Request for Proposal (RFP) for Unbundled Renewable Energy Credits (Recs)

Request for Proposal (RFP) for Unbundled Renewable Energy Credits (RECs)

Issue Date:October 2, 2015

Due Date:October 22, 2015

PacifiCorp is seeking proposals (bids) from parties interested in providing firm unbundled Renewable Energy Credits (“RECs”) that qualify for compliance with the California Renewables Portfolio Standard (RPS)[1] The RECs must also be generated from a facility located in the WECC territory and the facility must register and comply with WREGIS requirements. The offered quantity of RECs for each vintage period must be firm and not unit contingent.

PacifiCorp’s goal in issuing this RFP is to acquire unbundled RECs at competitive prices to enable PacifiCorp to meet its RPS requirements.

Interested sellers should provide PacifiCorp with the Bid Submittal Requirements (below) by 9:00 a.m. Pacific Prevailing Time (PPT) of Due Date with e-mail to:

Bids will be reviewed and a final selection determined. Bidder will be notified by October 29, 2015 if they have been selected for negotiation of a REC purchase agreement. REC purchase agreements are subject to review and approval by the California Public Utilities Commission (CPUC).

REC RFP TERMS:

Seller:Counterparty (“Bidder”)

Buyer:PacifiCorp

Product(s):Firm, unbundled RECs from Eligible Renewable Resources, and eligible for meeting compliance requirements of the California Renewables Portfolio Standard Program.

RECs must be sourced from facilities already certified by the California Energy Commission (CEC) tracked in the Western Renewable Energy Generation Information System (WREGIS) and generated in the Western Electricity Coordinating Council’s (WECC) territory.

Tracking System: Western Renewable Energy Generation Information System (WREGIS); all RECs offered must be registered in WREGIS.

Underlying Agreement:

Existing enabling agreement, or PacifiCorp’s Pro Forma Renewable Energy Credit Purchase and Sale Agreement (Appendix A).

Effective Date:The effective date of transaction will be the first day following the date on which CPUC Approval becomes final.

CPUC Approval:Means a final and non-appealable order of the CPUC, without conditions or modifications unacceptable to the Parties, or either of them, which contains the following terms: (a)approves this Agreement in its entirety, including payments to be made by the Buyer, subject to CPUC review of the Buyer’s administration of the Agreement; and(b) finds that any procurement pursuant to this Agreement is procurement from an eligible renewable energy resource for purposes of determining Buyer’s compliance with any obligation that it may have to procure eligible renewable energy resources pursuant to the California Renewables Portfolio Standard (Public Utilities Code Section 399.11 etseq.), Decision 03-06-071, or other applicable law. CPUC Approval will be deemed to have occurred on the date that a CPUC decision containing such findings becomes final and non-appealable.

Proposal A Terms:

REC Quantity:Means quantity of RECs delivered; the minimum amount of RECs offered by a prospective seller shall be, for each vintage calendar year, at least 1,000 RECs.

Vintage Period(s):Means the period in which the RPS-eligible energy is generated.

REC Delivery Term:Proposal A REC Delivery Term shall begin from the Effective Date and shall continue until completion of REC delivery and payment.

REC Price:$/REC

Proposal B Terms:

REC Quantity:Means quantity of RECs delivered; the minimum amount of RECs offered by a prospective seller shall be, for each vintage calendar year, at least 1,000 RECs.

Vintage Period(s):Means the period in which the RPS-eligible energy is generated.

REC Delivery Term:Proposal B REC Delivery Term shall begin from the Effective Date and shall continue for a continuous period of at least 120 calendar months, and end on the last hour of the last day of the 120th month or April 1, 2026, whichever is later.

