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.
- November 18, 2009 (2 questions)
- November 17, 2009 (4 questions)
- November 19, 2008 (24 questions)
- November 12, 2008 (11 questions)
- October 31, 2008 (36 questions)
- October 21, 2008 (13 questions)
- October 8, 2008 (18 questions)
- September 16, 2008 (7 questions)
- August 22, 2008 (9 questions)
- August 12, 2008 (19 questions)
- July 31, 2008 (49 questions)
- June 11, 2008 (6 questions)
198. Why is BC Hydro assessing the adequacy of First Nations consultation?
On February 18, 2009, the B.C. Court of Appeal issued two decisions which have significant implications for BC Hydro’s role in First Nations consultation with respect to the proposed sale of power to BC Hydro. The decisions are the Carrier Sekani Tribal Council v. British Columbia Utilities Commission, (2009 BCCA 67) and the Kwikwetlem First Nation v. British Columbia Utilities Commission (2009 BCCA 68). In light of these decisions BC Hydro will be assessing the adequacy of First Nations consultation prior to entering into an electricty purchase agreement for the sale of power to BC Hydro. Further information or action may be required from or by Proponents to enable BC Hydro to complete that assessment. BC Hydro will contact Proponents if further information is required.
197. How will BC Hydro assess the adequacy of First Nations consultation done by Proponents in the Clean Power Call? What factors will BC Hydro consider in its assessment?
BC Hydro will consider a number of factors when assessing First Nations consultation, which may include the following:
- Information on how the Proponent determined which First Nations to consult.
- Information on the potential degree of impact of a project on aboriginal rights and title, and information on how this assessment was reached.
- Information on the level of consultation and potential avoidance, mitigation or accommodation required for each impact and how this was, or will, be undertaken by the Proponent as evidenced by consultation reports, logs, impact benefit agreements, letters of support, correspondence and any other material submitted demonstrating consultation.
196. What are BC Hydro's next steps with the Clean Power Call?
BC Hydro is moving forward with post-proposal discussions with the Proponents of 13 Proposals that have been identified as the most cost-effective. Proponents for these Proposals have been notified. BC Hydro will also complete an assessment of adequacy of consultation with First Nations for these Proposals. Proponents of the other 34 Proposals remaining in the Clean Power Call will be contacted by November 30, 2009 to be afforded an opportunity to make their respective Proposals more cost-effective. Additionally, some Proponents were notified that their Proposals are no longer under consideration.
195. When will Electricity Purchase Agreements (EPAs) be awarded?
While the timing of award of EPAs will be dependent on the time required to finalize negotiations and to complete the assessment of adequacy of consultation with First Nations for particular Proposals, BC Hydro intends to begin awarding EPAs in December 2009.
194. Why were some Proposals eliminated?
The Proposals that are no longer under consideration were eliminated for a variety of reasons. The reasons included non-conformity with requirements of the RFP or too high a level of risk associated with the Proposal. Less desirable variations of Proposals bid in by Proponents were also eliminated.
193. What does BC Hydro consider 'acceptable risk'?
BC Hydro looks at several factors when considering a project's risk, including financial, technical, permitting/approvals and delivery risk, and assesses the likelihood that the project will achieve commercial operation.
192. As you are aware, we are currently in the midst of a deep global financial crisis. Due to this unforeseen and unprecedented global financial crisis, it is currently extremely difficult for renewable energy developers to obtain project financing on stable and predictable terms. We therefore request that BC Hydro extends the November 25, 2008 Clean Power Call deadline by 60 to 90 days. An extension will give time for financial markets to settle and return to a more stable state. A return to stability will allow developers to return to "business as usual" and provide more competitive pricing to BC Hydro. We firmly believe that an extension is in the best interests of BC Hydro, the Government of B.C., all British Columbians and the renewable energy industry.
The deadline for Proposals submission remains unchanged at 4:00 p.m. PPT November 25, 2008. BC Hydro is mindful of the current financial situation and the uncertainty as to when circumstances may change. To date, it appears that there remains significant interest in the Clean Power Call. BC Hydro will review the Proposal submissions received on November 25, 2008 and will evaluate the Proposals based on the evaluation criteria described in the RFP. To the extent that BC Hydro determines that any Proposals provide cost-effective energy supply, BC Hydro intends to award Electricity Purchase Agreements. Ultimately, any EPAs awarded under the Clean Power Call RFP will be subject to filing with the BCUC pursuant section 71 of the Utilities Commission Act and the BCUC will determine whether the EPAs are in the public interest.
191. For projects which begin operation part way through a year, will the revenues be paid based upon a monthly CPI escalator until the new year? In the current model, the price is escalated monthly.
For a project with a COD part way through a year, the pre-COD escalation terminates on the first of the month that the earlier of COD and Guaranteed COD occur and post-COD escalation takes over thereafter. However, the Firm Energy price is adjusted for post-COD escalation only once a year, on the first day of the calendar year. This means that once a project reaches COD, there will be no further escalation for the balance of the year. The next Firm Energy adjustment occurs on January 1st of the year following COD using the post-COD escalation factor.
190. In the EPA, will the CPI esclator always lag by one year, as the CPI adjustor on January 1 will reflect the prior year's inflation?
The Firm Energy price adjustment following COD is an annual adjustment on the first day of each calendar year using the post-COD escalation factor. Other than the time of delivery adjustment, the Firm Energy price following an annual adjustment remains constant for the balance of that year, meaning that Firm Energy delivered in the last month of the calendar year will be paid the same Firm Energy price as at the start of the calendar year.
189. Is it required, or is it advantageous, that a Proponent attaches a "letter of opinion" from TerraChoice Environmental Marketing stating that the project being proposed would likely qualify for certification under the Environmental Choice Program?
Proponents of projects that use a clean or renewable resource or technology as described in the "British Columbia's Clean or Renewable Electricity Definitions" are not required nor is there an advantage, to attach a "letter of opinion" from TerraChoice Environmental Marketing stating that the project being proposed would likely qualify for certification under the Environmental Choice Program.
