April 30, 2008
Q&A from the 2008 All Source RFO Mailbox
1)Will PG&E consider an accelerated approval schedule for resources that can come on line earlier than the RFO specified dates?
PG&E encourages bidders to offer projects with much earlier on-line dates. PG&E may give a preference to resources that could come on-line earlier, and may consider a faster track approval process assuming contract terms and conditions are agreed upon.
2)Will resources near load centers be considered of greater value in the evaluation process?
Yes. Proposals with resources near load centers will have higher location-specific value elements (such as Local Resource Adequacy). PG&E's evaluation process will incorporate a preference for such resources.
3)Inconnecting to CGT,does missing the deadline resultin participant disqualification? Or does it mean that if the participant does not meet the deadline he runs the risk of not receiving adequate or timely responsefrom PG&E regarding gas service?
If you require a PG&E gas study to be included in your offer, the completed application package must be received by PG&E Gas Transmission and Distribution by Monday, April 28. If you are unable to provide the completed application by April 28, it may impact your place in the engineering queue. PG&E will attempt to respond by June 27, but if PG&E has resource constraints our response may be later than the target date. Please contact Mike O'Brien () if you have questions.
4)Also, if connecting outside of CGT does the same deadline ("...comparable initiation...") apply or is the focus on the acquisition by the participant of comparable information?
Participants connecting outside of CGT have similar requirements and should still submit information so that PG&E can see that required data is available.
5)Is the June 27 deadline for PG&E? What information will PG&E be prepared to supply to the participant at this time?
June 27 is the "target" date PG&E has to respond to the request for an Expedited Preliminary Application for Gas Service. The study typically provides information on the following:
- Gas service extension requirements
- Gas system reinforcement requirements
- Size of pipe for a standard facilities design at prevailing service delivery pressure
- Size of pipe for a special facilities design at elevated service delivery pressure, if available
- Map of pipeline route(s)
- Estimated costs for the Participant for both standard and special facilities designs
- Meter set type, size and costs
- Backbone and Local Transmission service connections, if applicable
- PG&E will also be available to answer specific questions you may have on these connections.
6)If the participant Offers the tolling PPA and connects to CGT, is it correct to assume that PG&E will provide (deliver) its own fuel to the participant's meter location AND that the participant's sole responsibility regarding gas service are interconnection, metering and lateral line costs?
Yes. PG&E will provide fuel to the meter location in a tolling agreement structure.
7)Please restate and elaborate on what component(s)can be indexed.
Participants may use the GDP Implicit Price Deflatoras an Index for pricing. Participants determine which components and which proportion of eachcomponent the Index applies. Participants may submit a fixed or index price as a variation of a single offer.
8)Please elaborate on Fired Hour Charge.
Participants may elect as part oftheir offer tohave a dollar per operating (fired) hour charge as a pricing component oftheir offer.
9)Participants offering a gas-fired facility are required to initiate a study for firm physical delivery of generation. Please explain what "study"you refer to. Also, please elaborate on when the study is to be initiated/completed and what information is requested to be included in the offer.What does the word "...must initiate..." mean in terms of qualification/disqualification?
For generation projects connecting directly to the CAISO, CAISO Interconnection Applications are not required at the time of Offer submittal. However if the CAISO application process has been initiated and CAISO transmission studies are available, those should be included with the Offer submittal.
For gas-fired generation projects within NP15 (or QFs within NP15 or ZP26) and the CAISO control areabut not connecting directly to the CAISO,a request for firm transmission service from the Interconnection Point to the CAISO must be initiated.All transmission studies performed by the entity providing such transmission service from the project to the CAISO controlled grid need to be included in the Offer.
10)Please elaborate on the intent of PG&E regarding the energy auction and any implications on the participant's PPA and pricing under the PPA?
PG&E has not decided whether to submit any resulting contracts to the energy auction. PG&E will make this decision when it submits the winning Offers to the CPUC for approval. The energy auction determination should not impact a Participant’s PPA proposal or pricing.
11)Please describe how a project which has not yet undergone the CEC permitting process will be evaluated?
The further a Project has progressed towards final permits will improve its scoring relative to other Projects for the Project Viability criteria.
12)Under the Environmental Leadership criteria, how will PG&E evaluate cumulative impacts from a project that has not yet modeled its pollutant profile?
The other potential major air emission sources within the general area of the proposed project will be factored into the cumulative impacts evaluation.
13)Please explain if "5 variations" include the base offer under the single deposit or is it base offer AND 5 variations of the base?
Under a single Offer Deposit, a participant can provide up to five (5) variations in total:
- For a PSA, the Participant cansubmit two(2) variations undera single Offer Deposit whichcan onlyvary in price.
- For a PPA, the Participant cansubmit three (3) variations undera single Offer Deposit whichcan onlyvary in price and term.
- If a Participant is to provide both a PSA and PPA, they can therefore have up to five (5) variations under a single Offer Deposit.
