Questions from Proponents registered for the Request for Proposals (RFP) on the RFP, the RFP process or related documents and BC Hydro's answers to them will be posted on this page.

The Q&As presented on this page will be numbered chronologically based on the date of posting. Most recent Q&As will be posted first.

You must be registered as a Proponent to submit a question. BC Hydro's answers to Proponent's questions are for general information only, do not constitute legal or other advice and do not amend or form part of the RFP, unless confirmed by Addendum or revised RFP documents. For further information on the Q&A process, refer to section 9 of the RFP.

October 8, 2008

108. There have recently been rumours that the Clean Power Call timelines may be further delayed. What is BC Hydro’s commitment to keeping with the posted schedule?
BC Hydro remains committed to proceeding with the Clean Power Call as per Schedule 2 of the RFP.

107. Could you please address the following two scenarios:
A. Assume there are two projects entered into the Clean Power Call within the same area. One project is larger than the other. If the size of the large project is enough to trigger a transmission system upgrade and the smaller project does not necessitate an upgrade, how will this affect BC Hydro’s relative evaluation of the two projects?
When studying projects on a stand alone basis, the cost of the transmission system upgrade will be applied to the levelized firm energy price (for evaluation purposes only) of the project that triggered the upgrade. Projects that do not trigger a transmission system upgrade would not receive such an adjustment. In situations where two or more projects are competing in the same area, in addition to the stand alone studies, BC Hydro may also decide to do cluster studies for various combinations of those projects, in which case the combined cost of the transmission system upgrades of the clustered projects would be applied to the blended firm energy price of those projects (for evaluation purposes only).
B. Assume there is a single project in a certain area. The project is sized such that it requires a transmission system upgrade. Would BC Hydro consider asking the Proponent to downsize the project in order to avoid the transmission system upgrade and the associated costs?
BC Hydro reserves the right to have post-Proposal submission discussions with any of the Proponents, and such discussions may include ways to minimize system upgrade costs. Note that due to the expected high volume of submissions and the limited time available for discussions, BC Hydro will be selective with respect to which Proponents, if any, it holds discussions with.

106. The eligibility requirement noted in Addendum 1 of the RFP states that the technical parameters of a project must be consistent with parameters forming the basis of the BCTC interconnection study. Ostensibly, material inconsistencies would result in the ineligibility of the project for the Clean Power Call.
Please further define 'material inconsistency'.

• For example, if a Proponent submits a project for an interconnection study on October 17, but the project is ultimately downsized for the bid Proposal on November 25, would this change be a material inconsistency?
• Similarity, if a Proponent submits a project Proposal with multiple facilities (a single POI) for an interconnection study on October 17, but the project is then downsized to include a reduced number of facilities for the bid Proposal on November 25, would this change be a material inconsistency?

In such situations, would the Proponent have the opportunity to discuss and explain any inconsistencies to BC Hydro before being deemed ineligible for the Clean Power Call?
Changes may be made to an interconnection study request (to be submitted October 7 and October 17, 2008 for Distribution and Transmission system-connected projects respectively) prior to filing the interconnection study agreement (to be filed November 7 and November 17, 2008 for Distribution and Transmission system-connected projects respectively). Any material changes to a project subsequent to filing the interconnection study agreement will result in a loss of the queue position and/or a study that is no longer materially consistent with the project.

In general, following the filing of an interconnection study agreement, a decrease in the project size or the number of facilities that results in the same, or a decrease to, the injected power to the system would not be considered a material change; however there is a risk that the interconnection costs may be overstated.

The Clean Power Call RFP provides the opportunity for BC Hydro to follow up with Proponents to seek clarification regarding their Proposal submissions; however this is not a requirement.

105. If there are benefits realizable under OATT would these be negotiated with BC Hydro or with BCTC as part of the interconnection process?
Given that BC Hydro is responsible for interconnection costs on the BC Hydro side of the POI, it follows that any system benefits (e.g., capital deferral or improved reliability) resulting from the interconnection would flow to BC Hydro. If such benefits can be identified during the evaluation phase, BC Hydro may choose to consider them in the selection process.

104. Will BC Hydro accept double-sided printing in Proposals?
BC Hydro encourages Proponents to submit their Proposals with double-sided printing.

103. In which of the following two ways will BC Hydro account for the Proponent’s Direct Assignment (DA) costs as estimated by BCTC in the Feasibility Interconnection Study and provided to BC Hydro on February 23, 2009:

1. BC Hydro will add the DA costs to the firm energy price bid by the Proponent on November 25, 2008 in the price levelization process.
2. BC Hydro will NOT add the DA costs to the energy price bid by the proponent on November 25, 2008, because Proponents are expected to estimate the DA costs and incorporate them into the energy price bid by the Proponent on November 25.

The concept of Direct Assignment costs used in the F2006 Call for Tenders is no longer used by BCTC. Instead, for the Clean Power Call and subsequent calls, BCTC is using the OATT concept of Transmission Provider Interconnection Facilities (TPIF) and Network Upgrades (cost allocation based on location of POI). Specifically, TPIF are those interconnection facilities owned by BCTC that are located on the Proponent side of the POI. TPIF are identified in the system impact study report and/or the facilities study report, both of which are normally completed after EPA award. The identification of the TPIF is beyond the scope of the initial interconnection study.

Current BC Hydro policy on the cost allocation of interconnection costs is that Proponents are responsible for the cost of the TPIF and BC Hydro is responsible for the cost of the Network Upgrades. Proponents should therefore consider the need to incorporate a cost estimate for the TPIF into the firm energy price. Note that TPIF are typically limited to a single span of transmission line entering the substation from the substation boundary; however there may be project-specific situations that deviate from the typical requirements for TPIF.

102. Secton B of the Energy Source Data Requirements (Schedule 11) states that for a wind project, a Proponent must provide at least one year of raw hourly or 10 minute on-site historical data that has been used for the wind resource assessment of the site. However, several Q&A’s, for instance Q&As No. 32 and 86, state that less than one year of on-site historical data is acceptable. Furthermore, Q&A No. 86 states that for wind projects with less than one year of on-site historical data, “the energy source data and the corresponding Firm Energy profile will be evaluated and the project may be assessed as having a higher delivery risk given that a limited amount of data is available for the evaluation.” Please clarify the wind data requirement: will wind projects with less than one year of on-site historical data be eligible for an award under the Clean Power Call? Please explain how a “higher delivery risk” will be assessed in the context of a Proposal? What weighting is given to delivery risk? How does a higher delivery risk affect the overall scoring/assessment of a Proposal?
The minimum of one year of on-site historical data is not a Clean Power Call eligibility requirement. As such a Proponent not providing the requested one year of on-site data will not be disqualified.

However, as noted in Q&A No. 86, a project Proposal containing less than one year of data may be assessed as having a higher delivery risk as part of the overall assessment of the project. The impact will be commensurate with the risk identified upon consideration of factors such as the extent to which the source data clearly supports the proposed firm energy profile, the demonstrated ability to deliver energy under the terms of the EPA, the quality of the data set, and the uncertainty associated with making an assessment based on a limited data set. As per the RFP, the assessment of energy source data is one of numerous factors considered in the evaluation of Proposals and award of EPAs.