188. Will BC Hydro be using the price levelization methodology as outlined in the sample calculation spreadsheet to compare projects? If yes, will the calculation parameters as shown in the model (inflation, discount rate, etc.?) be used for the comparison? If not, which factors will be used?
For purposes of the Clean Power Call price evaluation, BC Hydro is planning to use the same price levelization methodology as outlined in the Sample Calculations – Updated Price Levelization Model issued on September 22, 2008. As of the date of this posting, BC Hydro intends to use the same inflation and discount rate assumptions as those used in the sample calculation spreadsheet; however BC Hydro reserves the right to use the best information available at the time of the evaluation, which could include changes to those assumptions.
187. According to the Proposal Letter (Schedule 8) guidelines, Proponents are required to provide an update showing changes to the Disclosure Statement (Schedule 4) submitted upon registration. Is an updated Disclosure Statement required for each Project or will a single Disclosure Statement for the Proponent be sufficient?
Disclosure Statements should clearly identify if and how any disclosures differ for each Project submitted by a Proponent. As such, the Proponent may choose to submit separate Disclosure Statements for each Project.
186. Is it acceptable to include the Project Description, Energy Source Data and Variations Proposal in the same binder, for a total of 4 binders? Or, would BC Hydro prefer each document in a separate binder, for a total of 12 binders?
BC Hydro's preference is that the Variations Proposal not be bound with other Proposal documents. The Project Description and Energy Source Data can be placed in the same binder, as long as each respective element is clearly identified.
185. Regarding section 2.14 of the Project Description Requirements (Schedule 10), please provide more specific details as to what BC Hydro expects wind developers to include in a permanent wind data collection system. Typically, permanent met towers are installed as a part of the wind forecasting program. The cost and number of met towers would depend on the site size and complexity of the site as well on the company that performs the forecasting. Would the developer be required to contract a company to provide wind forecasting and install towers, or would a SCADA system installed at the wind turbines be sufficient?
Proponents are not required to perform, or contract a company to perform, wind power forecasting, given that BC Hydro intends to implement a centralized wind power forecasting system. In support of the forecasting function, a permanent wind data collection system should include SCADA data (including but not limited to wind speed and direction, power output, and turbine availability) and measurements from at least one permanent hub-height met tower. The permanent met tower(s) should provide wind speed and direction measurements at multiple heights, as well as measurements of temperature, pressure and relative humidity.
184. In subsection 2.9.3 (a)(ii) of the Project Description Requirements (Schedule 10), does the following text apply to all required permits, whether or not already applied for, or only to those permits that have been applied for, but not yet received?
"As an Exhibit to the Project Description a copy of any pending permit application with a copy of letter of receipt or acknowledgement from the respective agency, a description of the status of the application, any known opposition or impediment to the issue of the permit and the expected impact thereof on the permitting schedule and any planned measures which the Proponent intends to implement to avoid or mitigate any anticipated delay in issue of the permit"
Subsection 2.9.3 of Schedule 10 applies to all required permits that have not yet been received, whether or not they have been applied for. In the case of permits not yet applied for, it is acknowledged that it will not be possible to provide an Exhibit containing a pending permit application.
183. As part of our First Nation engagement process, we have sent the First Nation impacted by our proposed project draft copies of Environmental Assessment filings, such as the project description and draft terms of reference. These drafts have been refined and revised copies of the filings have been sent to the First Nation. We would like to include the complete document of only the most recent version in our submission, along with the title page and table of contents of the earlier drafts. Would BC Hydro like to see all drafts in full?
BC Hydro does not require the Proponent to submit the earlier draft Environmental Assessment filings. A full copy of the most recent submission will suffice.
182. If a Proponent currently has committed lines of credit from credit worthy banking facilities that exceed the project cost, would BC Hydro accept evidence of these lines of credit (e.g., through audited annual financial statements) and therefore waive the requirement for a commitment letter of credit from a banking institution?
It should be noted that BC Hydro is not asking for a "commitment letter of credit from a banking institution", but rather a commitment letter from debt and equity providers. A commitment letter demonstrating a firm commitment from an equity or debt provider is not a Proposal requirement – it is a recommended element. A line of credit does not replace a commitment letter for debt or equity financing, unless it is accompanied by a letter from the lending institution indicating that (as noted in subsection 3.2.3(a)(i) of Schedule 10): "they have reviewed and evaluated the Specimen EPA, the Proponent's cost estimates and financing assumptions for the Project, and based on this evaluation confirm that they will provide a specified amount of financing, subject only to certain limited conditions as specified in the letter."
181. Is it sufficient to submit consolidated financial statements in support of a Proponent or project?
Subsection 3.2.5 (b) of the Project Description Requirements (Schedule 10) reads:
If the Proponent's financial information is consolidated with other entities, it is the Proponent's responsibility to extract and submit as separate documents all data and information solely related to the Proponent, including financial information, associated notes and all other information that would comprise a full financial report conforming to GAAP.
If a Proponent wishes to submit an annual report of any corporation, it is the Proponent's responsibility to identify to BC Hydro the relevant information contained within the report that demonstrates the financial strength or support that is relevant to the Proponent and the Project. The Proponent should also clearly specify the relationship between itself and the corporate entity for which the financial information is submitted.
180. Subsection 2.9.3(a)(i) of the Project Description Requirements (Schedule 10) asks for a permitting schedule. Does this need to be in Gantt chart form?
The permitting schedule does not need to be in Gantt chart form. Proponents may use their discretion as to the best format for presenting this schedule.
179. Subsection 2.9.3 of the Project Description Requirements (Schedule 10) refers to pending permits. Does it also include permits "Not applied for yet"?
Yes, the reference to pending permits in subsection 2.9.3 of Schedule 10 includes permits not applied for yet.
178. Does BC Hydro envision any scenario whereby a party that has a project being proposed into the RFP by one of its affiliates can:
- hold discussions with other potential bidders; and/or
- conduct a cursory level of due diligence on another bidder's project in advance of the bid submission date without running afoul of the non-collusion provisions?
