Offshore Wind Energy Procurement Bidders Conference
This document provides information on the offshore wind energy procurement bidders conference held on July 19, 2017. It outlines the objectives, RFP drafting process, team composition, and criteria for soliciting offers in compliance with Section 83C of the Green Communities Act in Massachusetts.
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Section 83C Offshore Wind Procurement Bidders Conference July 19, 2017 1
Todays Bidder Conference All requirements, criteria, processes, and all other aspects of this solicitation are governed solely by the document titled Request For Proposals For Long-Term Contracts For Offshore Wind Energy Projects, issued June 29, 2017. This Bidders Conference presentation and meeting are provided for discussion purposes only, and may not provide authoritative guidance regarding the solicitation. All answers provided at this forum are for information only. Official responses will be provided in writing to questions submitted by July 26, 2017 to MARFP83C@gmail.com Representatives at today s conference: Eversource Energy: Jeff Waltman National Grid: Tim Brennan Unitil: Jeffrey Pentz Massachusetts Department of Energy Resources: Judith Judson 2
How We Got Here Objective: Solicit offers of Offshore Wind Energy Generation pursuant to Section 83C of the Green Communities Act RFP Drafting Process Joint filing by Massachusetts Distribution Companies (Unitil, National Grid, Eversource Energy) and Massachusetts Department of Environmental Resources (DOER) Stakeholder input requested in March 2017 Attorney General consulted on solicitation method Independent Evaluator (Peregrine Energy) monitored and reported on solicitation process MA DPU Authorized RFP on June 21, 2017 RFP issued June 29, 2017
RFP Team Composition Evaluation Team Massachusetts Distribution Companies and the DOER Evaluation Team Consultant entity or entities that will contract with the Distribution Companies to assist the Evaluation Team with the technical methodologies and findings for eligible proposals Independent Evaluator as required by Section 83C, the independent evaluator will monitor and report on the solicitation and bid selection process to ensure an open, fair and transparent solicitation and bid selection process Selection Team Massachusetts Distribution Companies with DOER serving as an advisory participant: Eversource Energy, National Grid, Unitil 4
Offshore Wind Energy Generation In order to facilitate the financing of offshore wind energy generation resources in the commonwealth, not later than June 30, 2017, every distribution company shall jointly and competitively solicit proposals for offshore wind energy generation; and, provided, that reasonable proposals have been received, shall enter into cost-effective long-term contracts. [Section 83C] Offshore Wind Energy Generation means: Offshore electric generating resources derived from wind that: (1) are Class I renewable energy generating sources, as defined in section 11F of chapter 25A of the General Laws; (2) have a commercial operations date on or after January 1, 2018, that has been verified by the department of energy resources; and (3) operate in a designated wind energy area for which an initial federal lease was issued on a competitive basis after January 1, 2012. [Section 83C] 5
Solicitation Timetable The distribution companies may conduct 1 or more competitive solicitations through a staggered procurement schedule developed by the distribution companies and the department of energy resources; provided, that the schedule shall ensure that the distribution companies enter into cost-effective long-term contracts for offshore wind energy generation equal to approximately 1,600 megawatts of aggregate nameplate capacity not later than June 30, 2027; and provided further, that individual solicitations shall seek proposals for no less than 400 megawatts of aggregate nameplate capacity of offshore wind energy generation resources. [Section 83C] 6
Communication and Bid Submission All communications with the Evaluation Team must be submitted electronically to MARFP83C@gmail.com Section 1.7.3 Bidders must submit a public version of each proposal and a confidential version Sensitive material must be redacted from the public version by the bidder The required public version will be posted to the Massachusetts Clean Energy website, macleanenergy.com The Evaluation Team can accept no responsibility for sensitive material appearing in the public version this is strictly the responsibility of the bidder Copies of each version must be submitted by December 20, 2017 at Noon EPT to each of the entities identified in accordance with the instructions in the RFP Appendix H Bidders must submit the required non-refundable bid fee with each bid at the time of bid submission in accordance with the instructions in the RFP Appendix H 7