101. Section B of the Energy Source Data Requirements (Schedule 11) states that “on-site historical data” is required. Can the on-site data be measured from any source or combination of sources (SODAR, LIDAR, or re-analysis data), or must the on-site data be measured by a MET tower?
On-site data is considered to be any observational data obtained for the project location. This includes monitoring towers, SODAR and LIDAR. Re-analysis data is not considered to be observational on-site data.

100. Given the Specimen EPA includes a provision for the "reset" of the firm energy profile on 5-year intervals to ensure the delivery of committed energy amounts is met 80% of the time, can a Proponent bid an initial profile that may not meet this 80% level? Secondly, would bidding such a profle be deemed a "risk" in the risk assessment process?
A Proponent is encouraged to offer an initial firm energy delivery profile that meets the 80% delivery confidence level in its Proposal submission. If a Proponent proposes firm energy quantities that deviate from those expected, then this would be reflected in BC Hydro’s risk assessment and may impact the likelihood of an EPA award. In addition, if an EPA is awarded and the firm energy commitment is not met by the Proponent, liquidated damages are payable.

99. If a Proponent with a project in the BC Hdyro service area changes its project specifications in a material respect after filing an interconnection study agreement, what impact will that have on a Proposal submitted for the project?
The Proposal will not be considered and will be disqualified. As per the Clean Power Call RFP documents:

• section 10 requires that all projects participating in the Clean Power Call be studied using the same base case (i.e. having the same queue position) and a common Base Case Date for the purposes of the interconnection study;
• Addendum 1 states that all technical parameters of a project as described in a Proposal must be consistent in all material respects with the parameters of the corresponding interconnection study.

Therefore, while changes may be made to an interconnection study request prior to signing an interconnection study agreement by November 7, 2008 and November 17, 2008 for Distribution and Transmission system-connected projects respectively, any material changes to the project subsequent to these dates will result in a loss of the queue position and/or a study that is no longer materially consistent with the Project.

98. What is the process for obtaining approval of a project phasing plan? Is the approval binding on BC Hydro through Proposal evaluation? Can an approved phasing plan be changed after approval?
Pre-approval by BC Hydro of a project phasing plan is not mandatory. However, a Proponent may obtain greater certainty that its proposed project phasing plan is consistent with the constraints on phasing set out in the RFP and in the Specimen EPA by seeking an approval of the plan by BC Hydro before Proposal submission. Proponents seeking such approval were to submit a written request to BC Hydro not later than September 30, 2008.

The request should have included all available details of the phased in-service plan, including the information noted in section 5.1 of the RFP, as amended by Addendum 3 (section 1, last paragraph). BC Hydro will review the submission and may seek further information or clarification before advising whether its approval is granted or withheld. BC Hydro will honour the approval in Proposal evaluation, provided that the Proposal does not disclose material inconsistencies with, or omissions in, the information on which the approval was based. A plan, once approved can be changed, but if the change is material the Proponent cannot rely on the approval.

97. I am planning to submit a Proposal under the Standing Offer Program. I am in the “first”, or “a” position, regarding water license rights. Can a developer in the second place, or “b” position, enter the project into the Clean Power Call and be awarded an EPA or an interconnection agreement?
Under the Clean Power Call, any Proposal from a registered Proponent that meets the eligibility criteria stated under section 12 of the RFP will be considered. As such, the status of a water license application does not preclude the submission and consideration of a Proposal. However, as part of the Clean Power Call evaluation process, a risk assessment is conducted, which includes consideration of any obstacles to granting the required permits and licenses, including a water license and other competing applications. The Water Branch should be contacted directly for further information on how mutually exclusive water license applications are processed by the Branch. Please note, under the Standing Offer Program, a proponent must have a water license prior to being granted an EPA.

96. On the Sample Calculations – Price Levelization Model, the super-peak and peak hours are calculated for non-Sundays, and therefore include statutory holidays, whereas the EPA Term Sheet defines peak and super-peak hours as the listed hours, except for Sundays and holidays. Please confirm that off-peak hours include all Sundays and statutory holidays and please provide a list of the statutory holidays that are off-peak days.
As per page 4 of the EPA Term Sheet, for payment purposes off-peak hours are defined as all Sundays, BC statutory holidays, and the hours 00:00 to 06:00 and 22:00 to 24:00 Pacific prevailing time, Monday through Saturday, inclusive. The BC statutory holidays are as follows:

New Year’s Day
Good Friday
Victoria Day
Canada Day
B.C. Day
Labour Day
Thanksgiving Day
Remembrance Day
Christmas Day

95. Is any notification to BC Hydro necessary if the project does not meet any of the pre-Proposal items as outlined in Addendum 3?
The RFP has identified several types of projects for which approvals or determinations should be obtained from BC Hydro prior to Proposal submission. If a Proponent’s project does not fit into any of the project types identified in Addendum 3, then it is not necessary for the Proponent to make a pre-Proposal submission.

94. Will bidders be permitted to modify their bid price (after the November 25, 2008 Proposal submission date) once the results from their transmission interconnection requests are provided? If not, how does BC Hydro expect bidders to incorporate interconnection costs (including any network upgrade cost contributions) into their bid prices?
As stated in the EPA Term Sheet - Interconnection Costs, BC Hydro is responsible for the interconnection costs on the BC Hydro side of the POI. Accordingly, these costs do not need to be incorporated into the firm energy price, however, as stated in the EPA Term Sheet – Interconnection Security, Proponents are required to provide security, in the form of a letter of credit, to BC Hydro in the amount of the estimated network upgrade costs as set out in the interconnection facilities study to be completed after EPA award. To address the issue of establishing the firm energy price prior to knowing the amount of interconnection security to be provided, Proponents will be able to specify in their Proposal (see Schedule 9 - Commercial Proposal, Item 10) the amount by which their firm energy price will be permanently increased for every $1,000,000 of interconnection security provided to BC Hydro.

93. Will BC Hydro consider a Proposal for a project consisting of multiple, geographically diverse generating and other facilities that share a common POI, or must all generating and other facilities be located on the same or contiguous sites?
BC Hydro will consider the Proposal and treat the facilities as a single project, provided that there is a common POI that can accommodate connection of all facilities. Proponents should note that the project, if the Proposal is successful, will be contracted under a single EPA, with a single firm energy price and firm energy profile.

92. Will BC Hydro consider the interconnection of wind power facilities via existing POIs, for example, existing BC Hydro substations or private substations? If so, how is this reflected / assessed in the BCTC and CEAP process?
BC Hydro will consider the interconnection of generators to existing POIs and/or existing BC Hydro or BCTC facilities. This will be assessed by BCTC as part of the CEAP process. The interconnection of a generator to private substations, or to a third party line (which could be either a tap, new three-breaker switching station, or existing customer station) is an indirect connection. Any connections to non-BCTC/BC Hydro assets must have the asset owner (or authorized agent) make the interconnection request. This case will also be assessed by BCTC as part of the CEAP process.