BC Hydro cannot speculate on the circumstances, if any, in which it may consent to communications between unrelated Proponents or their Affiliates. Generally, BC Hydro expects that the provisions of the Confidentiality and Compliance Agreement will be observed by all Proponents, including protecting the confidentiality of discussions, if any, with BC Hydro and refraining from collusion among Proponents throughout the RFP process. Any waiver of these contractual obligations would be considered, if at all, only in limited circumstances where the integrity and competitiveness of the process is not threatened.
177. If a Proponent is considering the sale of a project for which it is intending to submit an independently prepared Proposal, under what conditions can the Proponent initiate due diligence and discussions regarding the proposed sale of its project shortly after Proposal submission (with the consent of BC Hydro such that the project's buyer will participate in the post-RFP discussions between the Proponent and BC Hydro) with a project buyer that is an affiliate of another registered Proponent?
BC Hydro will consider only Proposals from registered Proponents or their Affiliates, and registration must be complete before or on submission of the Proposal. Consequently, Proposals are not assignable by the Proponent, whether to its Affiliate or to another Proponent or its Affiliate, after Proposal submission. Also, Proponents are bound by the Confidentiality and Compliance Agreement, which includes in addition to obligations of confidentiality, a commitment to comply with the RFP rules relative to collusion and other matters. Consequently, a registered Proponent who submits a Proposal should not undertake discussions with any other Proponent, or Affiliate of any other Proponent, with a pending Proposal, that could violate these obligations, for example, by disclosing confidential discussions with BC Hydro and/or pricing or other competitively-sensitive information.
176. Is it possible for a Proponent to sell the rights to its proposed project to a third party, or an affiliate of a registered Proponent, prior to Proposal submission, thereby allowing the purchaser of the project to register as a Proponent and submit a Proposal? (Note that such a sale would be conditional upon receipt of certain consents and authorizations, including consent to assign the interconnection study agreement, which will not have been received prior to the bid submission deadline).
All Persons intending to submit a Proposal in the Clean Power Call must be registered as a Proponent. Registration requires filing of a Registration Form (Schedule 3), a Disclosure Statement (Schedule 4), two copies of a Confidentiality and Compliance Agreement (Schedule 5), an Interconnection Disclosure Consent (Schedule 6) (collectively "Registration Documents") and a registration fee. See section 5 of the RFP and relevant Addenda for further details. BC Hydro will consider only Proposals from registered Proponents or their Affiliates. See the definition of "Affiliate" in Schedule 1 of the RFP. A registration is not assignable. BC Hydro encouraged Proponents to register by August 12, 2008, but may accept late registrations up to the time for Proposal submission.
A registered Proponent may transfer Project assets to its Affiliate, and the Affiliate may submit a Proposal under the registration. The Affiliate should file an updated Disclosure Statement (Schedule 4), two copies of a Confidentiality and Compliance Agreement (Schedule 5), an Interconnection Disclosure Consent (Schedule 6) all in respect of the Affiliate, and those documents may be filed before or with submission of the Proposal.
If a registered Proponent transfers Project assets to a Person that is not an Affiliate of the registered Proponent, then the transferee should file a complete set of Registration Documents and a registration fee before or with the submission of the Proposal. The transferee would be required to meet all other eligibility requirements under the RFP.
175. With reference to subsection 2.9.3 (Pending Permits) of the Project Description Requirements (Schedule 10), are project descriptions submitted to the BC Environmental Assessment Office (BCEAO) and Canadian Environmental Assessment Agency (CEAA) considered "permit applications"? If yes, for projects that are currently included in both types of assessments, should a copy of each project description be included in the RFP Proposal as an Exhibit even if both descriptions contain identical information and a significant number of identical maps and figures, which are also required in other sections of the Project Description Requirements?
One project description and one application are acceptable for the harmonized review of BC EAO and CEAA reviewed projects.
174. With regard to the information/documents provided as Exhibits to the Project Description, it appears that the same information/documents are requested in multiple sections of the Project Description. Should multiple copies of the same information be provided as separate Exhibits to the Project Description?
Where duplicate information is requested, it is acceptable to BC Hydro if Proponents include the requested information once in an Exhibit and provide a clear reference to that Exhibit in the relevant sections of the Project Description.
173. We are preparing our bid package and reviewing the Proposal contents guidelines. We anticipate that our bid will be in the range of five to six binders in size. Multiply that by four copies, and one box is not going to be big enough. Would it be acceptable to have one box for each copy of our submission (four boxes total)?
Yes, BC Hydro will accept Proposal(s) submitted in multiple boxes, as long as the contents of each box are clearly identified. Proponents are also reminded to mark the boxes containing the Proposal(s) with the Proponent name and return address.
172. For our proposed project, we anticipate scheduling a recurring maintenance program during either the System Freshet Season or the summer, a program that may be up to 3 weeks in duration every year. We would also anticipate scheduling these Planned Outages with the requested 90 days notice described in section 6.3 of the Specimen EPA. We are concerned that these Outages may cause Liquidated Damages or project costs of another nature. Can you please confirm that Planned Outages will not be considered deemed Eligible Energy, per section 7.8 of the Specimen EPA?
Subsection 7.7(a)(vi) of the Specimen EPA excuses the Seller from delivery obligations during Authorized Planned Outages and these Outages are backed out of the delivery shortfall Liquidated Damages calculation in section 13.2. The deemed Eligible Energy referred to in section 7.8 of the Specimen EPA is intended to provide payment to the Seller for Energy that could have been generated and delivered by the Seller's Plant but was prevented from doing so at the point of interconnection (POI) due to a Transmission System Outage not caused by either the Seller or events beyond the control of BC Hydro or the Transmission Authority. During an Authorized Planned Outage, there is no deemed Eligible Energy.
