Questions & Answers
Questions on the Request for Proposals ("RFP"), the RFP process and related documents issued during the call process, and BC Hydro's responses, are posted on this page. They are numbered chronologically based on the date of posting. Most recent Q&As are posted first.
BC Hydro's answers to proponent's questions were for general information only. They did not constitute legal or other advice and did not amend or form part of the RFP, unless confirmed by Addendum or revised RFP documents.
- May 2, 2011 (1 question)
- October 25, 2010 (1 question)
- October 22, 2010 (3 questions)
- August 17, 2010 (3 questions)
- July 22, 2010 (1 question)
- July 14, 2010 (2 questions)
- July 8, 2010 (7 questions)
- June 23, 2010 (2 questions)
- June 18, 2010 (1 question)
- May 31, 2010 (14 questions)
35. What does the schedule change mean for the Bioenergy Phase 2 Call process?
BC Hydro remains committed to the RFP process and has notified Preferred Proponents to ensure they understand the revised RFP timeline and can integrate the schedule change into their project planning. BC Hydro will continue to communicate with Preferred Proponents regarding any updates or further information.
34. Will the Proponent or BC Hydro be responsible for the interconnection costs? If security such as a letter of credit is required, when would this be requested and for what duration would it be held?
Interconnection security is required to cover the entire costs of the Interconnection Network Upgrades (INU) associated with interconnecting the Project to the BC Hydro system. These INU costs are paid for by BC Hydro and secured by the Seller. The full amount of interconnection security is required, either at time of signing of the Interconnection Agreement, or prior to any work commencing on the Project interconnection, depending on the Project schedule.
For Transmission-connected Projects, BC Hydro holds the interconnection security provided by the Seller based on the Open Access Transmission Tariff ("OATT"). The terms for providing this security are described within the OATT, in particular:
- Section 11.5 of Appendix 5 of Attachment M1 - Standard Generator Interconnection Procedures (SGIP) [PDF, 17 MB]; and
- Attachment O – Recovery of New Facilities Costs [PDF, 1.1 MB].
Under the OATT, once the Project has achieved its Commercial Operation Date, BC Hydro releases a portion of the interconnection security at the end of each calendar year based on the capacity of the Project (in MW) designated as a "network resource" and the cost of firm transmission.
BC Hydro adjusts the amount of interconnection security to be held for each Project at the end of each calendar year until the amount of security is reduced to zero. Each time the required amount of security is adjusted, BC Hydro would provide a letter to the Seller stating the specific amount of security that has been released; the Seller is responsible for ensuring that its financial institution releases the security back to the Seller.
Therefore, the amount of interconnection security and release time is dependent on the magnitude of INU costs and the capacity of the project. Normally, a Project will have all of the security released within 5 to 10 years. There are exceptions and this can be as short as 6 months to as long as 25 years, or more.
The specific section of the tariff that outlines this is: Attachment O: Recovery of New Facilities Costs [PDF, 1.1 MB] and can be referenced in section 3C (Page 6) of the OATT.
In addition, please see Q&A 30 regarding the recovery of costs associated with interconnection security.
For Distribution-connected Projects, BC Hydro holds the full amount of interconnection security until the earlier of:
- the fifth anniversary of COD; and,
- the end of any twelve consecutive month period in which the Seller has delivered an amount of Firm Energy not less than 95% of the Annual Firm Energy Amount for that twelve month period.
- 30 days after the termination of the EPA.
33. If a Project includes a new boiler from which a portion of the steam output will be directed to a use other than the generation of Eligible Energy to be sold and delivered under the EPA, and such other usage will displace the use of fossil fuels and thereby generate carbon offsets or other environmental credits, will ownership of those offsets or credits be retained by the Seller?
Yes. In Appendix 1 of the Specimen EPA, the definition of Environmental Attributes includes "all attributes directly associated with, or that may be derived from, the Eligible Energy having decreased environmental impacts relative to energy generated by certain other generation facilities or technologies, including any existing or future credit, allowance, "green" tag, ticket, certificate or other "green" marketing attribute or proprietary or contractual right, whether or not tradable. " The attributes associated with the production of steam that is not directly associated with, or that has not been derived from the Eligible Energy, would not be included in the definition of Environmental Attributes under the Specimen EPA.
Proponents should seek advice from their own legal advisors regarding the application of any term or condition of the Specimen EPA to their own particular circumstances.
Please refer to the Specimen EPA (Revised: October 8, 2010), with specific attention to section 7 and Appendix 1, section 41.