91. Due to the current uncertainty in future raw materials pricing, equipment suppliers and contractors will apply individual commodity price indices to the pre-construction cost estimates between 2008 and start of construction, instead of BC CPI. Will this be considered by BCHydro as an "Essential Variation"? If not, please advise how proponents should address.
As noted in Addendum 4 of the RFP and Q&A No. 38, BC Hydro will not consider and may disqualify Proposals containing Essential Variations to the Specimen EPA that depart from the pricing structure, including the Consumer Price Index for British Columbia, All Items (Not Seasonally Adjusted), as published by Statistics Canada. However, variations to the pricing structure may be submitted and may be considered as Value Variations, provided that a priced and completed "base Proposal", excluding such variations is also submitted.

September 16, 2008

90. If we already have a BCTC feasibility interconnection study for our project that we obtained as part of the F2006 Call, do we need to submit a new feasibility interconnection study request to BCTC for this Call? Is the feasibility study obtained in 2006 still valid?
As per section 10 of the RFP, prior studies will not be accepted, unless in the case of projects located in the Fortis Service Area, the study has been validated in writing by FortisBC as of the Base Case Date. All proposed projects must be studied on the basis of the same base case and a common Base Case Date.

89. In regards to the posted Sample Calculations – Price Levelization Model worksheet, could you explain why the PV calculation table only goes out to December 2040 (rows 66 to 449)? For example, if a project contracts for a 40-year EPA with a COD of December 2012, the PV calculation should extend beyond 2040 (to 2052), thus lowering the levelized price.
The current spreadsheet posted on the Clean Power Call website can only calculate the levelized price for a contract term ending on or before December 2040. BC Hydro will shortly post a new spreadsheet to the Clean Power Call website that will allow users to calculate the levelized price for a contract term ending on or before December 2060.

88. Can you please help us interpret the posted Sample Calculations financial worksheets?

a) For hourly (rather than seasonal) projects, are LDs for delivery shortfalls and non-firm energy payments for excess power deliveries based on an hourly true-up, or a monthly true-up?
LDs for delivery shortfalls and non-firm energy payments for hourly projects are calculated on an hourly basis.

b) In the Sample Calculations – Seasonal Energy Payments spreadsheet, for seasonal projects each month's firm energy seems to be limited to 1/3 of the total firm energy for the quarter. Is this just during freshet, or during all parts of the year?
For the purpose of determining interim monthly payments, the total firm energy for each month in a particular season is assumed to be 1/3 of the seasonal firm energy amount for that season. This assumption is applied to all four seasons and not just the freshet season. The actual allocation of firm and non-firm energy for seasonal projects is done at the end of each season and it is on this basis that the seasonal payment is calculated. Payment for the last month of each season is the calculated seasonal payment less the two interim monthly payments.

c) All renewable projects will ramp up or ramp down their generation over a number of months during the year due to seasonal weather changes. Limiting firm generation during each month to 1/3 of the total quarter limit means that while ramping up, early months will owe LDs and later months will have non-firm energy. The opposite will happen when ramping down. The issue is that LDs will be owed even though the sum of generation during those three months may be exactly equal to the firm energy requirement for the season. This seems to be double jeopardy and does not recognize the nature of non-thermal, non-storage renewable energy projects. Was this BC Hydro's intention?
LDs for delivery shortfalls for seasonal projects are calculated at the end of each season and not on a monthly basis.

d) Will there be a training session on how to interpret and model the tariff for hourly and seasonal projects?
Yes, sample calculations will be reviewed during the Proponents' RFP Information Session scheduled for October 23, 2008. Further information about this information session will be posted to the Clean Power Call website later in September.

87. With the requirement that Environmental Attributes are to be transferred to BC Hydro, would any incentive received from the federal government's ecoENERGY program also need to be transferred to BC Hydro?
Proponents can retain any incentives received from the federal government's ecoENERGY program provided the incentives do not require a transfer of Environmental Attributes from BC Hydro back to the Proponent.

86. Q&A No. 32 states that Proponents with less than a year of energy source data will not be disqualified, but will be affected in the Firm Energy delivery risk assessment. Please describe how Proponents with less than a year's data will be penalized in the risk assessment.
Proponents submitting less than one year of energy source data for a project will not have their bid price adjusted. However, the energy source data and the corresponding Firm Energy profile will be evaluated and the project may be assessed as having a higher delivery risk given that a limited amount of data is available for the evaluation.

85. The presentation slides from the BCTC portion of the Clean Power Call: Joint BC Hydro & BCTC Information Session on July 8, 2008 indicate proof of site control is achieved if the Proponent has a business arrangement with the company holding a land permit for a site. Is this also adequate for proof of site control for the bid itself? If so, please clarify what kind of business arrangement is required between the two companies.
A land permit for a site is sufficient proof of site control. It is not necessary for the registered Proponent to hold the land permit. However, it will be necessary for the Proponent to demonstrate to BC Hydro's satisfaction that it has the right to use the site as necessary to fulfill its obligations under an EPA. Whether or not the "business arrangement" would satisfy this requirement would depend upon the terms of the business arrangement.

84. In the F2006 Open Call for Power, a Cost of Incremental Firm Transmission ("CIFT") credit was applied to hourly firm projects located on Vancouver Island, while there were no adjustments made for monthly firm projects. Could you comment on whether a CIFT credit will be applied to hourly and/or seasonally firm projects located on Vancouver Island in the Clean Power Call?
In the Clean Power Call, a CIFT credit will be applied, for evaluation purposes only, to those projects located on Vancouver Island proposing to deliver hourly Firm Energy. The magnitude of the credit will depend on the profile of hourly Firm Energy that is being offered. Projects located on Vancouver Island proposing to deliver seasonally Firm Energy will not receive a CIFT credit.  

August 22, 2008

83. The following information regarding BC Hydro's 2008 Long-Term Acquisition Plan ("LTAP") application, filed with the BC Utilities Commission (BCUC) on June 12, 2008, may be of interest to Clean Power Call Proponents.
On August 21, 2008, BC Hydro filed its responses to the first round of LTAP Information Requests ("IRs") from the BCUC and intervenors. This document contains a number of responses to IRs related to the Clean Power Call. The document can be found as Exhibit B-3 on BCUC's BC Hydro – 2008 LTAP website.

82. Would you clarify the exact calendar date that the interconnection request for transmission connections must be submitted to BCTC?
For Transmission System-connected projects, Proponents must complete and file an interconnection request with BCTC on or before October 17, 2008. For Distribution System-connected projects, the interconnection request must be submitted to BC Hydro on or before October 7, 2008.  

The above dates have been set to ensure that the interconnection request can be completed and a signed interconnection agreement can be filed by the applicable deadline. For Transmission System-connected projects, a signed Feasibility Interconnection Study agreement, together with the required study fee deposit, must be filed with BCTC on or before 4:00 pm PPT on November 17, 2008.  For Distribution System-connected projects, a signed Preliminary Interconnection Study agreement and the required study fee deposit must be filed with BC Hydro on or before 4:00 pm PPT on November 7, 2008.

To provide more time for the review of interconnection requests, Proponents can start submitting their interconnection requests to BCTC or BC Hydro following the BCTC Interconnection Technical Workshop on September 18, 2008.