Can you describe how these Planned Outages are best presented in the Commercial Proposal and/or the Specimen EPA (refer to item #12 (d) in the Commercial Proposal, which states "Assume no Planned Outages (as defined in the Specimen EPA) in completing the table")? How do we complete the energy profile table in item 12 of the Commercial Proposal and/or the EPA without it causing Liquidated Damages and causing a "resetting" of the 5-year "Firm Energy adjustment" calculation? How would the 5-year adjustment calculation treat these Planned Outages?
In completing item #12 (d) in the Commercial Proposal, the Proponent should not make allowance for Planned Outages, as Firm Energy delivery obligations will be adjusted for these Outages over the term of the EPA. During Authorized Planned Outages, Firm Energy delivery obligations are excused and therefore, non-deliveries during these periods do not attract Liquidated Damages.
In resetting the "Firm Energy Amounts" at 5-year intervals, the "Total Energy Amount" used in the calculation is the sum of (i) the amount of Energy actually delivered to the POI and (ii) the amount of Energy that could have been generated and delivered to the POI, but for Outages of the Seller's Plant. In other words, a certain level of generation output will be assumed during an Outage period for the purpose of calculating the 5-year Firm Energy adjustments. Please refer to subsection 7.10(b) of the Specimen EPA for further details.
171. The Energy Source Data Requirements (Schedule 11), released on September 22, 2008, require that the submission follows "the numbers system and the headings set out in these instructions". Can you please be explicit as to what numbering system and headings this is referring to? Does it mean simply the headings "A. Hydrological Data" and "B. Wind Data", etc.? Or are there supposed to be more comprehensive headings similar to those in the revised Project Description Requirements (Schedule 10) released on October 21, 2008?
Proponents are strongly advised to follow the numbering system and the headings set out in the instructions to the Energy Source Data Requirements (Schedule 11). For example, for a hydro project, the heading "A. Hydrological Data" should be used along with the subheadings (a) through (h).
170. Regarding the Project Description Requirements (Schedule 10), we understand that BC Hydro strongly encourages Proponents to follow the numbering system and the headings as set out in item 3 of the General Instructions. However, can Proposals contain a more detailed numbering system than the one set forth in the Project Description Requirements document? For example, using 2.1.1 instead of the letter (a) under heading "2.1 Seller's Plant Description" would make it easier to generate a clear table of contents. Also, the bullets under 2.1(a) may be better served by assigning each a subheading (e.g., 22.214.171.124, 126.96.36.199 and so on), which would facilitate the organization of the Project Description. If the Proponent maintains the overall numbering system set forth in the Project Description Requirements and adds further numbered subheadings, will this be acceptable to BC Hydro?
In preparing the Project Description, Proponents are strongly advised to use the numbering system outlined in Schedule 10. Any subheadings below the prescribed outline are acceptable. For example, for information related to the Seller's Plant Description, the heading 2.1.(a) should be used. If necessary, further subheadings can be chosen by the Proponent, such as 2.1.a.1, 2.1.a.2, and so on. Proponents' cooperation in following this format will facilitate BC Hydro's evaluation of the received Proposals.
169. Regarding section 16.6 of the Specimen EPA, released on September 22, 2008, our understanding of the fundamentals behind calculating the "Gains, Economic Losses and Costs" is that the Terminating Party can recover the lost income resulting from termination of the EPA. In the case that the market situation does not allow the Terminating Party to obtain another EPA at the time of termination, will the Buyer pay to the Seller the present value of all lost income during the rest of the EPA term?
The last part of the question assumes the Seller is the Terminating Party in circumstances where the Seller is entitled to a Termination Payment from the Buyer. In that case, if the Seller can establish that the "Gains", as defined in subsection 16.6(f) of the Specimen EPA, are zero (e.g., the Energy previously contracted to BC Hydro has no value) then the Seller would be entitled to recover its "Economic Losses" as defined in subsection 16.6(f) of the Specimen EPA. See also Q&A No. 132 below. Proponents should seek their own legal advice concerning the interpretation and application of the Specimen EPA in various scenarios.
168. The following Q&As related to right of ways are posted on behalf of BC Hydro Properties. If you require further information, please contact BC Hydro Properties, Colleen Daher 604 623 3747 or BCTC Land Programs, Gary Holisko 604 699 7522.
Right-of-Way Q&As for the Clean Power Call [PDF, 32 Kb]
167. Will prices in the Standing Offer Program be updated prior to the award of the Clean Power Call EPAs next June?
Prices in the Standing Offer Program will not be modified prior to the award of Clean Power Call EPAs, currently scheduled for June 2009. As per the Standing Offer Program Rules, the prices are fixed for two years. The Standing Offer Program was launched in April of 2008, therefore it is anticipated that the prices will be re-evaluated sometime in the spring of 2010.
166. The definition of Force Majeure in the Specimen EPA has been changed compared to the F2006 Call and now includes a provision whereby a delay by the Transmission Authority in completion of Network Upgrades "is an event of Force Majeure". Subsection 16.1(c) of the Specimen EPA then gives BC Hydro the right to terminate the EPA if an event of Force Majeure exceeds 730 days. Our lenders are very uncomfortable that non-performance by BCTC (a common shareholder crown corporation) gives BC Hydro the right to terminate a contract at a point when the majority of the construction costs may have been committed and when the Proponent has much less ability to influence or cure the non-performance than BC Hydro. Please advise:
- Have we misinterpreted the Force Majeure clause in association with BCTC non-performance and the Subsection 16.1(c)?
Your interpretation of Force Majeure in relation to BCTC non-performance and section 16.1(c) is correct.
- Should we put forward our recommended changes to this section in a redlined version of the Specimen EPA, as an Essential Variation or a Value Variation?
It should be noted that section 5.8 of the Specimen EPA indicated that if the Estimated Interconnection Facilities Completion Date is later than 90 days prior to the Guaranteed COD, then the Guaranteed COD will automatically be postponed to the Estimated Interconnection Facilities Completion Date plus 90 days. This provision should reduce the risk of termination by BC Hydro. If the termination risk is still not acceptable to the project financers, a Proponent may propose either an Essential Variation or a Value Variation to the Specimen EPA.