32. We have adopted a legal form and/or governance and management or ownership structure that does not entirely align with that apparently assumed in the design of Form 3. How can I ensure that my Proposal contains all the necessary information where the forms do not seem to respond very well to my unique situation?
The intent of Form 3 is to provide BC Hydro with current information on the Proponent entity. The different parts of Form 3 were designed to accommodate the most common legal entities, but BC Hydro understands that this may not accommodate unusual circumstances or structures. If you believe that a full understanding of the type, governance, management and ownership of the Proponent entity cannot be clearly communicated using the selected parts of Form 3, or any particular section, you should attach an addendum in your own format which clearly communicates the necessary information. For example, if the Proponent is currently an income trust, that could be disclosed in the addendum. You may also wish to use an addendum to describe any reorganization that is in progress or planned, such as conversion to a corporate entity, confirming that no changes in management and/or ownership are expected, or indicating any such expected changes.
The different parts of Form 3 are intended to make it easier to provide the required information, but should not limit or prevent communication of clear, accurate information on the legal nature of the Proponent entity, its governance and management and its ownership.
31. Can I submit a Proposal for the development of a Project in several distinct phases (i .e., a 20 MW first phase, followed by an additional 20 MW in a subsequent phase) in the Bioenergy Phase 2 Call RFP? What should I remit for the Proposal Deposit (the $2,000 per MW of capacity) at the time of Proposal submission?
Proponents may submit a phased Proposal as an Alternate Proposal under the Bioenergy Phase 2 Call RFP. A Base Proposal should be submitted, whether or not an Alternate Proposal is submitted. The Proponent should decide whether the Base Proposal is the first phase only, or alternatively reflecting the development of all phases (i.e., the maximum capacity). The Base Proposal alone can be accepted by BC Hydro, and should not be contingent on any Alternate Proposal. Proponents should submit an Interconnection Request based on capacity of their Base Proposal. The Proposal Deposit should be calculated at the rate of $2,000/MW based on the capacity provided in the Interconnection Request. Evaluation of the Alternate Proposal may require further interconnection studies that BC Hydro would undertake at its discretion. If an EPA is awarded, whether for the Base Proposal or any Alternate, the Proposal Deposit will be released on provision of the required amount of the Performance Security calculated as set out in the definition of "Performance Security" in Appendix 1 of the Specimen EPA.
30. How does a Proponent recover the cost of interconnection security when the final cost of the interconnection will not be known at the time of bid? In addition, how will the integration of BC Hydro and BCTC affect interconnection security?
The RFP permits a Proponent to include a factor into its Commercial Proposal to account for the Cost of Interconnection Security (CIS) associated with its project. The CIS, which must be expressed to the nearest $0.01, is added as a component of the price payable by BC Hydro for each MWh of Firm Energy delivered in each hour during the term of the EPA. See section 3.1 of Appendix 3 of the Specimen EPA in this regard.
The CIS factor is intended to provide a Proponent with an optional mechanism for recovering costs that it incurs in maintaining interconnection security. BC Hydro expects that a Proponent who wishes to avail itself of this option will obtain a cost estimate for providing interconnection security over the period of time that such interconnection security will be in place, and then propose a CIS factor that provides the Proponent with a satisfactory recovery of such costs over the EPA term.
The integration of BC Hydro and BCTC is proceeding. The holding period for the interconnection security is expected to be determined under the Open Access Transmission Tariff (OATT) for Transmission-connected projects in the Bioenergy Phase 2 Call. The existing terms for providing the security for the BCTC interconnection network upgrades are described in the OATT, in particular:
- Section 11.5 of Appendix 5 of Attachment M1 – Standard Generator Interconnection Procedures (SGIP) [PDF, 17 MB] and
- Attachment O – Recovery of New Facilities Costs [PDF, 1.1 MB].
29. If a Proponent has existing and long-standing Forest Licences functioning without First Nations issues, will First Nations consultation be required?
BC Hydro will need to review a Proposal in full in order to be able to make this determination. BC Hydro strongly encourages Proponents to contact their local Integrated Land Management Bureau (ILMB) office to confirm they have all of the necessary permits or permit amendments in place and to obtain information on any First Nations consultation that may be triggered in relation to their Project. Proponents should include any information obtained from ILMB in their Proposals.
28. When can we expect to know the outcome of BC Hydro's assessment as to whether First Nations consultation is required?