81. Can a Proponent submit more than one option for the point of interconnection, or capacity of the project, for the same project? If so, would the additional option(s) be submitted under a Variations Proposal?
Yes, a Proponent may submit under a Variations Proposal one or more alternate points of interconnection or plant capacity for the same project. However, the Proponent must submit a separate interconnection request (to BCTC for Transmission System-connected projects or BC Hydro for Distribution System-connected projects) for each proposed point of interconnection. In the case of one or more alternate plant capacities, the Proponent must either submit a separate interconnection request for each proposed plant capacity or submit a single interconnection request that would cover the maximum proposed plant capacity (note, in the case of the latter, there is a risk that the cost of interconnection may be overstated should the lower plant capacity be selected).

80. For pricing escalation, the EPA Term Sheet reads as follows:
Escalation: Seller can elect:

• 0 to 300% of firm energy price to escalate at BC CPI from January 1, 2008 to the earlier of (i) COD and (ii) guaranteed COD.
• 0 to 50% of firm energy price to escalate at BC CPI from and after the earlier of (i) COD and (ii) guaranteed COD.

Why would a bidder bid anything less than 300% and 50% respectively?
The selection of the escalation percentage will be reflected in the calculation of the levelized firm energy price, which is used in the project evaluation process. If two projects have the same tendered firm energy price, the one with the higher escalation percentage will have a higher levelized firm energy price and will therefore be less competitive.

79. Is it possible to register for the Clean Power Call RFP 'independently', i.e., without an identified project or projects?
The Registration Form requires the prospective Proponent to submit summary information regarding their project to the best of their knowledge at the time of registration. It is recognized that this information may change between registration and Proposal submission.

78. Can you confirm that BC Hydro will be responsible for all interconnection costs including communication, protection and control equipment, substation hardware upgrades, etc? Should the generator assume that it is only responsible for, in the case of a line tap, one span of conductors including dead-end poles?
BC Hydro is responsible for the cost of all such facilities located on BC Hydro's side of the point of interconnection. Note that the incremental cost associated with any facility requirements triggered by a plant modification (e.g. an increase in plant capacity and/or a change in the point of interconnection), as contemplated in the EPA, are to the Seller's account, regardless of which side of the point of interconnection they are located.

77. Can you confirm that the five-year ratchet mechanism works both upward and downward based upon the performance in the prior five years? Assuming that the mechanism works both upward and downward, will BC Hydro consider a ratchet mechanism that in the prior five years uses an average of the five years of performance to set the new target, or more preferably a mechanism that excludes the high and low performance years and averages the remaining three years to set the ratchet for firm energy for the following five years?
The five-year ratchet mechanism works both upwards and downwards, subject to an absolute cap with respect to upward movements that is equal to 110% of the starting Firm Energy.

The purpose of the five-year ratchet mechanism is to have the contracted Firm Energy line up with a physical definition for firm energy based on an 80% confidence of delivery. This approach for establishing Firm Energy allows BC Hydro to plan to serve future system load with more degree of reliability than would be the case if an averaging approach was used to establish Firm Energy.

76. If two projects share the same private transmission line to connect to BCTC (with single point of interconnection to BCTC), do they submit separate Feasibility Interconnection Studies, or a single one with the sum total of power? What if the two projects are in the same Proposal? What if the two projects are in separate Proposals? If the projects are in the same Proposal and a single Feasibility Interconnection Study is required, will they all get rejected if capacity is unavailable for just one of the projects? How does one communicate the fact that all but one project is acceptable to the Proponent?
If projects A and B are co-dependent (i.e. either they both go ahead or neither one goes ahead), then only one Feasibility Interconnection Study is required based on the combined capacity of the two projects. Projects A and B can be considered as co-dependent if both projects are submitted as separate co-dependent Proposals or if they are submitted in the same Proposal with a common point of interconnection.

If projects A and B are mutually exclusive (i.e. either one can go ahead, but not both), then it is up to the Proponent to decide if one or two Feasibility Interconnection Studies are required. If the Proponent decides to only have one study performed, then it should be based on the project with the larger capacity. For Projects A and B to be considered as mutually exclusive, they have to be submitted as separate Proposals.

If one project is conditional on the other, then it is up to the Proponent to decide if one or two Feasibility Interconnection Studies are required. If the Proponent decides to only have one study performed, then it should be based on the combined capacity of the two projects. For one project to be conditional on the other, they have to be submitted as separate Proposals.

Note that if the Proponent decides to have only one study performed in the second and third cases, then there is a risk that the cost of interconnection may be overstated for the smaller configuration. Proponents of Transmission System-connected projects will need to decide which studies they would like to have carried out before October 17, 2008 (before October 7, 2008, if projects are connected to the Distribution System).

The Proponent can indicate the above relationship(s) between two or more Proposals in one or more Proposal Letter(s), as further described in Addendum 1 to the Clean Power Call.

75. If a company intends to propose several projects under different wholly-owned subsidiary companies, are those subsidiaries considered separate Proponents and, if so, would the parent company then pay the registration fee or would it be necessary for each subsidiary to pay the registration fee separately?
BC Hydro will accept one registration fee for a Proponent and its Affiliates, regardless of the number of Proposals they intend to submit. Proponents are strongly advised to carefully review the definition of "Affiliate" in Schedule 1 (Definitions) of the RFP for the purpose of applying the foregoing. An entity that is not an Affiliate of a Proponent must register and pay its own registration fee, even though the Proponent may have some financial interest in that entity. BC Hydro reserves the right to require satisfactory evidence of Affiliate status.

August 12, 2008

74. The following is provided by BC Hydro and is intended to provide additional clarification around the registration process.
The primary intent of registration is to facilitate communications between BC Hydro and prospective Proponents, provide BC Hydro with general information regarding proposed projects and a Disclosure Statement from the Proponents and set in place agreements around Confidentiality and Compliance and Interconnection Disclosure appropriate to the registered Proponent.

BC Hydro recognizes that the information provided at registration, such as project information, a Proponent's strategy around multiple projects and the identity of a registrant and/or its members (e.g., in the case of a joint venture) may change between registration and Proposal submission.

Proponents are to provide the best available information at the time of registration. Changes to this information will not necessarily preclude a Proponent from submitting a Proposal. However, as BC Hydro will only consider Proposals submitted by registered persons or their Affiliates, changes to the identity of either the registrant or, in the case of an unincorporated registrant (e.g., a joint venture), its members, should be reviewed with BC Hydro through contact with the RFP Administrator prior to Proposal submission, as changes to Schedules 3-6 may be required.

73. When do you anticipate posting the list of registered Proponents and what will the project location represent?
We anticipate posting this information in August 2008, prior to the November 25, 2008 Proposal submission deadline. The project location that will be posted will be the "Nearest City" or the "Geographic Region" as submitted on the Registration Form.

72. In parts (b) and (c) of Section 3 of the Code of Conduct Guidelines, the Proponent is required to disclose whether its "owners" or "officers" have relatives or close acquaintances with BC Hydro Employees or Directors. Does "owner" mean each and every shareholder of the Proponent or just the controlling shareholders?
Please see the 'Clarification Issued August 2000' on page 10 of the Attachment 1 to the Director and Employee Code of Conduct [PDF, 36 Kb] for clarification of disclosure requirements with respect to "owners".