REC Price:$/REC

RFP SCHEDULE:

PacifiCorp intends to proceed as quickly as possible with evaluating the responses to this RFP and entering into contract negotiations with a preferred supplier(s). This proposed schedule is subject to adjustment based on PacifiCorp's evaluation process. PacifiCorp accepts no liability to the extent the actual schedule is different from the anticipated schedule. The current schedule, which is subject to change, is:

Interested parties and Bidders may submit questions, which will be addressed in a timely fashion. Any questions on the RFP or related documents should be sent to the Company via email at:

EVALUATION OF RESPONSES:

PacifiCorp will evaluate bids based on assessment of the merits of proposals with regard to meeting its need. Each proposal will be evaluated based on its compliance with this RFP and according to the following information:

• REC Price
• REC Quantity
• Firm offer to sell RECs
• REC Delivery Term of proposed contract
• WREGIS account holder status
• Financial viability of Bidder
• Reliability of REC supply and delivery
• CEC certification for the generation facility(ies)
• References/experience

BIDDER’S CREDIT INFORMATION:

Upon being selected to negotiate an Underlying Agreement, the Bidder is to provide the following information to enable PacifiCorp to evaluate the financial viability of the Bidder and any entity providing credit assurances on behalf of the Bidder, if applicable.

1.Credit information for Bidder

1. Exact legal name and address of Bidder.
2. Debt Ratings from S&P and/or Moody’s (please provide senior unsecured long term debt rating (or corporate rating if a debt rating is unavailable). Please indicate type of rating, rating, and source.
3. Please attach copies of audited financial statements (including balance sheet, income statement, and cash flow statement) for the three most recent fiscal years.
4. Identify pending legal disputes (describe).
5. Please state whether Bidder is or has within the past five (5) years been the debtor in any bankruptcy proceeding.
6. If Bidder is unable to provide audited financial statements or is relying upon another entity to provide credit assurances on its behalf, Bidder must indicate the following:

Is Bidder unable to provide audited financial statements?

Is Bidder relying up another entity(ies) to provide credit assurances on Bidder’s behalf?

1. Bidder should demonstrate its ability (and/or the ability of its credit support provider to provide the required security, including its plan for doing so (including type of security, sources of security, and a description of its credit support provider).

2. Credit information for entity(ies) providing credit assurances on behalf of Bidder (if applicable)

1. Exact legal name and address of entity(ies) providing credit assurances on behalf of Bidder.
2. Describe relationship to Bidder and describe type of credit assurances to be provided (e.g., parental guaranty, letter of credit, etc.). Bidder must provide to Company a letter(s) of commitment acceptable to Company from the entity(ies) providing the credit assurances on behalf of the Bidder executed by an authorized signatory and indicating the amount and form of credit assurances it will provide. It should be noted that more than one commitment letter, or more than one form of commitment letter, may be necessary.
3. Debt Ratings from S&P and/or Moody’s (please provide senior unsecured long term debt rating (or corporate rating if a debt rating is unavailable). Please indicate type of rating, rating, and source.
4. Please attach copies of audited financial statements (including balance sheet, income statement, and cash flow statement) for the three most recent fiscal years.
5. Pending legal disputes (describe).
6. Please state whether entity(ies) providing credit assurances on behalf of the Bidder is or has within the past five (5) years been the debtor in any bankruptcy proceeding.

PacifiCorp will not accept collateral thresholds, credit ratings triggers, general adequate assurances language or similar language that might require the Company to provide performance assurances to the Bidder. However, PacifiCorp may require the Bidder to provide a commitment letter(s) from a proposed guarantor(s) and/or from a financial institution(s) that would be issuing a letter of credit as performance assurances on behalf of the Bidder. The amount of performance assurances to be provided will be determined based upon factors which include the following:

a)The Credit Rating of the Bidder and the entity(ies) providing credit assurances on behalf of the Bidder, if applicable.

b)Terms of the underlying contract.

c)The volume to be delivered.

In order for PacifiCorp to perform a credit evaluation on the Bidder or the entity providing credit assurances on its behalf, audited financial statements (including balance sheet, income statement, and cash flow statement) for the three (3) most recent fiscal years must be provided to the Company.