BC Hydro will make every effort to expedite its First Nations consultation determination process. There are, however, a number of factors which can affect the timeline associated to undertaking these assessments. These include, but are not limited to, the number of Proposals BC Hydro receives and the nature of Proponents' consultation records. The assessment process is iterative. For example, if the Proponent provides incomplete information, BC Hydro may ask the Proponent to address the deficiency. Similarly, if First Nations consultation is required, but the Proponent's consultation record is insufficient to conclude that the consultation undertaken has been adequate to the current stage of development of the Project, BC Hydro may ask the Proponent to address this deficiency.
Proponents should ensure that their information is complete and succinctly presented in order to help expedite the review process.
27. What is the consequence of a Proponent specifying a plant capacity in its Proposal that is different from the plant capacity specified in a Screening Process Application where the Project is D-Connected in a Designated Area or T-Connected or D-Connected in any area outside a Designated Area?
The RFP provides in subsection 10.3 that "Technical information (e.g., capacity) in a Screening Process Application should be consistent with comparable information in the corresponding Proposal." The purpose of the screening process is to estimate Network Upgrade Costs used in the Preliminary Adjusted Price Spreadsheet in order to determine a Proposal's Preliminary Adjusted Price, which is an important criterion in the choice of Preferred Proponents. If the capacity specified in a Proposal is less than that specified in a Screening Process Application, BC Hydro may waive the non-conformity if it considers the screening results reliable for their intended purpose, but it will not necessarily adjust those results in determining the Preliminary Adjusted Price for evaluation purposes. If the capacity specified in a Proposal is more than that specified in a Screening Process Application, then there is an increased risk of the Network Upgrade Costs exceeding the screening process estimate, and this would be considered in a decision to waive non-conformity. Proponents who specify in a Proposal a plant capacity that differs from that specified in the corresponding Screening Process Application assume all risks of that difference relative to non-conformities and impacts on evaluation.
26. We are proposing a facility where the biomass combustion would occur in an existing system, while the generation would be new equipment. Would this constitute a "greenfield" facility and be eligible for the RFP?
For BC Hydro to consider a Project to be "greenfield" and thus eligible for the RFP, both the energy system (the source of heat through combustion of Clean or Renewable Biomass Energy) and the generation system (the source of the electricity) would need to be new facilities, and not the renovation, refurbishment, re-commissioning and/or use of an existing facility on the site. These new facilities could include some specific items of used equipment procured and relocated and installed on the site. If such used equipment is expected to be extensive, see Q&A 15.
25. For purposes of the Disclosure Statement required for registration, if a corporation is the sole shareholder of the Proponent, is it necessary to list all shareholders of the corporation under item 1 of the Disclosure Statement?
If a corporation is the sole shareholder of the Proponent, then under item 1 of the Disclosure Statement, it is necessary to list only the name of the corporation. However, after review of Disclosure Statements, BC Hydro may require further information and/or clarification regarding any aspect of the Disclosure Statement, including information regarding indirect ownership of a Proponent. For example, if a Proponent is owned by a special purpose holding corporation, BC Hydro may require disclosure of the direct and/or indirect owners of the holding corporation. In response to item 1, Proponents are encouraged to provide full information on direct and indirect ownership of a Proponent entity to minimize the need for further enquiries.
24. The Confidentiality and Compliance Agreement permits BC Hydro to disclose information concerning Proponents and/or Projects, with some restrictions (e.g. attributed pricing) if it considers it necessary to report publicly on the RFP process. What information will be disclosed, and when will it be disclosed?
Under the form of Confidentiality and Compliance Agreement BC Hydro may make disclosures of a Proponent's name, Project location and plant capacity, as well as other information, excluding attributed pricing, if BC Hydro considers it necessary to provide a publicly available report on the RFP process. Information may be reported publicly at the time BC Hydro considers necessary, and all information may not be released at the same time. No decision has been made by BC Hydro as to the content or timing of any such public disclosures. BC Hydro will give prior notice to all registered Proponents shortly before any planned disclosure of Proponent and/or Project information, indicating the nature of the information to be disclosed and the planned disclosure date.
23. Who decides whether to direct award a forest tenure to a Proponent that is awarded an Electricity Purchase Agreement ("EPA") in the Bioenergy Phase 2 Call?
The Minister of Forests and Range decides whether to direct award a forest tenure.
22. Once an EPA is awarded to a Proponent for a Project submitted to the Bioenergy Phase 2 Call, does this automatically result in a forest tenure being issued for that Project?