71. What is the advantage of the Clean Power Call over the Standing Offer Program?
The Standing Offer Program is intended for projects with a nameplate capacity of greater than 0.05 MW, but not more than 10 MW, and offers a set price for energy based on recent call results. The Clean Power Call is intended for projects that can deliver a minimum of 25 GWh/yr of firm energy. The Clean Power Call follows an RFP process and, as such, it allows greater flexibility to work with developers to come up with cost-effective contract terms and conditions that meet the needs of larger, more complex projects.

70. Can we register as a Proponent if we currently don't have a license over the area (license is held by another group)?
Yes, you can register as a Proponent; however you will need to demonstrate site control for the Proposal submission and Interconnection Request.

69. Does the company used for registration need to be a B.C.-based company?
Clean Power Call eligibility requirements do not require the Proponent to be a B.C.-based company.

68. Are you able to provide the location of the B.C. government's definition of clean or renewable energy as referenced in the Clean Power Call RFP?
"British Columbia's Clean or Renewable Electricity Definitions" [PDF, 38 Kb] are available on the Ministry of Energy, Mines and Petroleum Resources Alternative Energy Policy Branch website.

67. The levelized bid price, as defined in the November 27, 2007 Power Point presentation, is Present Value of Cash Flow/Present Value of Energy Flow. What discount rate is being applied? If they are different for cash and energy, could you please specify?
The discount rate used to present value the cash flow depends on what dollars the cash flow is expressed in. If the cash flow is expressed in nominal dollars, then a nominal discount rate would be used. If the cash flow is expressed in real (i.e. constant) dollars, then a real discount rate would be used. The discount rate used to present value the energy flow is the real discount rate. BC Hydro currently assumes 8.0% for the nominal discount rate and 5.8% for the real discount rate (assuming an annual inflation rate of 2.1%).

66. Please provide examples of the meaning of "frequent or close association" as used in the Code of Conduct Guidelines for "the name of any Director or Employee of BC Hydro with whom the Contractor or any of its owners or officers is connected by frequent or close association".
"Frequent or close association", as used in section 3(b) of the Code of Conduct Guidelines, might arise as result of co-membership in a business association or social club, friendship, etc. If there is uncertainty as to whether a BC Hydro director or employee has a "frequent or close association" with a Proponent or its owners or officers, the Proponent is encouraged to disclose the identity of such BC Hydro director or employee.

65. In the Registration Form (Schedule 3), the Preliminary Project Information section asks for "Scheduled COD". Is this intended to refer to Guaranteed COD for the overall project (i.e., full power) or to the first COD of a phased project (i.e., first power)?
The requested "Scheduled COD" in Registration Form (Schedule 3) is intended to refer to the Guaranteed COD for the overall project (i.e. full power).

64. Can a registered Proponent assign to an affiliated company its rights to submit a Proposal, its position as a selected Proponent for an EPA award, or its awarded EPA?
A Proponent may assign its right to submit a Proposal to an Affiliate. The RFP does not provide a mechanism by which the identity of a Proponent may be altered in the period between the submission of a Proposal and the execution of an EPA. A Proponent's right to assign its rights and obligations under an EPA will be governed by the terms and conditions of the EPA itself (see the Specimen EPA, which is scheduled to be issued September 22, 2008).

63. Please clarify that a Proponent does not have to be the same entity as the registrant when a registrant's wholly owned subsidiaries will be proposing separate projects.
The definition of "Proponent" in the RFP includes an Affiliate of the registrant, as defined in Schedule 1 (Definitions) of the RFP.

62. Can you explain how the site licensing works – is it up to the Proponent to identify a site or are these areas pre-defined by BC Hydro? Have many sites been issued with licenses to other developers thus far?
It is up to the Proponent to identify suitable sites – these are not pre-defined by BC Hydro. For information around site licensing, please contact FrontCounter BC.

61. The EPA Term Sheet, released by BC Hydro on June 11, 2008, states that "total firm energy during system freshet (May 1 to July 31) may not exceed one-quarter of the total annual firm energy proposed". Please confirm that there is no limit on delivery of non-firm energy during freshet and that the Proponent will be paid the non-firm energy price for this power.
Delivery of non-firm energy during freshet, as well as the other three seasons, is subject to the Proponent's plant capacity constraints and related infrastructure constraints. Non-firm energy delivered at any time will be paid the non-firm energy price.

60. How does one fill out Schedule 4 of the RFP? Given that we are instructed not to supplement or edit the Schedules, should we be submitting separate documents?
Schedule 4 (Disclosure Statement) is intended to provide instructions for preparing the list of persons (and associated information) that fall under the disclosure requirements. Proponents are requested to create a separate document with the requested information and complete the blank fields within Schedule 4 for submission with the Registration Documents. Schedule 4 will not be provided as an MS Word document.

59. What is "Section 3" of the Code of Conduct Guidelines? Does this refer to "Attachment 3"?
In the Disclosure Statement (Schedule 4), the reference to "section 3 of the Code of Conduct Guidelines" refers to Guideline 3 in Attachment 1 to BC Hydro's Director and Employee Code of Conduct [PDF, 36 Kb] (page 9).

58. Can you direct me to a map of the "geographic regions" as defined by BC Hydro?
The geographic regions referred to in the Registration Form (Schedule 3) can be viewed on the map available in the "In the Spotlight" area of the Acquiring Power homepage. The map is titled "Illustration of British Columbia by Region (as of September 2007)" [PDF, 2.2 Mb].

57. Will BC Hydro be using CIFT costs and energy loss adjusters in determining the adjusted bid calculations for evaluation purposes in the Clean Power Call? If so, what information will be used for calculating indicative CIFT costs and energy losses? In the F2006 Call, there were "indicative" flow charts available from BCTC that 'signaled' where BC Hydro would prefer the energy to originate (see Bulk Transmission System Cost of Incremental Firm Transmission for the NITS 2004 Facilities Study and BCTC Bulk Transmission System Incremental Transmission Losses).
As described in section 18 of the RFP, Interconnection and Transmission Impacts, BC Hydro will be applying an adjuster to the levelized Firm Energy price to reflect the costs borne by BC Hydro associated with delivering the energy to the Lower Mainland. There are three components to this adjuster.

The first component relates to the cost of interconnection-related network upgrades borne by BC Hydro. The levelized $/MWh adjuster will be 150% of the present value of the cost estimate provided in the feasibility interconnection study, divided by the present value of the annual firm energy. To the extent that other transmission-related network upgrades (but not including upgrades to the bulk transmission system) have been identified, possibly through the undertaking of special studies by BC Hydro, then these costs will also be converted to a levelized $/MWh adjuster in a similar manner.

The second component relates to an allocation of the cost of reinforcing the bulk transmission system, which is needed to move the energy through the system to serve the load. The basis for these costs will be an update to the Cost of Incremental Firm Transmission (CIFT) report, expected to be completed by BCTC in the fall of 2008. The levelized $/MWh adjuster will be the cumulative CIFT ($/MW/year) from the report, multiplied by the project capacity, divided by the annual firm energy.