- Is the Force Majeure definition and associated termination clause a "no go" zone as discussed at the October 23, 2008 Proponents' RFP Information Session, or as set out in Addendum 4?
The Force Majeure definition and associated termination clause are not a "no go" zone.
165. In Appendix 1, Page 13, of the Specimen EPA, section 108 shows Season 1 as commencing November 1. However, the table on Tab "item 13" of the Commercial Proposal (Schedule 9), shows Season 1 as commencing February 1. Please confirm which is correct?
The seasons as defined in the Commercial Proposal are correct, i.e., Season 1 commences on February 1. The definition of "Season" in the Specimen EPA will be amended prior to the award of any EPAs.
164. The Specimen EPA contains a "Note to Proponents" for section 3 that states that BC Hydro reserves the right to "extend the date for satisfaction or waiver of the regulatory condition." When does BC Hydro anticipate exercising such right? Is it safe to assume that the contract, when executed would provide well defined timelines for such approvals? If the period for BCUC acceptance were extended such that there was a material impact on the Seller's ability to achieve COD by the Guaranteed COD date and as a result, Seller's cost how would such changes be addressed?
The date upon which an EPA termination right arises for either party based on failure to secure BCUC Acceptance (as defined in the Specimen EPA) will be determined and adjusted, if necessary, prior to the execution of the EPA. Once the EPA is signed, that date cannot be adjusted, except by agreement of both parties to the EPA. Whether or not any adjustment to that date will be made prior to the execution of the EPA will depend on a number of factors, including the status of the regulatory process before the BCUC with respect to BC Hydro's 2008 Long Term Acquisition Plan. Any potential impacts arising from a change to that date will be assessed when, and if, this issue arises.
163. In its presentation at the Proponents' RFP Information Session on October 23, 2008, BC Hydro stated that it may use publicly-available information to assist in its risk assessment. Will BC Hydro assess publicly-available information about the Proponent or its Proposal beyond the November 25, 2008 submission deadline? If so, what cut-off time will BC Hydro use?
BC Hydro has the discretion to assess publicly-available information about the Proponent or its Proposal beyond the November 25 Proposal submission deadline, and throughout the evaluation process, if and when new information becomes available.
162. Due to current economic conditions and to the fact that all adjustments to Firm Energy in Appendix 3 to the Specimen EPA are calculated using CPI (as defined in the Specimen EPA), has BC Hydro considered the possibility of a negative CPI? Will there be a "floor" CPI? Will the inclusion of a floor CPI be considered by BC Hydro as an "Essential Variation" or a "Value Variation"?
Yes, BC Hydro has considered the possibility that CPI could be a negative value. There is no clause in the Specimen EPA that prevents the use of a negative CPI. A floor CPI can be proposed as a "Value Variation", but not an "Essential Variation".
161. Regarding securing financial resources, BC Hydro is asking for commitments from financial institutions and other institutions as part of the Proposal submission, not after receiving an EPA. This leaves the Proponent in a weak negotiating position on terms. It also reduces the opportunity to seek other sources of debt and equity after receipt of an EPA. How can we maintain financing options without prejudicing our project in the call process?
In the Project Description Requirements (Schedule 10), BC Hydro is requesting information that demonstrates there is a reasonably strong likelihood that a bidder can secure financing for their project if awarded an EPA. BC Hydro does not require the Proponent to have demonstrated support from only one financing source, nor does BC Hydro obligate the Proponent to use the financing source identified in its submission.
160. Regarding section 4.1 of the Specimen EPA, where are the "codes, standards and rules applicable to power plants in B.C." defined? Why doesn't this point to Good Utility Practice?
The Specimen EPA does not define the "codes, standards and rules applicable to power plants in B.C.". Proponents should obtain legal and technical advice to identify the applicable codes, standards and rules. The requirement to design, engineer, construct and commission the Seller's Plant in accordance with "Good Utility Practice" is contained in subsection 4.1(a) of the Specimen EPA. "Good Utility Practice" is part of the definition of "Project Standards". "Good Utility Practice" is defined by reference to practices of the electric utility industry, generally in the WECC. However, as the Seller's Plant will be constructed in British Columbia, it is important to ensure that the equipment and material installed in the Seller's Plant meets the codes, standards and rules applicable to power plants in British Columbia.
159. Subsection 11.2 (b) of the Specimen EPA calls for resuming Energy delivery after a non-Major Damage within 365 days. What if we are able to deliver only a small percentage of our Energy capacity - will this trigger us into a non-Major Damage situation or be enough to end a non-Major Damage situation?
Non-Major Damage is damage to a Seller's Plant that is not considered Major Damage, as defined in Appendix 1 of the Specimen EPA. If the Seller's Plant is only able to deliver a small percentage of the plant's Firm Energy commitment due to damage to the plant, then either a Major or non-Major Damage situation is triggered depending on the repair cost. Once a non-Major Damage situation is triggered, the Seller needs to restore the plant to at least the condition that the plant was in immediately prior to the damage. This would mean that if the Seller's plant is only capable of delivering a portion of the energy that it was delivering prior to the non-Major Damage situation, then the non-Major Damage situation has not ended.
158. Section 5.6 of the EPA says that Buyer shall have no liability for delays in completion of Network Upgrades or any other work undertaken by the Transmission Authority. Our financers will be unlikely to fund a project where there is no certainty with respect to the scheduling of the Network Upgrades, especially when delays could result in termination of the EPA. What can be done?
Under subsection 16.1(b) of the Specimen EPA, a Seller has 365 days plus up to 180 Force Majeure Days before BC Hydro's right to terminate the EPA arises. In Appendix 1 of the Specimen EPA, the definition of "Force Majeure" (item f) includes the inability of the Seller to achieve COD as a result of a delay by the Transmission Authority in completing Network Upgrades provided the delay is not attributable to the Seller. This would suggest that the Network Upgrades can be delayed by up to 545 days before there is a risk of EPA termination. In the event that the Seller's Plant is 80% complete, the Seller has an extra 180 days for a total of 725 days before the termination right takes effect.
