Q&A from the Renewable Mailbox

  1. We would like the opportunity to bid, but were unaware of the now expired deadline to submit our intent. Is it OK for us to proceed witha submission by the August 24 deadline?(07-22-09)

Yes. Even though you have not yet submitted a Notice of Intent to bid, you may still submit an offer package on August 24.

  1. Can you explain the Locational Marginal Pricing multipliers in more detail? For example, how will the LMP take into account the projects located in the Midway cluster as opposed to the Newark Cluster and how much will that weigh on valuation?(07-23-09)

Location Marginal Pricing accounts for location-specific differences in the value of electrical energy, due to congestion. For each location, there is an LMP multiplier for each TOD period. Since the multiplier is applied to the energy benefit, it can have a significant impact on the market value. Specific values of the multipliers are proprietary.

  1. Please alert me when the information for the pre-bidder conference attendees on July 21, 2009 is available. (07-27-09)

The attendance list has been posted to PG&E’s website at

  1. Can you clarify that the final phase of the project development security is $100/kW multiplied by the greater of either the capacity factor or 0.5? When reading this detail in two different pieces of your guidance we found the wording was somewhat contradictory. On pg. 22 of the Solicitation it says: "$100/kW multiplied by the greater of either: (i) the capacity factor; or (ii) 0.5." While in the PPA (pg. 53 Section 84.a(ii) ) it states "...as adjusted by the anticipated capacity factor of the project as reflected in Seller's offer, as long as the Capacity Factor is greater than or equal to 50% for As-Available offers." The PPA does not advise what to do if the capacity factor is less than 50%. (07-30-09)

The final phase of the project development security is $100/kW * greater of either (1) the capacity factor or (2) 0.5 for all products excluding dispatchable. If the capacity factor is less than50% then we apply 50%.

  1. The attachment D is not working properly. (07-31-09)

We have updated and reposted the Attachment D form. Please use the version dated 07-31-09 from PG&E’s website.

  1. Is the GEPperformance measurement and cure done a rolling 2 y period? (08-03-09)

The measurements for GEP performance is done by contract year and not a rolling average each month. For intermittent, non wind, it is done over 2 consecutive contract years and for the others it is done each contract year.

So do you sum yrs 1 and 2 and look to yr 3 for a cure if a deficiency exists?Do you then look at years 3 and 4 and cure in year 5 if a deficiency exists?

Yes, if there is a deficiency in years 1 and 2, combined, then the seller can cure the deficiency in year 3 with generation at 90% of contract quantity. If generation is less than 90% of contract quantity at the end of the year then the deficit from year 1 and 2 will need to be cured with a payment.

Example: Assume contract quantity = 100 gwh/year and GEP = 160% of contract quantity as measured over 2 years

Example 1: Actual generation:

Year 1 80 gwh

Year 2 75 gwh

Year 3 88 gwh

Year 4 80

GEP for Year 1 and 2 = 160 gwh. Actual generation = 155 gwh. Deficit = 5 gwh. Generation in year 3 needs to be 90 gwh in order to cure deficit from year 1 and 2. At the end of year 3, seller would pay liquidated damages on the 5 gwh shortfall for year 1 and 2. The next performance measurement period would be year 3 and 4, where generation exceeds GEP.

Example 2:

Year 1 80 gwh

Year 2 80 gwh

Year 3 88 gwh

Year 4 80

Generation in years 1 and 2 meets GEP. Next measurement would take place at the end of year 3, period would be year 2 and 3.

  1. Please provide a numerical example for the case of annual production > 120% and how the 75% payment adjustment is applied. (08-03-09)

Assume contract quantity is 100 gwh/year and contract price is $80/MWH. Assume total generation from project is 130 gwh/year. For the first 120 gwh, year, payment in each hourwill equal the mw generated in that hour multiplied by the contract price of $80/mwh multiplied by the TOD factor.Once annual generation reaches 120 gwh, payment for generation in that hour will equal the mw generated in that hour multiplied by the contract price of $80/mwh, multiplied by the TOD factor multiplied by 75%.

  1. Please explain the Pnode in more detail. (08-03-09)

The Pnode (pricing node) is assigned by the CAISO. It is the point of interconnection of a facility where energy is made available to the CAISO and for which Locational Marginal Price is calculated.

  1. Must App V be filled in with proposal? (08-03-09)

Appendix V should be filled out with the Offer. The annual quantities in Appendix V should match the quantities in the spreadsheet (Attachment D).