Bid Fee Example Bidders must submit the required non-refundable bid fee with each project at the time of bid submission in accordance with the instructions in the RFP Appendix H A project that offers in the required 2 bids as outlined in section 2.2.1.3.1 and 2.2.1.3.2 will be counted as one project, and only one bid fee is required Separate wire for each utility is required per instruction in RFP Appendix H The fee for one pricing offer is calculated as follows: Minimum bid fee $300,000 $25,000 for each additional pricing offer Changes to any physical aspect of the project (project size, production/delivery profile, in-service date, delivery location), requires an additional fee of $50,000 Bid Fee Example: 400 MW facility bids 2 pricing offers and one additional interconnection point: $300,000 + $25,000 + $50,000 = $375,000 8
Bid Completion Bids and Bid Forms must be complete in every aspect to fully describe their proposal(s) and enable a thorough review A redlined version of each of the applicable draft contract in a form that the bidder would be willing to sign must accompany each bid Both bid forms, Excel and Word form, must be filled out and every question answered in each of those bid forms Completion of transmission agreement in accordance with Appendix C-3 9
Eligible Proposal Size The Distribution Companies are seeking to procure a total of approximately 400MW of Offshore Wind Energy Generation1. Bidders are required to submit at least one proposal of 400MW Alternative proposals can have a nameplate capacity of no less than 200MW and no greater than 800MW Proposals up to 800MW will be considered if the Evaluation Team determines: A larger-scaled proposal is both superior, and Is likely to produce significantly more economic net benefits to ratepayers All proposals must provide for a scheduled commercial operation date before January 1, 2027. Bidders are encouraged to submit proposals with Offshore Wind Energy Generation delivery as early as reasonably possible 1 Bidders may propose minor variations in proposed bid/contract sizes based on expected turbine size and potential changes to expected turbine size 10
Bid Categories 2.2.1.3.1 Offshore Wind Energy Generation with a Project Specific Generator Lead Line Proposal 2.2.1.3.2 Offshore Wind Energy Generation with an Expandable Transmission Proposal under a FERC Tariff For each Offshore Wind Energy Generation proposal size that a bidder submits, the bidder must submit a proposal that: (a) conforms to subsection 2.2.1.3.1 of the RFP and a separate proposal that (b) conforms to subsection 2.2.1.3.2 11 1 Pursuant to Section 83D, Clean Energy Generation resources proposed may be paired with energy storage systems
Bid Category 2.2.1.3.1 Generator Lead Line Proposal Delivery facilities comprising generator lead line(s) and all associated facilities required for delivery from the Offshore Wind Energy Generator directly to the corresponding onshore ISO-NE PTF system facilities. Bidders may consider more than one point of on-shore interconnection Payment options: (1) All-in price schedule for Offshore Wind Energy Generation and/or associated RECs that includes the cost of such delivery facilities via PPA (2) Separately from the generation and/or RECs pricing, through a FERC-accepted OATT, Rate Schedule, or Tariff and Service Agreement with terms consistent with those detailed in the applicable provisions of Attachment C-3 Bidder must include information requested in 2.2.1.3.1 12
Bid Category 2.2.1.3.2 Expandable Transmission Proposal In addition to 2.2.1.3.1, each proposal to sell Offshore Wind Energy Generation and/or associated RECs must also include a proposal for nondiscriminatory access to Offshore Delivery Facilities that are part of an expandable transmission network, to be designed and constructed by the Offshore Wind Energy Generation bidder, either alone, in combination with other bidders, or in partnership with a third-party developer, to deliver Offshore Wind Energy Generation to the corresponding onshore ISO-NE PTF system facilities. The Expandable Transmission Bid must satisfy the following requirements set forth in section 2.2.1.3.2. including: Expandable to 1600 MW of aggregate nameplate capacity Available to be expanded to accommodate future interconnection requests of all potential future bidders Should mitigate overall costs and maximize total benefits Must propose an OATT, Rate Schedule, or Tariff with terms consistent with those detailed in Attachment C 13 Full list in 2.2.1.3.2
Overview of Process Stage 1 Proposals will be reviewed to ensure that they meet eligibility and threshold requirements Stage 2 Proposals will be evaluated based on specified quantitative and qualitative criteria Stage 3 Further evaluation of remaining proposals to ensure selection of proposal(s) which provide the greatest impact and value Evaluation Team reserves the right, at any stage, to disqualify and eliminate from further consideration any proposal that it reasonably believes does not meet the requirements 14