The Credit Rating is defined as the lower of: x) the most recently published senior, unsecured long term debt rating (or corporate rating if a debt rating is unavailable) from Standard & Poor’s (S&P) and/or y) the most recently published senior, unsecured debt rating (or corporate rating if a debt rating is unavailable) from Moody’s Investor Services. If option x) and y) are not available, the Credit Rating will be determined by the Company through an internal process review utilizing a proprietary credit scoring model developed in conjunction with a third party. All Bidders will receive a Credit Rating which will be used in determining the amount of any credit assurances to be posted. With few exceptions, PacifiCorp will expect sellers with sub investment-grade credit ratings (or being of similar creditworthiness) to provide performance assurances acceptable to the Company.

Please note that a financial institution providing a letter of credit as performance assurances on behalf of the Bidder must have at all times a Credit Rating of at least ‘A’ and ‘A2’ from S&P and Moody’s, respectively, and have assets (net of reserves) of at least $10,000,000,000. Should the financial institution providing credit assurances on behalf of the Bidder fail to meet these minimum requirements PacifiCorp will require credit assurances from a replacement financial institution that does meet the requirements.

BID SUBMITTAL REQUIREMENTS:

Companies are invited to submit their proposals electronically in Word, Excel or PDF format (or any combination thereof) by September 22, 2015 to:

The subject line of bid submission must include ‘RFP Response’ along with the name of Company.

Bid Format:

In order to evaluate the bids consistently, PacifiCorp requests that bid for Proposal and or Proposal B be prepared using the following numbered content and organization:

1.Identification of Respondent:

• Full legal name of the party who will be the contracting party and bound by any agreement with PacifiCorp.
• Primary contact name, phone number and email address
• Description of company
• Credit references
• Project references

2.Type of Proposed Agreement:

Identification of proposed underlying agreement

3.Proposal A and B Terms;

a.REC Quantity; per each Vintage Period, for Proposal A and Proposal B, if applicable.

b.REC Price; in $/REC, per Vintage Period

4.Any Special Conditions:

Any conditions precedent to a proposal or any deviations from REC RFP TERMS as stated above should be described in this section, if applicable.

COMPANY RESERVATION OF RIGHTS AND DISCLAMERS:

The Company reserves the right, without qualification and in its sole discretion, to reject any or all proposals, and to terminate this RFP in whole or in part at any time. The Company further reserves the right without qualification and in its sole discretion to decline to enter into any agreement with any Bidder for any reason, including, but not limited to, change in regulations or regulatory requirements that impact the Company and/or any collusive bidding or other anti-competitive behavior or conduct. This RFP shall not be construed as preventing the Company from entering into any agreement that it deems appropriate at any time before, during, or after the RFP process is complete.

CONTINGENCIES:

These Proposed Terms/Conditions are for discussion purposes only and not an offer or commitment of PacifiCorp or any of its affiliates to enter into any transaction. The prices and terms are subject to change, and further review and approval, including terms proposed in PacifiCorp’s Pro Forma Renewable Energy Credit Purchase and Sale Agreement, until execution of a definitive agreement containing all appropriate provisions, including those related to dispute resolution, credit, and governing law. Neither party is obligated to enter into a transaction or definitive agreement with the other party and each party may cease discussions for any reason at any time. Counterparty shall not disclose the provisions of this document to any third party.