  1. I’m preparing my company’s Submission of Offer and wanted to confirm which files are due on August 24. With regard to the project description, site control, milestone schedule, transmission/interconnection, experience & qualifications, and supplemental CEC funding, is there a particular format I should use? (08-04-09)

For your Offer submittal please include the following files on August 24:

Tab 1:Signed RPS Solicitation Protocol Agreement (Attachment A)

Tab 2:Fully Completed Offer Form (Attachment D)

Tab 3:Form of PPA (Attachment H or N)

Buyout Offers must include a fully completed term sheet (Attachment I) in addition to PPA

Ownership Offers must include a completed term sheet (Attachment J) instead of a PPA

Form of PPA (Attachment H or N)

Tab 4:Written Project Descriptionof the existing or proposed project (see page 26 of the 2009 Solicitation Protocol- issued June 29, 2009 for complete contents of the description)

Tab 5:Site Control:Description of the project site specific enough to confirm the project location. For all of the specifics see page 29 of the 2009 Solicitation Protocol.

Tab 6:Project Milestone: Project schedule describing the financing, permitting, EPC, interconnection, startup, timelines and status of the major activities for all aspects of the project.

Tab 7:Transmission and Interconnection: See page 29 of the Protocol document as well as Section X beginning on page 33.

Tab 8:Experience and Qualifications:

Tab 9:Supplemental CEC funding: If you are planning on or expected to be receivingany CEC funding just indicate it behindthis tab. If you have any New Renewable Resource Account funds please provide a status report of those funds.

Tab 10:FERC Order 717 Waiver (Attachment F)

Please provide the documents in either Microsoft Word or Excel as applicable.

  1. Tab 3: PPA and Term Sheet that is due on August 24 - does that include all of the Appendixes that are part of Attachment H? (08-04-09)

Please include in your offer all of the appendices in Attachment H with your Offer on August 24.

  1. We expect to submit 6 pricing structures for a single project under the PPA Offer type. The pricing will depend on tax treatment (in our case, either the 10% ITC or the 30% development grant) and three different turbine types. Can you confirm that we need to fill out the D-1, D-2 and D-3 forms for each of the 6 structures? Additionally, can you confirm that the column labeled "Contract Price without PTC or federal incentive" in Attachment D-2 is to be filled out 6 times? (08-05-09)

That is correct, for each offer variation or you will need to submit a separate Attachment D. Variations using different technologies, including different turbine types might receive different project viability scores. Please be as specific as possible when describing variations on the same project.

  1. Pursuant to the instruction in Tab 7a., p. 29 of the Solicitation Protocol, are we still required to use the information in the Transmission Costs Ranking Report, Figure X and Table X.1, if we have already received our Phase 1 study results from the CAISO ? We would propose to file with you the results of our Phase 1 study. Please advise if this is acceptable. (08-05-09)

We will apply a transmission cost estimate to your offer Based on the TRCR. If you have project specific information from a CAISO Phase 1 Study that will be considered. Please include with your offer package.

  1. We would like to determine if your definition for gen-tie costs and the CAISO's definition of "Interconnection Facilities" CAISO are the same thing. On p.34 Sec. X A you define gen-tie costs as "all the facilities needed to interconnect the renewable energy generation facility to the first point of interconnection with the transmission system grid." CAISO has provided the project an estimate of "Interconnection Facilities", defined as "The transmission facilities necessary to physically and electrically interconnect the Project to the CAISO Controlled Grid at the point of interconnection. Please comment on whether these are the same thing or not. (08-05-09)

These are the same thing.

  1. On Attachment D-2 there are major headings labeled Baseload and Peaking but it appears there is no other sheet for as available power. One reads "Baseload and Peaking TOD Performance Requirements" and the other reads "Baseload and Peaking Performance Adjustment Factors" Should "As Available" applicants still be filling these out, or is there a separate form somewhere else that needs to be attended to? (08-05-09)

The "As Available" participants should complete the Attachment D2 as well. You will need to enter the first year of the contract start date. The remaining contract years will populate based on the information that you previously provided on Attachment D-1 (radio button under Delivery Term). Please complete the rest of the columns in D-2.

  1. On the right hand side of the Energy Production Profile, (Attachment D-3 to the Solicitation Protocol) there are several column headings with nothing below them (Expected Revenue, Total MWh, Max MWh, Average Capacity Factor). Are we supposed to fill these out or are they for PG&E's purposes only? (08-05-09)

Once the generation profile has been completed for each month, press the "expected revenue" button. The area that you are referring to will calculate the expected revenue for each month and will populate that area based of off the generation profile that you entered.