It should also be noted that in section 5.8 of the Specimen EPA, if the Estimated Interconnection Facilities Completion Date is later than 90 days prior to the Guaranteed COD, then the Guaranteed COD will automatically be postponed to the Estimated Interconnection Facilities Completion Date plus 90 days.
If this termination risk remains unacceptable, the Proponent may propose a variation to the Specimen EPA.
157. Regarding section 16.1 of the Specimen EPA, a Proponent who is intending a COD of 2016, but not starting construction until 2014, will likely not have all of its land tenures (i.e., Material Permits) in place by the third anniversary of the execution date, and thereby face termination. Is this your intent?
As background, the intent behind allowing a Commercial Operation Date as late as November 1, 2016 was to enable larger, more complex projects with longer construction periods to participate in the Clean Power Call. Section 16.1 of the Specimen EPA gives BC Hydro the right, not the obligation, to terminate an EPA if Material Permits are not in place by the third anniversary of the EPA execution date. It is BC Hydro's expectation that the Proponent will sufficiently progress the project such that the proposed COD can be met.
156. Is it correct to assume that BC Hydro is indifferent to whether a Proponent selects Option "A" or "B" for Non-Firm Energy pricing? If BC Hydro is contemplating a revision to Option "A" pricing, when will such pricing be made available to Proponents?
With respect to the evaluation of the Proposals, BC Hydro is indifferent as to whether a Proponent selects Option A or Option B for the Non-Firm Energy pricing.
Further to the request made at the October 23, 2008 Information Session to revise the Option A pricing table for Non-Firm Energy, BC Hydro will not be revising this pricing table. Energy price and currency exchange forecasts are expected to continue to fluctuate throughout the term of a potential EPA. The Option B Non-Firm Energy pricing option is available to those Proponents preferring pricing reflective of actual energy prices and currency exchange rates.
155. Will BC Hydro accept new information about a project after the Proposal submission date (e.g., if an outstanding water licence is obtained, can that information be provided to BC Hydro)?
BC Hydro recognizes the importance of ensuring that information that is material to making EPA award decisions is current and will provide an opportunity to confirm this information during the post-Proposal process.
154. Are the Force Majeure provisions a "no-go zone"?
Force Majeure provisions are not a "no-go zone". In other words, Proponents may propose either Essential Variations or Value Variations with respect to the Force Majeure provisions.
153. In proposing a variation, we understand that a red-lined Specimen EPA is to be submitted to clearly identify the contract changes contemplated. Is it required or would it be helpful for the Proponent to also include an associated Commercial Proposal for a Value Variation that reflects the price benefits and any changes to the Firm Energy profile?
Yes, it would be helpful to also include any documents that could improve BC Hydro's understanding of the reasons, need for and benefits of the variation(s).
152. When will the "substantive changes" contemplated by the Specimen EPA Adaptations Guide be made to the EPA? What will be the process for arriving at a definitive EPA reflecting the changes contemplated? What role will the Proponent have in establishing the appropriate or necessary adaptations
As part of the Proposal submission process, Proponents have the opportunity to submit a Variations Proposal, describing proposed Essential Variations and/or Value Variations to the Specimen EPA for BC Hydro's consideration. BC Hydro may choose to accept, reject, or modify these variations. Following proposal submission, BC Hydro may provide to the Proponent project-specific adaptations to the Specimen EPA for the Proponent's consideration
151. Under section 5.8 of the Specimen EPA, we understand that if the interconnection facilities are completed late, the Seller is relieved of its obligation to achieve COD by the Guaranteed COD only if the Estimated Interconnection Facilities Completion Date is later than 90 days prior to the Guaranteed COD and that in such cases the Guaranteed COD is extended to a date 90 days after the interconnection facilities are estimated to be complete. If we require that the interconnection facilities be completed approximately two years prior to our COD to allow for proper installation and commissioning of equipment, we could be placed in an untenable position if there is a significant delay in the scheduled completion of the interconnection facilities and we are not provided with the time reasonably required to achieve COD.
Assuming the project is a phased project, the Proponent could request, as an Essential Variation, that the target In-service Date for the first phase, rather than the Guaranteed COD, be extended to a date that is 90 days after the Estimated Interconnection Facilities Completion Date in the Final Interconnection Study Report, if that date is later than 90 days prior to the In-service Date of the first phase. In addition, the Proponent could request that the target In-service Dates of any subsequent phases, including Guaranteed COD, be extended by the same number of days.
150. Is there an internal BC Hydro deadline at which no further edits/changes to the Specimen EPA or any other Clean Power Call-related documents will be made?
BC Hydro has not set a deadline beyond which no further changes will be made to the RFP documents. However, BC Hydro recognizes the need to give Proponents reasonable notice of any changes to the RFP documents in advance of Proposal submission to facilitate Proposal preparation.
149. What amount of Consumer Price Index escalation will BC Hydro use when evaluating project submissions?
BC Hydro will use its most current forecast for the CPI, available at the time of Proposal evaluation. Currently, BC Hydro's forecast for the CPI is 2.1% per year.
148. Subs ection 21.2 (f) of the Specimen EPA does not allow for disclosure to lenders, which will be necessary.
Subsection 21.2(i) authorizes disclosure with the consent of BC Hydro. If a Seller wants to disclose Buyer Confidential Information to a lender, then the Seller can seek BC Hydro consent.
147. C ould the definition of COD Certificate be modified to say "to the satisfaction of the buyer, acting reasonably"? As it is currently written, it gives the Buyer the right to refuse unreasonably.
The concept of "reasonableness" is already included in the definition. The definition requires that the certificate be "completed and accompanied by attachments reasonably satisfactory to the Buyer".