RFP - APPENDIX A

PACIFICORP’S PRO FORMA

RENEWABLE ENERGY CREDIT PURCHASE AND SALE AGREEMENT

THIS WORKING DRAFT DOES NOT CONSTITUTE A BINDING OFFER, SHALL NOT FORM THE BASIS FOR AN AGREEMENT BY ESTOPPEL OR OTHERWISE, AND IS CONDITIONED UPON EACH PARTY’S RECEIPT OF ALL REQUIRED MANAGEMENT APPROVALS (INCLUDING FINAL CREDIT AND LEGAL APPROVAL) AND ALL REGULATORY APPROVALS. ANY ACTIONS TAKEN BY A PARTY IN RELIANCE ON THE TERMS SET FORTH IN THIS WORKING DRAFT OR ON STATEMENTS MADE DURING NEGOTIATIONS PURSUANT TO THIS WORKING DRAFT SHALL BE AT THAT PARTY’S OWN RISK. UNTIL THIS AGREEMENT IS NEGOTIATED, APPROVED BY MANAGEMENT, EXECUTED, DELIVERED AND APPROVED BY ALL REQUIRED REGULATORY BODIES, NO PARTY SHALL HAVE ANY OTHER LEGAL OBLIGATIONS, EXPRESSED OR IMPLIED, OR ARISING IN ANY OTHER MANNER UNDER THIS WORKING DRAFT OR IN THE COURSE OF NEGOTIATIONS.

RENEWABLE ENERGY CREDIT PURCHASE AND SALE AGREEMENT

Between

PacifiCorp, acting in its merchant function capacity

(“PacifiCorp”)

and

______

(“Seller”)

RENEWABLE ENERGY CREDIT

PURCHASE AND SALE AGREEMENT

This Renewable Energy Credit Purchase and Sale Agreement (this “Agreement”), together with the appendices and any other attachments referenced herein, is made and entered into this __ day of _____, 201_ (the “Execution Date”), by and between PacifiCorp, an Oregon corporation acting in its merchant function capacity (“PacifiCorp” or “Buyer”), and ____ (“Seller”). PacifiCorp and Seller hereby agree to the following:

ARTICLE ONE: DEFINITIONS

1.1“Affiliate” means, with respect to any entity, each entity that directly or indirectly controls, is controlled by, or is under common control with, such designated entity, with “control” meaning the possession, directly or indirectly, of the power to direct management and policies, whether through the ownership of voting securities or by contract or otherwise. Notwithstanding the foregoing, with respect to PacifiCorp, Affiliate shall only include MidAmerican Energy Holdings Company and its direct, wholly owned subsidiaries.

1.2“Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it and such case filed against it is not dismissed in ninety (90) days, (b) makes an assignment or any general arrangement for the benefit of creditors, (c) otherwise becomes bankrupt or insolvent (however evidenced), (d) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (e) is generally unable to pay its debts as they fall due.

1.3“Business Day” means any day on which banks in Portland, Oregon are not authorized or required by Law to be closed, beginning at 6:00 a.m. and ending at 5:00 p.m. local time in Oregon.

1.4“CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.

1.5“California Renewables Portfolio Standard” means the renewable energy program and policies established by California State Senate Bills 1038 and 1078 as amended by Senate Bill SB1X, and codified in California Public Utilities Code Sections 399.11 through 399.31 and California Public Resources Code Sections 25740 through 25751, as such provisions are amended or supplemented from time to time.

1.6“CAMD” means the Clean Air Markets Division of the Environmental Protection Agency or successor administrator, or any state or federal entity given jurisdiction over a program involving transferability of Green Tags.

1.7“CEC” means the California Energy Commission or any successor agency.

1.8“CEC Certification and Verification” means that the CEC has certified that the Project is an ERR and eligible for purposes of the California Renewables Portfolio Standard and that all energy produced by the Project qualifies as generation from an ERR, and such certification is effective, for purposes of compliance with the California Renewables Portfolio Standard.

1.9“CEC Eligibility Guidelines” means the guidebook issued by the CEC on Renewables Portfolio Standard Eligibility, as may be amended or modified from time to time, or such successor document issued by the CEC to establish the eligibility of a generating facility to produce RECs for the purpose of compliance with the California Renewables Portfolio Standard.

1.10“Conditions Precedent” is defined in Section 6.1.

1.11“Contract Price” means the price in U.S. Dollars ($U.S.) to be paid by PacifiCorp to Seller for the purchase of the Product, as specified in Section 2.4(a).