  1. We understand from the bidder conference that PG&E is the scheduling co-ordinator for all projects. Please provide the logic as to why PG&E is the SC and under what circumstances the bidder would be the SC. (08-05-09)

PG&E is only the SC for projects located within the CAISO control area. The bidder would be the SC for other, primarily out-of-state projects.

  1. Does our bid price need to include the estimated transmission and integration cost adders? We would own and operate facility and offer buy out option to PG&E. (08-05-09)

Transmission interconnectioncosts are paid by the generator and should be included in your bid. Transmission systemupgrade costs, which are estimated by the TRCR "adders", are paid by transmission ratepayers, and do not need to be included in your bid.PG&E will assign each Offer an estimated amount of transmission network upgrade cost, if applicable, based on the specified delivery point during PG&E's evaluation process. To increase the value of your Offer, you may propose a certain level of curtailablity to your generation profile. See page 36 of the 2009 Solicitation Protocol book for more specifics.

  1. Is a price escalator acceptable? (08-05-09)

Yes a price escalator is acceptable, as long as it allows PG&E to know the full price of your offer for every year of the contract at bid evaluation time.As an example, you may propose an offer that is priced at $90/mwh in year 1, plus 1% escalation.An offer priced at $90/mwh plus CPI, would not provide the same price certainty over the delivery term.

  1. Since we will be bidding for projects under 20 MW, would we score higher if we had initiated the Small Generation Interconnection process? Or do we just state that we will be going through the SGIP? (08-05-09)

For the modified CPUC calculator (see Attachment K). You will get the same viability score as long as you can interconnect using the SGIP process. You do not need to have submitted your SGIP application. This is different than if you were going through theLarge Generator InterconnectionProcess (LGIP). In that caseyou would get a higher viabilityscore if you had initiated the CAISO process.

For the PG&E test calculator, your score will depend on how much time is required to upgrade. If your application has been submitted and access is available, you will get the highest score (see Attachment K).

  1. If a project connects to the distribution system, would it satisfy the requirement to connect to a nodal delivery point assigned by CAISO?(08-05-09)

Yes, the CAISO will assign a pnode to your project if it is connected at distribution level.

  1. How would such a project be able to satisfy the Generation Tracking and Verification System requirement in the CEC RPS Eligibility Guidebook? (08-05-09)

Projects at distribution and transmission level may participate in WREGIS. Renewable Energy Credits will be accounted for in WREGIS based on CAISO meter data.

  1. How does PG&E rank the value of projects connected to the distribution grid compared to the transmission grid? (08-05-09)

PG&E does not give any preference to distribution or transmission projects per se.PG&E assesses each project individually, and considers the value/cost of the energy produced, and theviability of the project. To the extent a distribution level projectmay connect to the grid earlier, with less uncertainty, it may get a higher viability score than a transmission level project.

  1. On the revenue calculator there is a column that asks for the P-95 value. Could you clarify what this means? (08-06-09)

The P-95 valuemeans the amount of energy that is expected to be generated 95% of the time on an annual basis. This applies only for wind projects, and accounts for the fact that wind generation may vary annually due to differences in wind conditions.

The Guaranteed Energy Production for geothermal projects is 90% of contract quantity.

  1. Is there a document that explains the procedure for interconnection process? (08-06-09)

PG&E does have a website for the interconnection process procedures located below:

  1. Does PG&E need the city to grant a lease or do they just need lease options? (08-06-09)

Site control does not need to be demonstrated in the offer. However, site control will be required prior to PPA execution. A lease option is sufficient if it demonstrates the seller can obtain site control at sellers’ option.

  1. Terminology Question: is a substation for renewable energy such as Stag or Tesla the same as PNode. (08-06-09)

A substation and pnode is not the same thing. A pnode is the point of interconnection of a facility where energy is made available to the CAISO and for which Locational Marginal Price is calculated. Substations are major assemblages of equipment that switches, change or regulate voltage in the electric transmission and distribution system.

  1. See pg 8 of the ppa presentation of Aug 3. Is (b) the SUM of the Pnode price AND $50? (08-07-09)

Yes

  1. With regard to the PG&E renewable RFP, there are several instances inside the PPA where it indicates the specific section would need to be revised for “Short Term Offers Outside California” as in the case ofthe defined term Delivery Point. The project we are looking to bid in as part of the RFP is outside the state of California but we would be looking to execute a long-term 15 or 20 year PPA. Is there any reason why this subset of bidders is not referred to within the PPA? (08-07-09)

PG&E does not have proforma language in its PPAs for LT offers outside the CAISO. You should mark-up the PPA to reflect the specifics of your project and proposed terms of delivery. You may use the alternate provisions in Attachment N if applicable.