The third component relates to the physical energy losses associated with moving the energy through the system to serve the load. The basis for these costs will be project-specific special studies undertaken by BC Hydro to estimate the expected annual energy losses for each project. The levelized $/MWh adjuster will be the levelized Firm Energy price (inclusive of the first two adjustments) multiplied by the % loss factor, divided by [1 – % loss factor]. An adjuster (in $/MWh, to be determined for each project based on interconnection studies and further studies commissioned by BC Hydro, relative to bulk transmission upgrades, energy losses and/or other matters) will be added to the Firm Energy price for the distribution and transmission impacts on BC Hydro, reflecting delivery of energy to the Lower Mainland. This adjuster will also take into account (i) BC Hydro's estimate of the impact of any adjustment to the Firm Energy price offered in the Commercial Proposal arising from a Proponent's offered unit price in that Proposal in respect of the cost of providing the Interconnection Security under the terms of the EPA and may take into account (ii) the financial impact, if any, on BC Hydro of interruptions in the supply of energy from existing generation attributable to interconnection of the project.

56. Referring to the Liquidated Damages section found on page 9 of Schedule 7 (EPA Term Sheet): 1- is the market price referred to the on-peak and off-peak mid-C price as published by Platts? 2- does the LD calculation settle hourly or do you calculate the overall delivery shortfall for the month and then compare the mid-C average baseload price for that month and EPA price?
1- The market price referred to is the firm on-peak and off-peak mid-C price indices as published by Dow Jones.

2- The LD calculation is settled hourly for hourly firm projects and is based on an average seasonal mid-C price for seasonally firm projects.

To assist the Proponents with LD calculations, BC Hydro will be posting sample LD calculations to the Clean Power Call website in August 2008.

July 31, 2008

55. Are there any restrictions on changes in ownership or control of a Proponent (e.g. a corporation) after proposal submission?
Proponents must file ownership information with their proposals and are expected to warrant the accuracy of that information under any awarded EPA. Any ownership or control change after proposal submission and before EPA award would be subject to BC Hydro agreeing to qualify the required warranty, which would involve consideration of the impact, if any, of the change on BC Hydro's evaluation of the proposal. After EPA award, changes in ownership and control of the contracting party are governed under the EPA terms and generally require BC Hydro consent.

54. If a joint venture consisting of two or more entities registered as a single Proponent submits a proposal and thereafter one member of the joint venture withdraws before acceptance of the proposal, what is the impact on the proposal and the remaining members of the joint venture?
A proposal constitutes a legal offer to BC Hydro to enter into an EPA. Each member of the joint venture will be jointly and severally, and not severally only, liable to BC Hydro under any contract resulting from acceptance of the offer. However, the offer is not irrevocable and may be withdrawn before acceptance by BC Hydro. If a joint venture member withdraws its support for the offer, BC Hydro may treat the proposal as withdrawn. If a proposal is withdrawn, it cannot be resubmitted in this RFP.

53. Can a member of a joint venture, which is registered as a Proponent in the Clean Power Call in respect of a particular project, register separately as a Proponent in respect of another project? If so, is the $5,000 registration fee payable upon each registration?
The joint venture member can also register separately in respect of a different project and a separate registration fee is payable. Proponents are cautioned that collusion among separate Proponents on pricing and other matters is prohibited under the RFP general terms and conditions.

52. Can a joint venture register as a Proponent in the Clean Power Call?
Yes. Normally, a joint venture, while not a legal entity but a contractual relationship between two or more parties, which may or may not be related by common ownership, may register as a single Proponent in the Clean Power Call. The Disclosure Statement (Schedule 4) required at registration should include the required information in respect of each member of the joint venture. Other forms of joint enterprise – e.g. a jointly owned company or a general, limited or limited liability partnership – may also register as a single Proponent.

51. Is it possible for a group of independent companies to submit a bid without forming a formal consortium? In such case, would the group need to declare a "Full Legal Name of Proponent", or could it be broken up into the number of counterparts?
Yes. A Proposal Letter (Schedule 8) may be submitted on behalf of a group of companies that are not otherwise organized under a written agreement (e.g., a written joint venture agreement or partnership agreement), provided that the person or persons signing the Proposal Letter is authorized to bind all the participating companies. In such a case, it would be appropriate to list each member company as a Proponent.

50. Will awarded EPAs become public?
BC Hydro reserves the right to disclose the EPAs publicly.

49. Will negotiations culminate in an agreement or could a negotiated proposal still fail?
The procurement process allows for post-proposal discussions with one or more Proponents, at the discretion of BC Hydro. Discussions may involve merely clarifications of proposal terms or may involve negotiation of certain proposal prices and/or terms. Proponents are expected to submit complete, priced proposals, capable of acceptance with little or no post-proposal discussions and should not assume that any such discussions will necessarily take place. Following the discussion phase of the process, BC Hydro expects to update its initial evaluation and make decisions on the award of EPAs, including obtaining the required internal approvals. Therefore, a proposal that is the subject of post-proposal discussions will not necessarily be successful.

48. If COD is delayed due to transmission issues, does that extend the application of the designated pre-COD escalation rate?
The pre-COD escalation rate applies until the earlier of Guaranteed COD or actual COD, so that a delay in COD would only extend the pre-COD escalation rate to the Guaranteed COD at the latest.

47. Does BC Hydro value a spread of different CODs within a portfolio?
No.

46. When will line losses to the Lower Mainland for each project be known?
Based on the current schedule, line losses will be released after proposal submission. However, BC Hydro is aware that energy losses have an impact on the project revenues generated from non-firm energy and that Proponents need to consider the impact of line losses when submitting a proposal. Accordingly, BC Hydro will consider the issue of timing and advise Proponents of any changes through a subsequent RFP addendum and/or through the issuance of the Specimen EPA.

45. The Registration Form refers to section 3 of the BC Hydro Code of Conduct Guidelines. Where can this be found and what are the disclosure requirements?
The guidelines can be found on BC Hydro's website by going to: homepage > planning > openness and accountability > director and employee code of conduct > Code of Conduct guidelines applicable to BC Hydro contracts including clarification statements for contracts [PDF, 36 Kb]. Section 3 of the guidelines states:

"Before the Contract is entered into and from time to time as circumstances require, the Contractor shall disclose in writing to BC Hydro to the best of the Contractor's knowledge:

a) any business relationship that the Contractor or any of its owners or officers has with a Director or Employee of BC Hydro,
b) the name of any Director or Employee of BC Hydro who is a relative of the Contractor or any of its owners or officers and
c) the name of any Director or Employee of BC Hydro with whom the Contractor or any of its owners or officers is connected by frequent or close association."

44. Can there be a "gap" between the application of pre- and post-COD price escalation under the EPA?
No, post-COD escalation applies from the date when pre-COD escalation terminates (i.e., the earlier of the Guaranteed COD and actual COD).

