Full Capacity Deliverability Assessment and Interconnection Questions

May 16, 2012

Bidders’ Conference 1:30 – 3:00

Full Capacity Deliverability Assessment and Interconnection questions

1.  Where do you have to be in the interconnection process?

You must have completed at least a Phase I study, System Impact Study, or have passed the Fast Track screens to submit an offer into the RFO.

A fully deliverable project offer must have gone through the Cluster 4 One-Time Deliverability Assessment process, have a Phase 1 deliverability study report at the time of offer submittal, and continue into Phase II of the interconnection process by posting the security deposit. The project must continue to maintain its full deliverability status by posting the required security deposits and executing the appropriate interconnection agreement if a Power Purchase Agreement is executed. If the project has withdrawn from the study process and has not posted a security deposit, the project will be considered as an energy-only project for evaluation purposes.

2.  What kind of cost should be included in your bid?

The contract price should factor in all of the direct costs that are borne by you. With regard to interconnection and transmission costs, the Seller should consider the following.

·  Any direct assignment costs associated with interconnection that have been identified in your interconnection study and;

·  Any financing costs for network upgrades that are ultimately borne by ratepayers. The PPA price should reflect financing for the refundable costs associated with the reliability and delivery network upgrades that the project would incur while waiting for the refund from the Transmission Provider. We will take those refundable network upgrades and calculate a $/MWh cost and apply those as an adder to your bid cost when we rank you.

3.  Existing facilities may have full capacity deliverability status (FCDS) as of the Contract start date. It doesn’t seem fair to discount the RA value for those projects back to 2021.

If you are an existing resource and have a finding of existing FCDS we will give you RA value in the ranking process for the delivery term. If you are a new resource, we are going to assume that that all transmission upgrades for full capacity deliverability status are completed by December 31, 2021.

1. Will contract pricing change when the project becomes fully deliverable?

No. Your offer should include a single contract price that may escalate each year. The only thing that will change when you become fully deliverable is the TOD factor. You will get the benefit for a peaking resource of the higher TOD factors when you become fully deliverable.

5.  Why are the old factors applying to fully deliverable resources and not to energy only resources?

The first RAM solicitation was for energy only resources. But, the TOD factors have previously included capacity value in them. When you compare the summer peak multipliers for fully deliverable and energy-only projects, the fully deliverable TOD factor is significantly higher than the energy-only TOD factor. The distinction reflects the fact we had a high capacity value in the summer peak. We now distinguish between energy only and full deliverable projects. Going forward, you may see different sets of TOD factors that provide capacity value versus those that do not in other RFOs as well.

6.  Is term full capacity and deliverability defined in the CAISO tariff?

Yes. The term “Full Capacity Deliverability Status” is defined in Appendix A (Definitions) of the CAISO Tariff as:

The condition whereby a Large Generating Facility interconnected with the CAISO Controlled Grid, under coincident CAISO Balancing Authority Area peak Demand and a variety of severely stressed system conditions, can deliver the Large Generating Facility’s full output to the aggregate of Load on the CAISO Controlled Grid, consistent with the CAISO’s Reliability Criteria and procedures and the CAISO On-Peak Deliverability Assessment.

7.  Would PG&E look at any information besides Phase I study?

If you have a Phase II or Interconnection Agreement we will look at that because it represents more refined information.

We will not consider third party studies that someone may have commissioned as part of the project development process. The Generator Interconnection Process identifies the studies that must be completed by the CAISO or the distribution provider so that is the information that we are going to rely on during the valuation process.

1. Does PG&E have a preference for projects with full capacity deliverability status versus energy only?

PG&E does not have a preference for FCDS or energy only projects. The cost to PG&E to receive energy from a fully deliverable resource is higher because of the higher peak TOD factors, and there are deliverability network upgrades associated with the fully deliverable project. PG&E will also receive the RA benefits from a fully deliverable project. Your project’s ranking will depend on how much RA value there is versus the incremental cost of the delivery network upgrades.

General Questions

9.  What was the highest and the lowest price completed in the 2011 RAM?

We aren’t releasing prices that we executed from the first RAM RFO. The CPUC calculated the average market clearing price from all three utilities’ executed contracts from the first RAM at $89/MWh pre-TOD.

10.  If we are bidding projects that we presented to PG&E in RAM1 – can we use the same site control attestation form?

Yes you may. However, if you are selected as the winning bidder, you will be required to provide more complete proof of site control prior to PPA execution.

11.  Can the contract capacity be different than the facility nameplate?

Yes, it can be lower than facility nameplate if you’re doing an excess sales transaction.

12.  If we plan to repower can our capacity be higher than the current nameplate?

Your contract capacity cannot be higher than the project’s nameplate capacity, but if you are planning to repower your project, your PPA contract capacity could be equal to your higher capacity after repowering. P If there network upgrades required to accommodate the increased capacity will consider those costs as well.

13.  Please clarify the concept of variations on bids. Can a bidder bid different capacity and different terms from the same site?

Yes. You can offer different capacities because we are interested in the flexibility that might allow us to work within the target MWs In each product category. We are also seeking variations for energy only versus full capacity deliverability. You can provide different prices for those different variations. We are not looking for variation in delivery term.

14.  Is the target to purchase is 14 MW for baseload resource and another 14 MW for intermittent non-peaking resource, or is it 14 MW altogether?

It is 14 MW for each of those product categories. The total is 14 MW intermittent off-peak + 14 MW baseload + 119 MW as-available on-peak = 147 MW.

15.  Can we allocate only a portion of a larger project’s output to this bid? If so, will there be a separate metering requirement?

No, the RAM Program is limited to projects no greater than 20 MW. Each project must be separately metered and electrically separate from any other project.

16.  Is it accurate to say that you will not accept prices that are PTC contingent? And the price is not subject to change if there is or is not a PTC post 2012?

Yes, the price may not be contingent on your ability to qualify for or obtain the federal PTC or ITC benefits. You take whatever risk is involved in terms of whether or not if there is PTC credit which allows you to meet that contract price.

17.  Is it accurate to say that you would contract up to a maximum of 34 MWs of wind with one project?

Maybe. We may contract up to 34 MW in total for wind. That is the 14 MW target plus/minus 20 MW as authorized by Resolution E-4414. We may apply a seller concentration criterion such that we don’t contract with anyone party for more than 20 MW.

18.  If I have an out-of-state biomass project, can I participate in RAM if I can prove that I’ve acquired the transmission path to COD interconnection point through BPA?

No. You have to be interconnected into the distribution or transmission system of PG&E, Southern California Edison or San Diego Gas & Electric.

19.  When referencing supplier diversity does this include the development company submitting bids?

Yes

20.  The normal delivery range for a run-of-river hydro project is 5,000 MWh – 15,000 MWH/year depending upon the annual rainfall. The permitted delivery range in the PPA does not cover this and since the PPA is not negotiable how should we bid this?

The form PPA requires you to specify a contract capacity, and to meet a guaranteed energy production (GEP) level of 140% of contract capacity over a two year period. This GEP was adopted by the CPUC in Decision 10-12-048. There is no way to reduce the GEP for small hydro absent CPUC approval of a modification to the form PPA.

21.  Is on line date of less than 24 months permitted for a presently operational project?

Yes, an online date of less than 24 months is permitted in the RAM RFO.