146. Regarding section 9.1 of the Specimen EPA, why do we have to lease this equipment from BC Hydro? Can there not also be an option to purchase?
BC Hydro leases the metering equipment to Sellers, because the meters must be revenue grade and must be maintained by BC Hydro for billing purposes. If a Proponent would like to purchase its own meter, it could be proposed as a variation to the Specimen EPA.
145. Will there ever be a firm cap with respect to the cost of Interconnection Network Upgrades, or are the CIS and ISA terms in Appendix 3 of the Specimen EPA designed to account for this?
BC Hydro pays for the cost of Interconnection Network Upgrades. However, a Proponent is expected to pay for the Cost of Interconnection Security (CIS) with the Interconnection Security Amount (ISA) set equal to the estimated Interconnection Network Upgrade cost in the Final Interconnection Study Report. To compensate for the CIS, a Proponent may quote a $/MWh amount for each one million dollars of the Interconnection Security Amount. Please refer to related Q&As for an example.
144. Regarding Appendix 3 of the Specimen EPA:
Where did the values used in the NFEPa table come from? Why do they decrease then increase rather than steadily escalating?
The values in the Non-Firm Energy Pricing Option A table represent BC Hydro's projection of the electricity prices at the BC border. The values do not escalate steadily, because the assumptions and data used in the price projection do not escalate at a steady rate.
In section 3.3, do NFEPPa and NFEPPb have to sum to 100%? Is this stated anywhere?
NFEPP a and NFEPP b must add up to 100%. This requirement is stated in Item 9 of the Commercial Proposal (Schedule 9).
143. It seems as though there are two types of Network Upgrades i.e., Interconnection Network Upgrades and Transmission Network Upgrades. The Specimen EPA says that BC Hydro will pay for Interconnection Network Upgrades. Transmission Network Upgrades are defined as being "for the general benefit of all users of the transmission system" -- this seems more like what BC Hydro would pay for. Who pays for these Transmission Network Upgrades? Should section 4.4 of the Specimen EPA use the term "Transmission Network Upgrades" instead of "Interconnection Network Upgrades"?
BC Hydro pays for both the Interconnection Network Upgrades and the Transmission Network Upgrades. However, the Seller is responsible for the interconnection costs on the Seller's side of the Point of Interconnection.
142. Regarding subsections 6.5(h) and 6.5(i) plus sections 8.4 and 8.5 of the Specimen EPA, the reporting requirement is not yet defined. Will BC Hydro reimburse the Seller for the costs of this reporting to limit the risk to the Seller?
With respect to subsections 6.5(h) and 6.5(i) of the Specimen EPA, the costs of this reporting in excess of that required by law will be to the Seller's account. With respect to sections 8.4 and 8.5 of the Specimen EPA, the Buyer will be responsible for the costs of certification if requested by the Buyer, unless the certification is required for the project to be classified as Clean or Renewable Electricity.
141. The Specimen EPA does not provide for any "Change in Law" events. Will laws be grandfathered throughout the term of the EPA? On what date will they be grandfathered?
The EPA will not provide for the "grandfathering" of laws.
140. What minimum levels of reliability and availability satisfy the BC Hydro requirement of "Good Utility Practice"?
BC Hydro has not identified minimum levels of reliability and availability for the purposes of defining "Good Utility Practice". The definition of "Good Utility Practice" in Appendix 1 to the Specimen EPA refers to "practices, methods and acts engaged in or approved by a significant portion of the electric utility industry in the WECC region . . . " The term is therefore focussed on how something is done rather than on achieving specified performance levels. This is consistent with the various uses of the term in the Specimen EPA (e.g., scheduling Planned Outages, development of an Annual Operating Plan, records maintenance, and general operation and maintenance). In summary, the Specimen EPA does not specify reliability or availability standards. The Seller's obligation is to deliver the Firm Energy amount consistent with Good Utility Practice.
139. The RFP for the Clean Power Call limits projects to those with more than 25 GWh per year of Firm Energy and the Firm Energy amount is reviewed and reset every five years. What is the consequence, if any, to a project which anticipates more than 25 GWh per year when it submits its Proposal, but the actual firm energy during the five-year period is less than 25 GWh/year?
The RFP process includes a risk assessment component. As part of the risk assessment, BC Hydro will be assessing the energy delivery risk for each project, based on a review of the historical energy resource data submitted for the project. If a Proponent proposes Firm Energy quantities that are greater than those supported by the data, then this would be reflected in BC Hydro's risk assessment and may impact the likelihood of an EPA award.
138. In item 4 of the General Instructions of the Project Description Requirements (Schedule 10), you ask for the Exhibits to be numbered sequentially. Would it be acceptable to use a letter system (a,b,c…) or is numbering mandatory?
Yes, it is acceptable to use a letter system to label any exhibits to the Project Description. However, for the Project Description document itself, BC Hydro strongly encourages Proponents to follow the numbering system and the headings as set out in item 3 of the General Instructions.
137. If the proposed Point of Interconnection is a BCTC substation, which will require a bus extension and additional circuit breakers, disconnects, arrestors and protection equipment to terminate a Proponent's transmission line, is this part of the TPIF?
All such upgrades inside a substation are considered a Network Upgrade (NU).
136. Subsection B(c) of the Energy Source Data Requirements (Schedule 11) asks for "a table showing monthly data recovery rates and measured means for all monitoring stations employed in the assessment". Does "means" refer to "mean wind speeds" or to some other "means"?
"Means" refers to averaged values. Monthly averaged values should be presented for wind speeds, as well as for other variables measured at the monitoring site (e.g., temperature, relative humidity, etc.). Average values for wind direction are not required.
135. Can you please confirm that in the case of phased projects, in the definition of "Firm Energy Adjustment Anniversary", the reference to "COD" means COD of the final phase of the project? In the Specimen EPA the "Firm Energy Adjustment Anniversary" is defined as " the fifth anniversary of the date immediately following the end of the first four complete Seasons after COD and the anniversary of such date that occurs at the end of each five year period thereafter".
