clarify how the Government anticipates handling the addition of future accounts to the resultant contract?

A: The Government does not anticipate the addition of future accounts under any contract resulting from this solicitation.

13. RFP Clause 52.212-4(l) – Termination for the Government’s Convenience. Please confirm that in the definition of the forward market bid price in subpart (B), the reference to ERCOT should be to PJM.

A: The Government acknowledges the reference to “ERCOT” should read “PJM” and will correct the RFP in a forthcoming amendment.

14. Please clarify the difference between Item (9) – Auction Revenue Rights credit and Item (12) Capacity.

A: Auction Revenue Rights (ARRs) are the mechanism by which the proceeds from the Annual Financial Transmission Rights Auction are allocated. PJM's capacity market, called the Reliability Pricing Model, ensures long-term grid reliability by securing the appropriate amount of power supply resources needed to meet predicted energy demand in the future.

15. RFP Clause C804(e) Record Keeping. Contractor does not keep records of data required to bill in a format compatible with Microsoft Access or in Microsoft Excel. However, Contractor is able to convert the data to Excel. Please confirm that this is acceptable to the Government.

A: Microsoft Excel is an acceptable format.

16. Please confirm that the DLA is requesting a 36 month term beginning on the January 2017 meter read date ending on the December 2019 meter read date and that the references to December 2020 in RFP Clause B1.08-2(d) and Clause B19.46(b)(4) should be changed to December 2019.

A: The Government acknowledges the reference to “December 2020 should read “December 2019” and will correct the RFP in a forthcoming amendment.

17. For Clarification. Section (4) Renewable Energy Credits specifically the ACP REC True up. Once the yearly rates are published and the true up performed can it be bundled into Adjustment line item?

A: If offeror is requesting that the ACP be bundled into the existing SSP line item, then this option is not acceptable to the Government.

18. Offers are to be held firm for 5 days. Will Suppliers be able to refresh after the 5 day period?

A: That determination will be made as necessary.

19. Regarding the “Tax” provision in FAR 52.212-4, could we get clarification on what taxes would be included? Supplier does not included taxes in the pricing for IL, nor do we pass any through.

A: It is the contractor’s responsibility to determine which Federal, State and Local taxes are to be included.

20. Also, could we get clarification on the electronic submission requirements that are mentioned in the 1st NOTE in this provision?

A: The customer at Fermi National Lab is requesting an electronic copy (PDF) of the monthly invoice in addition to hard copy invoice.

21. Does the Government currently have a PJM subaccount? If not, would the Government be open to a subaccount?

A: The Government will allow contractors to setup PJM subaccounts as long as it meets the terms and conditions of the solicitation.