No. The Minister of Forests and Range may, or may not, direct award a forest tenure for a Project awarded an EPA by BC Hydro. In all cases, the Minister can award forest tenure only in those locations where thorough assessment of fibre resources indicates that the area can support an incremental increase in allowable annual cut.
21. Does the Ministry of Forests and Range ("MOFR") consult with First Nations before deciding whether to award a forest tenure to a Proponent?
Yes. Where tenure opportunities exist and are an integral part of a Proposal, MOFR, with the involvement of the Proponent, will engage with affected First Nations communities regarding potential impacts of the Proponent's fuel plan on aboriginal interests and asserted treaty rights.
20. When does the Minister of Forests and Range decide whether to direct award a forest tenure to a Project that is awarded an EPA?
Upon receipt of the consultation package from the MOFR staff, the Minister of Forests and Range considers the outputs from consultation and makes a final decision regarding the volume to be offered and which of the EPAs will be designated as a "bioenergy supply contract" under Section 13.2 of the Forest Act, thereby making them eligible for a direct award offer of a forest tenure. The Ministry of Forests and Range will inform Proponents with an EPA of the Minister's decision.
19. Can the Minister of Forests and Range put conditions or restrictions on the award of forest tenure?
Yes. The Minister can specify conditions or restrictions on the forest tenure at the time the Minister designates an EPA as a "bioenergy supply contract". One condition that will be applicable to all forest tenures awarded to Proponents with a designated "bioenergy supply contract" is that the Proponent must meet its Commercial Operation Date obligation under its EPA with BC Hydro. If the Proponent fails to fulfill this obligation then the forest tenure for the Project is revoked.
18. Is the Registration Fee refundable?
As per subsection 14.3 of the RFP, the Registration Fee in the amount of $15,000 and payable at the time of registration is non refundable.
17. How were the screening-level estimating data determined in the Preliminary Adjusted Price Spreadsheet?
The estimating data were provided by BCTC and reflect high-level estimates of interconnection costs and energy losses at various transmission interconnection voltages in the Designated Areas. The data is for screening purposes only. Proponents with T-Connected projects in the Designated Areas may use this data to calculate a Preliminary Adjusted Price for their Project, and assess the resulting Preliminary Adjusted Price in comparison to the Maximum Adjusted Price. For Preferred Proponents, estimates for Project-specific interconnection costs and energy losses will be determined by Feasibility Studies. For Projects selected for contract award, the estimates determined by Feasibility Studies will be used to determine the Final Adjusted Price for a Project. See Q&As 8 and 10 as well as section 10 of the RFP and the Preliminary Adjusted Price Spreadsheet found on the Documents page for further information.
16. Do these estimates only apply to T-Connected projects in the Designated Areas?
Yes. Only Proponents with T-Connected projects in Designated Areas can use the Screening Level Data in Tab A of the Preliminary Adjusted Price Spreadsheet. See section 10 of the RFP, as well as the Preliminary Adjusted Price Spreadsheet user guide for further information.
15. Would a Project that incorporates equipment from a facility that is permanently or indefinitely shutdown be considered eligible for this Call?
A Project must be "greenfield" – i.e., new facilities. A Project consisting of the renovation, refurbishment and/or recommissioning of an existing generation facility, whether or not permanently or indefinitely shut down, at its existing site is a "brownfield" Project, and not eligible in this Call. However, while generating facilities must be new or "greenfield", individual items of used equipment may be acquired by a Proponent for relocation and incorporation into a generation plant that is otherwise substantially comprised of new equipment and other facilities. Proponents intending to make extensive use of used equipment may provide BC Hydro with details of their procurement plan, indicating which items are expected to be sourced as used equipment, in order to obtain further guidance on eligibility as a "greenfield" Project.
14. What kinds of projects are eligible to participate?
Projects must meet the RFP eligibility requirements, including registration and payment of the required fees. Projects must also:
- be new facilities;
- be connected directly, or via the FortisBC transmission system, to the integrated Transmission System (but not via any transmission system outside British Columbia) or the Distribution System;
- be located in British Columbia;
- generate Clean or Renewable Biomass Energy;
- have a minimum electrical capacity of 5 MW;
- not be under consideration, or the subject of an electricity purchase or other agreement, in BC Hydro's Community-Based Biomass Power Call Request for Qualifications ("CBB RFQ"), Integrated Power Offer ("IPO") or Standing Offer Program ("SOP"), or the subject of an application, or approved funding, under Canada's Pulp and Paper Green Transformation Program, and
- not have output that is subject to an existing electricity purchase agreement with BC Hydro.
