RAM Bidders Conference Q&A

General RFO Questions

  1. Please expand on “full buy/sell or excess sale”.

If there is existing load at the site, you can choose to interconnect your facility in two ways. First, you can keep the energy on your side of the meter to offset your load first, and then export the excess to the grid, where the excess energy is metered. This would be classified as excess sales. Alternatively, you can interconnect your facility on the utility side of the meter and sell all the energy produced. This is classified as full buy/sell.

  1. What interest rate will PG&E use in its levelization calculations?

PG&E will use the CPUC-authorized after tax weighted average cost of capital of 7.6 percent in its calculations. This is for your information only. For the purposes of determining what is a reasonable offer price, you will need to use your firm’s cost of capital.

3.  If you have 30 MW project and related interconnection study, can you downsize in order to fall below the 20 MW threshold?

Yes.

4.  Will the final clearing price be disclosed?

There is no clearing price. You’re going to get paid the price that you bid. We will not publish prices; those are kept confidential.

5.  If one of the three buckets (as available peak, as-available off-peak, baseload) is less than 35 MW, would those remaining MW be allocated to other buckets or held for further solicitations?

We are authorized to procure plus/minus 20 MW in any bucket. We may move up to 20MW if a bucket isn’t filled but anything above will be carried over to next solicitation.

6.  Are projects that were shortlisted in the 2011 RPS allowed to bid into PG&E’s RAM solicitations? What about SCE and SDG&E’s RAM solicitations?

If you were shortlisted in PG&E’s solicitation process you are eligible to bid into the other utilities RAM. We are going to waive exclusivity requirements for shortlisted bidders and allow you to bid into Edison and San Diego’s RAM without jeopardizing your position on PG&E’s shortlist.

If you are shortlisted with either Edison or San Diego and want to bid into a RAM auction, your ability to do so would be dependent on the arrangements you have with one of those two utilities as part of your shortlist position.

PPA

  1. What opportunity will there be to provide updated versions of various design and engineering exhibits in executed PPAs?

The terms of the PPA govern that but it is possible to update those exhibits after the contract is executed.

8.  Please identify each of the terms that cannot be modified.

The Cover Sheet of the PPA contains all of the modifiable elements. The main body of the PPA is non-modifiable.

9.  How do the curtailment provisions work?

What is the maximum curtailment exposure?

The PPA has two types:

Buyer Curtailment: The PPA allows PG&E to fully curtail your project up to 100 hours annually. We will pay you for the energy that would have been delivered at the full contract price times the TOD factor.

CAI SO/Transmission Provider: this is a directed curtailment to maintain electric system stability or security. You are required to curtail with no energy payments.

Make up provision at tail end of PPA?

We don’t have that makeup provision after the term of the PPA that requires you to make up energy deliveries that you may have seen in some other utility PPAs.

Eligibility

  1. If an existing project’s current contract expires in 2015, will PG&E execute a PPA for deliveries starting after the expiration date?

No, you need to be delivering the product to us within the 18 month timeline.

11.  Does a project need to be located in PG&E’s service territory to participate in the PG&E RAM RFO? For example, can it be located in Southern California or SMUD territory.

The project can be located in the service territories of either PG&E, SCE or SDG&E and must interconnect to either the electric distribution or transmission system. Hence, it cannot be located in SMUD territory.

12.  Will projects from outside of PG&E’s service territory be treated differently, if at all, from projects from within PG&E’s service territory?

Projects outside of PG&E’s service territory will not be treated differently.

13.  Can developer experience location be outside of California and/or the USA?

Yes. We will consider any project location for certifying your developer experience.

14.  As part of the eligibility requirements, if projects of similar technology and capacity will commence construction after November 15, 2011 but prior to January 31, 2012, can those projects be included on the list of developer experience?

No. You must show that you have developed or begun construction on a project of similar technology and size before November 15; if you’re going to begin in January then you can bid into the next RFO with bids due in May 2012.

  1. If the deliverability upgrades necessary for a project to be fully deliverable takes longer than the 18 to 24 months after CPUC approval online requirement, will PG&E accept energy only deliveries prior to full deliverability?

Yes, we will accept energy only deliveries while deliverability upgrades are being completed. Note that in this RFO, you’re not required to pursue full deliverability status if there are additional upgrade costs.

Submission

  1. Does PG&E want to receive all the files a participant receives from the interconnection study process or does PG&E want only the individual study results?

We would like to you to submit everything that you have.

  1. Can more than one offer be submitted for the same project?

Yes, more than one offer can be submitted for the same project so long as only the contract capacity is varied.

  1. If updated reliability network upgrade cost estimates are available prior to issuance of Phase II study results, will PG&E accept these results?

PG&E will accept the most recent study results available by November 15, 2011. That data will be used for offer evaluation and selection.

If there are updated results after November 15th, those will not be included in the evaluation process.

Offer Form

  1. In the Technology section, if we use more than one type of model and the models have different power ratings, how should the data be entered?

Please enter the numbers in the “major equipment description” field text notes.

  1. If you have not received your full deliverability capacity study results, what should be entered in the “deliverability upgrade costs” field of the Offer Form?