Bid Evaluation Stage 1 Each proposal will be subject to Stage 1 evaluation for eligibility criteria (more fully described in Section 2.2.1 of the RFP), including but not limited to: Eligibility Eligible bidder Eligible proposal size Bidder disclosure of affiliations and affiliate relationships Interconnection and delivery requirements Minimum contract size Term length Capacity requirements Etc. 15
Bid Evaluation Stage 1 (cont.) Each proposal will also be subject to Stage 1 evaluation for threshold criteria (more fully described in Section 2.2.2 of the RFP), including but not limited to: Site control bidder must demonstrate that it has a federal lease issued on a competitive basis after January 1, 2012 for an Offshore Wind Energy Generation site that is located on the Outer Continental Shelf and for which no turbine is located within 10 miles of any inhabited area Technical and logistical viability, ability to finance proposed project Providing enhanced electric reliability within the Commonwealth Contribution to reducing winter electricity price spikes Avoid line loss and mitigating transmission costs to the extent possible and ensuring that transmission cost overruns, if any, are not borne by ratepayers Contribution to employment; economic development benefits Etc. 16
Bid Evaluation Stage 2 Proposals that pass Stage 1 will move to Stage 2 Stage 2 evaluation includes quantitative and qualitative analysis (more fully described in Section 2.3) A screening process to compare the economic competitiveness of each bid If the consensus view of the Evaluation Team is that a bid is not economically competitive it will be removed from consideration Bids will then be evaluated for the direct contract costs & benefits, as well as other costs & benefits to retail consumers (this portion of the evaluation is worth a maximum of 75 points out of a possible total score of 100 points) Mark-to-market comparison of the price of proposal to projected market prices of Energy and/or RECs Cost of transmission and expected benefits of revenue from sales of excess transmission capacity Additional economic and environmental costs and benefits (more fully described in Section 2.3.1.2) 17
Bid Evaluation Stage 2 The qualitative portion of the evaluation is worth 25 points out of a total possible score of 100 points Criteria includes but is not limited to: Siting, permitting, and project schedule Reliability Benefits Benefits, costs, and contract risk Environmental impacts from siting Economic benefits to the Commonwealth See Section 2.3.2 for full description 18
Bid Evaluation Stage 3 Purpose of Stage 3 is to select proposal(s) that provide the greatest impact and value consistent with stated objectives The Evaluation Team will evaluate the remaining proposals based on the Stage 2 evaluation criteria and, at their discretion, the following additional factors: Portfolio effect Impact of proposals on the Commonwealth's policy goals Risk associated with project viability Ratepayer bill impacts Any risks to ratepayers that may be associated with projects proposing to recover Offshore Delivery Facilities costs through rates not fully captured in Stage 2 evaluation Etc. More fully described in Section 2.4 19
Contracting Bidders will be notified whether they have been selected to negotiate a PPA and/or transmission agreement; such selection does not guarantee that a contract will be awarded to bidder Selected Bidders will enter into separate contracts with each EDC if the negotiations are successful Bidders are responsible for satisfying all local, state and federal requirements, and making all necessary filings and submissions to obtain all approvals for their projects Each bidder will be responsible for posting 50 percent of their development period security with the EDCs at contract execution and the remaining 50% upon regulatory approval Any FERC-jurisdictional Rate Schedule or Tariff and Service Agreement agreed upon will be filed with FERC under Section 205 of the Federal Power Act 20
Schedule Event Event Issue RFP Bidders Conference Deadline for Submission of Questions Submit Notice of Intent to Bid Due Date for Submission of Proposals Selection of Projects for Negotiation Negotiate and Execute Long Term Contracts Submit Long Term Contracts for DPU Approval Date(s) Date(s) June 29, 2017 July 19, 2017 July 26, 2017 July 26, 2017 December 20, 2017 April 23, 2018 July 2, 2018 July 31, 2018 21
Todays Q&A Protocol All answers provided at this forum are for information only Official responses will be provided in writing to questions submitted to MARFP83C@gmail.com When called on please announce your name and the entity you represent Panelists will attempt to answer questions but may call on other members of the team to assist 22