13. What is the target for Bioenergy Phase 2?
BC Hydro is looking to acquire up to 1,000 GWh/year of cost-effective energy from this Call.
12. What is the timeline for the RFP?
The RFP timeline has been updated and can be found on the Documents page.
11. What is the Maximum Adjusted Price?
The Maximum Adjusted Price is $150/MWh of Firm Energy. BC Hydro will not award or sign an EPA under this RFP if the "Final Adjusted Price" exceeds the Maximum Adjusted Price.
- estimated Network Upgrade Costs and System losses, and
- "Project Impacts".
Estimated Network Upgrade Costs and System losses are based on screening level interconnection data for purposes of selection of Preferred Proponents for negotiation, and on feasibility study level data for purposes of final decisions on EPA award and signing. Project Impacts are BC Hydro's determination the financial impact of a Project on BC Hydro's generation facilities and on the System (transmission and/or distribution), together with Variations to the form of Specimen EPA containing any Alternate Proposal. A Preliminary Adjusted Price is determined prior to selection of Preferred Proponents. The Final Adjusted Price is determined on completion of any negotiations and before award and signing of an EPA. Both the Preliminary Adjusted Price and Final Adjusted Price are levelized prices.
9. Why establish a Maximum Adjusted Price?
The disclosure of a Maximum Adjusted Price enables Proponents to assess whether or not they can price a Proposal within the maximum price constraint, before registering and incurring the expense of participating in the RFP process.
8. What are the Designated Areas?
The Ministry of Forests and Range ("MOFR") has considered available forest-based biomass and existing usage in British Columbia. MOFR has estimated that Projects in Designated Areas are most likely to facilitate access to forest-based biomass fuel and to diminish the impact on existing usage of forest-based biomass.
BC Hydro and BCTC have also produced preliminary cost studies for interconnecting with the Transmission System in the Designated Areas. As a result, before registration Proponents can evaluate potential Transmission System-connected Projects in these areas and consider whether they are able to bring their Project in under the Maximum Adjusted Price of $150/MWh.
7. What if a project is Distribution-connected and/or is outside the six Designated Areas? Is it still eligible?
Distribution System-connected Projects and Transmission System-connected Projects outside the six Designated Areas are eligible to participate in this RFP. However, a screening process will be required for these Projects after Proponent registration, to provide preliminary estimates of Network Upgrade Costs and System losses.
6. The interconnection process is different from what BC Hydro has followed in recent calls. Why the change?
BC Hydro's intent with the interconnection process in this RFP is to reduce upfront costs paid by Independent Power Producers ("IPPs") to participate in the RFP, and also to provide timely information to IPPs in order to help them decide if they want to participate in this RFP. Screening level estimates of Network Upgrade Costs and System losses will be used to adjust prices for the selection of Preferred Proponents for negotiation. Only Preferred Proponents will incur the costs of feasibility level interconnection studies.
5. What happens if the final interconnection results are higher than the preliminary estimates? Will BC Hydro sign an EPA?
BC Hydro will not sign an EPA if the Final Adjusted Price exceeds the Maximum Adjusted Price. If the estimates used in determining the Final Adjusted Price are higher than those used in determining the Preliminary Adjusted Price (other than due to changes in Proponent-supplied data), then deposits will be refunded.
4. Where can Proponents find out more information regarding the interconnection study process?
Section 10 of the RFP outlines the interconnection study process that will be followed. Proponents can also contact BC Hydro with interconnections-related questions.
3. Many forest industry-based communities in B.C. are suffering because of economic downturn or mountain pine beetle. Will the Phase 2 Call address these issues?
The 2008 BC Bioenergy Strategy actions set a path to diversify rural economies and turn adversity into opportunity. Both phases of the Bioenergy Call are important actions under that strategy.
2. Will BCHydro accept proposals where fuel price risk is shared or transferred from the Proponent to BC Hydro?
In accordance with the policy of the Government of British Columbia, BC Hydro will not consider Variations having the effect of transferring to BC Hydro any biomass fuel price risk under EPAs awarded pursuant to this RFP.
1. Why was there a delay in issuing the RFP?
Time was needed for the Ministry of Energy, Mines and Petroleum Resources ("MEMPR") and MOFR to analyze the contribution of bioenergy as part of a broader innovative, integrated solution that helps to maximize the value of forest fibre, meet B.C.'s clean and renewable energy needs, and promote sustainable rural communities.