43. How is the firm energy amount determined for the first 5 years of the EPA following COD?
Firm energy for the first six years of the EPA is determined by the Proponent's firm energy profile submitted with its proposal, subject to a one-time adjustment prior to the first year anniversary of the COD. Refer to the re-rate process on page 3 of the EPA term sheet for how firm energy is determined after the first six years.

42 Will BC Hydro consider an EPA variation of the shortfall liquidated damages provisions of the contract?
BC Hydro does not intend to negotiate the liquidated damages terms of the EPA.

41. If a residual rights proposal is submitted and not accepted, what impact will that have on the basic proposal?
A residual rights proposal is a separate proposal and may be accepted or rejected by BC Hydro. If rejected, the basic proposal may still be considered for the award of an EPA. Residual rights proposals are not mandatory.

40. The EPA term sheet update indicates that the EPA will include provisions regarding wind collection data recording and reporting. Is this directed at the risk assessment for the proposal evaluation?
No, this is intended to be an ongoing data recording and reporting requirement.

39. Will BC Hydro include provisions in the EPA that recognize the potential for a significant increase in the value of environmental attributes over the term of the contract?
No, any anticipated value should be considered by Proponents in setting their offered firm energy price.

38. Will BC Hydro consider Canada CPI, rather than B.C. CPI, as a basis for price escalation under the EPA?
BC Hydro does not intend to vary from the use of CPI as an escalation adjuster. However, BC Hydro will consider providing the Proponent with the option to select either B.C. CPI or Canadian CPI.

37. Is the $5,000 registration fee applicable per Proponent or per project?
The $5,000 registration fee is per Proponent, regardless of the number of projects submitted by that Proponent.

36. The RFP indicates that alternate projects may not be proposed for the "same site". How does BC Hydro define "same site" (for example, for a wind project)?
In a large call, it is difficult for BC Hydro to fully assess multiple alternatives for a given site. The intent of this provision is therefore to encourage Proponents to put forward their best proposal for the site. Generally, BC Hydro defines a site by reference to the location of generating facilities and related project infrastructure.

35. If a Proponent has a large project (A) with a smaller project (B), which is contingent on A going ahead, will the Call permit a proposal to accommodate that?
Yes, proposals for A and B can be submitted separately, with B designated as co-dependent on A.

34. Will interconnection network upgrade costs estimates be known before proposal submission?
No, based on the present schedule, those estimates will be known after proposal submission.

33. What is the nature of the pre-approval process for Phased Projects?
The rules for permitted phasing of in-service dates (Phased Projects) are set out in the RFP and in most cases should not require a pre-approval request. However, if a Proponent is in doubt about whether their particular phasing plan meets the rules, then a request for pre-approval is possible. BC Hydro will publish further details about how to seek a pre-approval on the RFP website.

32. What will BC Hydro require with respect to energy source data?
Detailed information regarding the energy source data requirements will be provided in Schedule 11 of the RFP, to be issued with the Specimen EPA on September 22, 2008. It is anticipated that Proponents will be requested to provide all historical on-site energy source data in their possession, with a requested minimum of the most recent full year of energy source data. It is not anticipated that projects with an incomplete data set will be disqualified; however this will be reflected in the firm energy delivery risk assessment.

31. Is it BC Hydro's objective to minimize or to eliminate attrition among projects that are awarded EPAs and what strategies will be used to do either?
BC Hydro seeks to minimize attrition. This will be achieved primarily through a rigorous risk assessment conducted as part of proposal evaluation. The risk assessment will look at the status of all aspects of project development, potential obstacles to completion and Proponents' strategies to manage development risk. This assessment will be based primarily on information provided by a Proponent in its proposal. As such, complete and informative proposals, responding to the information requested in Schedule 10 (Project Description Requirements), are required for fair evaluation.

30. Will the names of Proponents who register projects for the Clean Power Call be made public?
The names of the Proponents registered in the Clean Power Call and the corresponding project locations will be posted on the RFP website.

29. How is hourly firm energy defined? What are the hourly firm energy profile submission requirements?
The hourly firm energy amount is the amount of energy the Proponent is required to deliver in that hour as set out in the hourly firm energy profile to be submitted as part of the proposal submission and later incorporated into the EPA. The hourly firm energy profile will require a total of 36 inputs, 3 for each of the peak, super-peak and off-peak hours of each month x 12 months. For illustrative purposes, please see the Bioenergy Call – Phase I RFP documents posted on BC Hydro's website.

28. Can you confirm when the remaining Schedules (8, 9, 10, 11) will be issued?
As noted in the RFP, Schedules 8 to 11 will be issued concurrently with the issuance of the Specimen EPA. As per Addendum 1, the issuance of these documents is scheduled for September 22, 2008.

For representative examples, please refer to the Appendices to the Bioenergy Call – Phase I RFP, posted on BC Hydro's website.

27. Non-Firm Energy – Losses (page 5 of EPA Term Sheet): Non-firm prices are adjusted for losses between the Point of Delivery (POD) and the Lower Mainland; what are the losses between the Kootenay Interchange (with the FortisBC system) and the Lower Mainland?
The energy losses are project specific and will be based on studies undertaken by BC Hydro after the proposal submission date. BC Hydro is aware that energy losses have an impact on the project revenues generated from non-firm energy and that Proponents need to consider the impact of line losses when submitting a proposal. Accordingly, BC Hydro will consider the issue of timing and advise Proponents of any changes through a subsequent RFP addendum and/or through the issuance of the Specimen EPA.

26. Non-Firm Energy – Option B Pricing (page 5 & 6 of EPA Term Sheet): For seasonal projects, how are the non-firm amounts calculated? For example, if the spring firm amount is 30 GWh and the actuals are 5 GWh in February, 15 GWh in March and 25 GWh in April, how much of the 15 GWh of non-firm energy is deemed to be delivered in each month to calculate the non-firm payments?
For seasonal projects, non-firm energy is the difference between the actual energy delivered for the season and the firm energy commitment as determined by the Proponent's firm energy profile submitted with its proposal. In determining the non-firm energy deemed to be delivered in a month within a season, the ratio of firm to non-firm energy at the end of the season is used to prorate the actual monthly energy delivered into firm and non-firm energy for that month. In the example provided in this question, the non-firm energy deemed to be delivered is 15/45 x 5 = 1.67 GWh for February, 15/45 x 15 = 5 GWh for March and 15/45 x 25 = 8.33 GWh for April. To assist the Proponents with the allocation of energy into firm and non-firm for seasonal projects, BC Hydro will be posting sample calculations in early August.

25. Interconnection Security (page 8 of EPA Term Sheet): The EPA Term Sheet reads, in part, "For the term of the EPA, BC Hydro will pay the $/MWh amount specified in Seller's proposal for each $1,000,000 of interconnection security the seller is required to provide to BC Hydro..."; can you please provide an example to clarify how this will be calculated for interconnection security that is not a multiple of $1,000,000?
The amount will be calculated on a pro-rata basis. For example, if the amount specified in the Seller's proposal for each $1,000,000 is $0.3/MWh and the amount of the interconnection security is $2,500,000, then the Firm Energy price would be increased is $0.75/MWh.