If you do not have a deliverability assessment, then the deliverability upgrade cost can be left blank on the offer form.

  1. Does the offer form allow for a sliding scale of MWs capacity (e.g. a minimum of 10 MW and a maximum of 20 MW)?

The offer form does not have this feature. You need to select a specific MW amount. Although the offer form requires a fixed amount a MW, you can submit two separate offers (e.g. for 10 and 20 MW).

  1. How can the Westlands CREZ be selected?

The offer form does include the Westlands CREZ area and you can use the built in drop down feature.

Evaluation

23.  How does PG&E take into account value of a projects location?

The only factors that we are looking at for the selection process are the offer price and the cost of reliability network upgrades. We’re not putting any specific value on project location like we do in some other RFO’s.

24.  How does PG&E distinguish the value of a project that provides RA with one that does not?

PG&E does not consider RA value in the selection process. The only considerations are levelized price and seller diversity.

Interconnection

  1. If CAISO or an interconnecting utility does not meet the study period in the signed interconnection study agreement, will PG&E allow the results to be submitted after November 15th but before January 31, 2012?

No. A completed interconnection study is required at the time you submit your offer on November 15th .The next opportunity will be the second RAM program and that one is scheduled to have bids due on May 31, 2012.

  1. Do existing projects need to show interconnection studies?

No, unless you are expanding the facilities in a manner that requires a new interconnection application.

  1. If a participant includes reliability network upgrade costs in project pricing and PG&E includes a network upgrade adder in its analysis, is double counting occurring?

No. Your offer price should include the costs for which you are responsible as developer. With respect to network upgrades, you are responsible for financing the costs assigned to you. These costs are generally refunded to you after 5 years and are ultimately borne by ratepayers.

PG&E’s analysis includes the costs that are borne by ratepayers. This includes the reliability network upgrade costs. What is the difference between reliability network upgrades and deliverability network upgrade costs?

Reliability network upgrade costs are costs for interconnection that are required in order to be an energy-only resource. Deliverability upgrade costs are the costs necessary to achieve full deliverability (resource adequacy). For the RAM RFO, we will only use the reliability network upgrade costs in ranking offers. However, we still want to know the costs of your deliverability upgrades.

  1. What is the URL of the GIS website with the queue list?

http://www.pge.com/mybusiness/customerservice/nonpgeutility/generateownpower/wholesalegeneratorinterconnection/#thesmallgeneratorinterconnectionproceduresfortransmissionsysteminterconnectionstransmissionsgip

  1. Where can the P-node list be found?

There is no P-node list. The CAISO assigns each project an individual P-node.

30.  Can CAISO Cluster 4 projects participate in the RAM RFO if the Phase 1 studies are released on January 3, 2012 as they have currently indicated?

No. If studies are not available by November 15, 2011, then you are not eligible to participate in this year’s 2011 RAM RFO. The next opportunity is the second RAM program with bids due by May 31, 2012.

  1. If capacity is added to an existing wind LGIA, will a new interconnection study be required for the RAM RFO?

It depends on whether your existing LGIA can accommodate incremental capacity. If you are seeking a material modification to your LGIA, then a new interconnection application is required. Depending on whether the interconnection point is to the CAISO controlled grid or to the distribution system, the respective entity will make the determination if the change is material or not.

32.  In terms of the pass/fail eligibility requirements, if an interconnection study indicates in writing that the schedule to complete interconnection is outside the 18 month (11/2013) window, will the project immediately be disqualified?

No, this will not result in immediate disqualification. If you have a Phase I study we recognize that the Phase II study may indicate less time required to complete necessary upgrades. a. You should also be aware that it could show a longer time to complete as well. You are at risk for meeting the on line date.

The interconnection studies include an estimate of the time required to build the network upgrades. The work does not begin when the study is done, but when the interconnection agreement is signed.

33.  How is PG&E calculating the $/MWh network upgrade cost adder? How many years of production is the cost spread over?

PG&E takes a dollar cost capital investment for the network upgrades creates an annual revenue requirement for that. We calculate the revenue requirement assuming a 20 year term project life and a 7.6% discount rate.

  1. Will pricing and rank be adjusted for network upgrades? If so, should the seller assume this cost or will PG&E add it?

As described above, your offer price should include all costs for which you are responsible. PG&E will add the reliability network upgrade costs. The adjusted ranking (price + network upgrades) will be used for project selection.

35.  Have the IOU’s coordinated regarding interconnecting facility upgrade timing? Are the developers at risk of missing COD due to slow moving processes in other IOU’s service territories?

We do not coordinate with other utilities on the timing for planning and construction of network upgrades. For interconnection process in any one of the three utilities you are responsible for understanding the interconnection process and making sure that you can meet the 18 month on line date.

We have coordinated with the other IOUs in terms of having an identical schedule for offer submittal and bidder notification, and all 3 IOUs require commercial operation within 18 months of contract approval.

36.  How long can a developer keep an interconnection agreement on hold? (New Post 11-07-2011)

The interconnection agreement cannot be placed on hold. There are very defined timelines that must be followed.