14)Are you speaking of two separate Letters of Credit? I can find only one instance of the combination of the words "delivery date" and "letter of credit".
Participants need to only provide a single Letter of Credit for each offer.
15)What is (PPT)?
Pacific Prevailing Time.
16)Where can the PG&E Interconnection Handbook (PIH) be found?
The PIHcan be found at
17)Please elaborate on what might occur if the April 28 deadline for initiating gas interconnection studies is missed.
If the Participant does not have a completed application into PG&E by April 28, when the offer is received it will be placed in the back of the engineering queue. For additional information see the response to Question 3 above.
18)You refer to the "...detailed, proposed meter set location." With emphasis on "proposed", please elaborate on the potential ramifications to the participant if the meter set location were to change during the project's development cycle.
If the meter set location changes on the same property, the impact to the study will likely be minimal. If the site location changes where it impacts the initial study, PG&E reserves the right to treat the subsequent study as a "new" study, and the Participant will go to the back of the engineering queue. For additional information see response to Question 3 and the response to Question 16.
19)Please explain the meaning of “Performance Assurance” in the Protocol.
Performance Assurance would encompass the entire collateral package to assure the resource would be available and operate as required under the executed contract.
20)How is the participant ensured of the confidentiality of its offer details between offer submission and execution of the Agreement?
Confidentialityprior to short-listingis covered inSection XII of the solicitation protocol.
21)Do the entire technical specification (N1/N2) need to be returned and marked up?
The participant can make a blanket statement that all conditions are met and then identify those specifications that cannot be met along with a rationale for why the specification cannot be satisfied.
22)Is the gas study required?
Yes, for gas-fired resources A completed Gas Interconnection Information Form, a copy of the completed Application (Appendix M1), acompleted Agreement to Perform Tariff Scheduled Related Work (Appendix M2) and a copy of the study results must be included in any Offer.
23)Does the project have to have a completed transmission study?
A completed Electric Transmission Data Information Form (Appendix L) must be included in any Offer. The transmission study does not have to be completed, however the project will be required to be in the queue after shortlisting and the more information available the better the project can be evaluated.
24)Is 10 minute quick start a requirement?
No. Ten minute quick start is not a requirement, but will be factored into the evaluation of Offers.
25)Does pumped storage qualify under this All Source Long-term RFO?
New pumped storage generation would be eligible to participate in this RFO.
26)Will PG&E consider dispatchable demand response resources under this RFO?
Demand response resources are not eligible to participate in this RFO. However, PG&E plans to file an application at the California Public Utilities Commission within the next few months, proposing a separate RFO for new demand response resources.
27)In the Project Description, Appendix J, questions 1a and b, could be interpreted to mean that the participants have to have their equipment purchases finalized and have to have applied for and received Project Certification and are ready for construction. In my specific case I had planned to enter the LTRFO but would undertake major expense after being notified of Project shortlisting.How will my project be adversely affected with this approach?
In terms of Market Valuation, your project would not be adversely affected with the approach you have in mind. However, a project which hasequipment purchased and/or permits in hand will score higher on the Project Viability metric. See pages 13 and 14 of the main issuance document for a description of these metrics.
28)In the event of Project shortlisting, I will do what I can to obtain historic emissions data and historic data for restart capability from a hot start. Why is all of the extraneous data necessary?
Participants are required to provide a detailed description of the generation facility. Appendix J provides a template of questions that should be addressed by the Participant in providing the detailed description. To the extent the Participant does not have the information requested or cannot provide it at this time, the Participant should indicate so in their completion of Appendix J. Technical feasibility is one of many factors considered in the evaluation.
29)What is the "Guaranteed" Commercial Availability Date? What type of guaranty is sought by PG&E?
The Guaranteed Commercial Availability Date is the date the Project shall be constructed, tested, completed and ready for transfer to PG&E. Seller will be subject to Liquidated Damages and/or Purchase Price reductions for failure to achieve the Guaranteed Commercial Availability Date (or other Guaranteed obligations). The parameters for theseterms and obligationsareoutlined in the Term Sheet (Appendix G).
30)How should the project description index be addressed?
For Facility Ownership Offers, note the sections in the technical specifications (Appendices N1 or N2) and address whether the project is compliant or not. See also the response to Question 40.
31)We are interested in putting together an offer for capacity and energy for your All Source Long-term RFO. This offer would likely include a mix of a traditional generation asset with distributed behind-the-meter residential resources. We think it’s a compelling opportunity to operationally and financially merge traditional assets with exciting new distributed capacity and energy resources.
We’ve noticed in your RFO document a statement that no distributed resource with less than 10MW in a given location will be considered. We’re curious if resources such as those that would be deployed by us, a mix of load control, renewable integration, and battery storage, are covered under this because our unique utility control console makes all assets under management look like one distinct power plant.
The resources you describe abovewould not be eligible Offers in our All Source Long-term RFO. However, PG&E may be interested in evaluating such resources in other forums. We suggest you contact PG&E’s TechnologyInnovationCenter.