24. On page 8 of EPA term sheet, paragraph 1, sentence 2 reads: "Seller will be responsible for all costs of all interconnection facilities to the ... for any additional interconnection or transmission costs arising from any changes..."; does this apply to costs on the BCTC system and to the costs on the Seller's system?
Yes.

23. Liquidated Damages (page 9 of EPA Term Sheet): How is the market price determined for calculating Liquidated Damages as described on page 9 of the EPA term sheet?
The determination of "market price" for purposes of the mark to market damages in the Specimen EPA is expected to be substantially similar to that used in the Specimen EPA for the BC Hydro Bioenergy Call for Power.

22. Is the December 2007 monthly and seasonal payment calculation model posted on the Clean Power Call website still valid?
The monthly and seasonal payment calculation model posted on the Clean Power Call website in December 2007 was intended for stakeholder engagement purposes during the design of the Clean Power Call. It is now out of date.

BC Hydro plans to post to the RFP website in August a series of sample calculation spreadsheets for the Clean Power Call, including a new monthly and seasonal payment calculation model.

21. Does project information and a Proponent's strategy with respect to multiple projects need to be fixed at the time of registration?
Project information required at registration is for BC Hydro's general information only and may be changed prior to proposal submission on November 25, 2008. This includes changes to the Proponent's strategy with respect to multiple projects.

20. Is it mandatory for BC Hydro to receive all environmental attributes? Can an IPP pay for the right to own the carbon credits?
It is mandatory for BC Hydro to receive all environmental attributes associated with the energy sold to BC Hydro.

19. Is the transfer of residual rights to BC Hydro mandatory or does BC Hydro have the right of first refusal? (i.e. can an IPP sell their assets or project to someone other than BC Hydro?)
The offer of residual rights to BC Hydro is optional. Following the expiry of the EPA term, the Proponent has full discretion as to how the assets of the project are dealt with if there is no residual rights agreement. If there is a residual rights agreement, the agreement would take affect upon expiry of the EPA term.

18. Will BC Hydro allow clean energy from outside the province?
The project eligibility requirements in Section 12 of the Clean Power Call RFP stipulate that all projects must be located in British Columbia. This requirement supports the BC Energy Plan objective to achieve energy self-sufficiency by 2016.

17. Is the power that is curtailed as a result of the freshet constraint considered non-firm power and would it receive the non-firm prices as per the EPA term sheet?
Firm energy delivered during the system freshet is limited to one-quarter of the proposed annual firm energy. Additional energy delivered during the system freshet will be paid the non-firm energy price subject to plant capacity constraint.

16. Do Proponents need to supply evidence of community support for a particular IPP?
Proponents will be required to provide evidence of community support and/or consultation as part of the Project Description Requirements (Schedule 10). BC Hydro plans to issue specific guidelines on the contents of the Project Description Requirements in conjunction with the issuance of the Specimen EPA, which is scheduled for September 22, 2008.

15. If changes are made to an EPA in the course of discussions/negotiations with a Proponent, will those changes be offered to all Proponents?
No, negotiated changes to a particular EPA are applicable only to that EPA.

14. What criteria will BC Hydro apply to determine those Proponents with whom it decides to conduct discussions/negotiations?
The decision to conduct discussions/negotiations with a particular Proponent will be driven primarily by BC Hydro's assessment of the potential for better value for ratepayers, based on the proposal, including Value Variations. Discussions may also be conducted to clarify certain proposal elements.

13. Will BC Hydro publish a calculation example of the levelized bid price used in proposal evaluation?
Yes, an example calculation of the levelized firm energy price will be posted to the RFP website.

12. Where does the Proponent's "opportunity cost" fit into the proposal evaluation process?
A Proponent's opportunity cost is among the other criteria, which BC Hydro, in its discretion, may consider in proposal evaluation. To the extent that a contract is extensively negotiated, the Proponent's opportunity cost – what it could reasonably be expected to recover in an alternate sale – may be more relevant. The British Columbia Utilities Commission (BCUC) has indicated in recent decisions that a seller's opportunity cost may warrant some consideration under certain circumstances.

11. What is the timeline for posting interconnection-related securities?
The interconnection security will be delivered to BC Hydro after completion of the system impact and facilities studies, but prior to the Seller entering into the Standard Generator Interconnection Agreement ("SGIP") with BCTC (assuming the project is connecting to the transmission system). The timelines for completing these studies can be found on BCTC's SGIP website.

10. To what extent can IPPs influence changes in the RFP/EPA terms going forward?
While BC Hydro will consider questions/comments submitted by potential and actual Proponents in the near future, significant changes in the substantive terms are not anticipated. Terms have been established following extensive stakeholder engagement, including a fulsome round of written comments following release of the November 2007 draft documents.

9. What sort of performance security is required in the Call?
Bid security is not required. Under the EPA, a performance security is required and an interconnection security may be required – both in letter of credit form. The performance security is sized by reference to the Seller's annual firm energy amount and is variable. The interconnection security is based on the estimated cost of interconnection network upgrades required for the project. See the EPA term sheet for further details.

8. How does the "ratchet clause" work i.e., the five-year re-rate of firm energy?
The clause adjusts the firm energy amount under an EPA every five years, starting with the first five-year period commencing one year after COD, with the intent of converging physically firm energy to contractually firm energy. An illustrative example will be posted to the RFP website. Details are set out in the EPA term sheet.

7. Is there a formal process in the Call to get pre-approval of eligibility?
No, pre-approval of eligibility is not part of the process. Eligibility requires the specified conditions be met, most of which are easy to determine. However, a Proponent or potential Proponent may submit a question identifying whether specific facts meet a particular eligibility criterion and can expect an answer returned directly to the Proponent, and if of general applicability, also posted to the RFP website.

June 11, 2008

6. Wasn't there already a clean call? Has BC Hydro done this before?
Under the 2002/03 Green Power Generation call, BC Hydro awarded 10 to 20-year Electricity Purchase Agreements (EPAs) to 16 projects, representing 1,764 GWh per year of new green generation.

The Clean Power Call has a larger target of 5,000 GWh per year of energy in order to meet the growing electricity needs of the province.

5. What size of projects is BC Hydro looking for?
Projects must deliver a minimum of 25 GWh per year of seasonal or hourly firm energy.

4. What is the definition of "Clean"?
The guidelines for clean will be set out by the province in their forthcoming guidelines.

3. Why are only 'Clean' projects being targeted in this call?
The Clean Power Call aligns with the BC Energy Plan, which calls for 90% of electricity in the province to continue to come from clean or renewable sources and for all new electricity generation projects to have zero net greenhouse gas emissions.

2. Wasn't there a call already underway?
The Clean Power Call was previously referred to as the 2007 Call for Power. To better reflect the mandate and timing of the call, the 2007 Call for Power was renamed to the Clean Power Call.

1. What is the overall purpose of the call?
The Clean Power Call Request for Proposals (RFP) will target up to 5,000 gW hours of clean or renewable energy per year from larger projects using proven technologies, such as hydro, wind, solar and geothermal energy, among others.

The Clean Power Call aligns with the BC Energy Plan, which sets a target of electricity self-sufficiency by 2016.