32)Using the example of Gregg Substation for peak and shoulder. Do levels reflect actual generation and/or planned generation or do they indicate how much new generation can be added and the associated costs?
The values in the "Maximum MW Potential Generation in each Level" column of the table (Transmission Proxy Costs – Appendix L1 (table 1) reflect hypothetical generation amounts and do not reflect any actual or planned generation amounts.
33)Using the example of Gregg Substation for Night. Is1000MW the maximum generation that can be added or is already interconnected? If actual, can more generation be added?
The 1,000MWlevel of generation shown in the table (Transmission Proxy Costs – Apendix L1 (table 1) would be potential new generation thatwould be evaluated using the transmission proxy costs from the table.
34)Assuming that Peak and Shoulder/Night represent peak/off peak times what would be the cost of upgrades for adding 500MW of base load generation or 400MW of peak load capacity to the Gregg Substation? Please explain your calculations.
Voltage Support Component - As noted in the text, the voltage support component is directly proportional to the potential resource capacity. (Note that this element is not location specific so that this adder from the table is the same irrespective of the location.) So, for generation capacity values that do not precisely line up with the levels in the table, the voltage support component can be directly calculated for the specific generator size by interpolating between the levels in the table.
New Generation at Gregg Substation
500MW Base Load
- Voltage Support Component = $33M
- Peak & Shoulder Proxy Costs = $ 7M (Size exceeds 450MW of level 2, so must include level 3 costs - so $0 from level 1, $4M fromlevel 2 and $3M from level 3)
- Night Proxy Costs = $0(voltage support is only counted once)
- Total Proxy Transmission Adder = $33 million + $7 million = $40 million
400MW Peaking
- Voltage Support Component = $26M
- Peak & Shoulder Proxy Costs = $ 4M (Size exceeds 0MW of level 1, so must include level2 costs - so $0 from level 1, and $4M fromlevel 2)
- Night Proxy Costs =N/A(since a peaking unit)
- Total Proxy Transmission Adder = $26 million + $4 million = $30 million
35)In which order would you rank Gregg, Tesla, Midway and Cottonwood Substations and what are your criteria?
We have not attempted to "rank" substations as the transmission impact at each station varies with generation project size and characteristic (peaking vs. baseload). Of the stations identified in the above list, note that Midway is not within NP-15.The delivery point for Participants in this All Source Long Term RFO must be within NP-15 (except for QFs, which may also deliver to ZP-26).
36)Section III of the RFO indicates that the minimum size considered under the RFO is 20MW per facility. What is the benchmark for the minimum size? Is it equal to the size of the facility (gross MW) or the net MW (after internal load requirements) provided to the grid?
Minimum offer sizes are 25MW, except for QFs which have a minimum offer size of 20MW. The minimum size is equal to the new MW, after internal load requirements, provided to the grid.
37)Will PG&E consider market based products, i.e., day-ahead call options at a fixed heat rate, under this solicitation?
Yes, as long as the products are tied to specific, new resources. However, flexibility and dispatchability of the asset are key evaluation components such that an option product of energy may not rate as well when compared to those Offers with complete dispatchability.
38)Will PG&E only accept responses that are from actual generation? For instance, would PG&E accept a proposal that was structured similarly to a generation asset, but was not sourced from a specific asset or portfolio of assets?
PG&E will only accept Offers from specific, newgeneration facilities and specific, existing Qualifying Facility generation.
39)Will PG&E require 100% of facility's output be offered into RFO? For example, if PG&E controls dispatch of 100% the entire plant but only 80% of MW are under contract to PG&E (other 20% under contract to another party), would this be a qualifying offer?
PG&E will not accept Offers for partial units in this RFO, except for distributed generation or QFs serving on-site customer use.
40)In reviewing the RFO documents, I note that AppendicesN3 and N4 state in their headings that they are associated with PSA/Facility Ownership Offers. However, the Request for Offers document, section VI.B,indicates that these forms need to be provided for "any offer". Are these in fact required for PPA Offers, and if so, what portion(s) of the documents need to be completed. Lastly, if these documents must be provided for a PPA offer, is the degree of detail PG&E is requesting different for a PPA offer than fora PSA offer?
N3 and N4 are only specifically required for the PSA since PG&Ewill take ownership. PPA Offers do not need to submit comments to N3 and N4. However, in assessing the PPA, PG&E may consider the new asset against the characteristics of N3 and N4 as part of the evaluation.
41)I am planning on developing a natural gas combined cycle facility that will interconnect to the Gates Substation. If I offer this into the All Source RFO, will this be accepted?
No, the Gates Substation is located in ZP26. PG&E will only accept non-QF natural gas-fired facilities that have firmphysical delivery to NP15.
42)Do participants need to fill out a separate form for each offer variation?
Yes, please provide a separate Appendix H and I with each offer variation and include it along with your cover sheet (Appendix A). When you send the electronic files, please provide unique identifiers for each variation.
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