Confirmed - the reference to "COD" means the COD of the final phase of the project.
134. Can you please confirm that in the case of phased projects the LDs will not be payable until the period of four consecutive complete Seasons after the COD of the final phase of the project? Section 13.2 of the Specimen EPA states that LDs will be payable with respect to shortfalls in "any full Season after the expiry of four consecutive complete Seasons following COD". However, the Specimen EPA Adaptations Guide states that for phased projects "Liquidated damages for Firm Energy delivery shortfalls will apply after the first phase achieves its In-service Date, by reference to the initial phase or to the merged and consolidated Firm Energy profile applicable at the time of the shortfall".
If a project is a phased project and the energy delivery is seasonally firm, any delivery shortfall LDs will not be payable until after four complete Seasons following COD, i.e., the In-service Date for the final phase of the project, as is the case with non-phased projects. However, when an interim phase meets the in-service requirements, LDs for any Firm Energy delivery shortfalls will apply immediately.
133. Regarding section 21.3 of the Specimen EPA , what is the limitation on non-disclosure under the " Freedom of Information and Protection of Privacy Act"
Section 21.3 of the Specimen EPA acknowledges that BC Hydro is subject to the Freedom of Information and Protection of Privacy Act (FOIPPA), which is a statute of the Province of British Columbia affording the public access to information held by government and other public sector entities, including BC Hydro. FOIPPA includes some exceptions to access rights. Proponents should obtain their own legal advice regarding FOIPPA and its application to information provided to BC Hydro in the course of the RFP process.
132. Regarding section 16.6 of the Specimen EPA , the calculation method for "Gains, Economic Losses and Costs" seems vague. Could you provide a sample calculation and detailed guidelines/principles of this calculation?
Section 16.6 applies if the EPA is terminated by the Seller for a "Seller Termination Event" (e.g., non-payment or material default). Section 16.6 also applies if the EPA is terminated by BC Hydro for certain specified events (see subsections 16.1(a), (b) or (e)), and the BC Hydro's loss is less than the amount of the Performance Security.
Section 16.6 essentially reflects a calculation of the loss suffered by the terminating party as a result of being denied the net benefit, if any, of the EPA over the balance of the Term of the EPA. This loss is calculated as the present value of the economic loss sustained as a result of the termination, less the present value of the economic benefit, if any, realized as a result of the termination of the EPA, in each case determined in a commerically reasonable manner. In the case of a Seller terminating the EPA, normally, this involves comparing the present value of the cash flow expected over the balance of the Term to the cash flow that could be realized under a replacement contract entered into at that the time of termination, adjusted for differences in the product, terms and conditions, and other relevant non-comparable elements. Transaction and like costs are essentially added to the loss. It is not necessary that a replacement contract actually be placed, and the calculation can be made on the basis of evidence available as to market conditions.
To take a simple example, if a Seller properly terminates a 20-year EPA for BC Hydro material default after 12 years, and a replacement contract can reasonably be expected to be placed for the balance of the Term, but at a lower price, the Seller will suffer a loss. This loss could be calculated as the present value of the remaining expected cash flow that would have been realized under the last 8 years of the EPA Term, and the present value of the cash flow available under a replacement contract, adjusted for differences as indicated above, plus transaction costs.
The provisions of section 16.6 are similar to those found on many long-term power purchase agreements relative to early termination for default.
131. Regarding section 8.4 of the Specimen EPA, how much does it cost to obtain "EcoLogo Certification"? What is the procedure for the Seller to obtain EcoLogo Certification?
The Proponent should contact the EcoLogoM program for further information.
130. Regarding section 6.9 of the Specimen EPA, what is "Planned Islanding Capability"? What is the effect of "Planned Islanding Capability" certification?
The Proponent should refer to Appendix 1 of the Specimen EPA for the definition of "Planned Islanding Capability". Section 6.9 of the Specimen EPA provides BC Hydro with the right to request the Seller to provide the information and cooperation required to undertake studies to determine whether the Seller's Plant could provide Planned Islanding Capability and, if so, at what cost. If BC Hydro decides that the Seller's Plant is deemed to be a good candidate for providing "Planned Islanding Capability", then there is an obligation for the two parties to negotiate in good faith the terms and conditions on which the Seller would provide such capability.
129. Regarding subsection 6.5(g) of the Specimen EPA, what kind of information does the Buyer require from the Seller regarding "Clean or Renewable Electricity"?
Subsection 6.5(g) of the Specimen EPA is intended for projects that are classified as clean or renewable by reference to the type of fuel used by these projects in generating electricity. An example would be a thermal generating facility that uses biomass as its fuel source. If the facility has the ability to fuel switch between biomass (a clean fuel) and diesel oil (a non-clean fuel), BC Hydro may request information that verifies that the output from the facility qualifies as Clean or Renewable Electricity.
128. Regarding subsection 5.2(d) of the Specimen EPA:
- What is the "Declaration of Compatibility-Generator (Operating)" issued by BCTC? What is the procedure for the Seller to obtain that certificate?
- What is "the registration by the Seller with Measurement Canada"? What is the procedure for the Seller to register?
(i) The Proponent should consult with BCTC to determine the procedures for obtaining the "Declaration of Compatibility-Generator (Operating)" certificate.
(ii) The Proponent should consult with Measurement Canada to determine the procedures and requirements for registering as an electricity seller.
127. Regarding section 3.4 of the Specimen EPA, what kind of effect does "Exemption" under Section 71 of the UCA have? What is the procedure for the Seller to obtain this "Exemption"? Is this "Exemption" the same as the exemption from regulation as a "public utility" stipulated in Section 6.7?
The Exemption referenced in Section 3.4 of the Specimen EPA refers to a lawful exemption made by the Minister of Energy, Mines and Petroleum Resources. Pursuant to section 22 of the amended Utilities Commission Act ("UCA"), the minister, by regulation, may exempt eligible parties from any or all of section 71 and the provisions of Part 3 of the UCA. If a ministerial Exemption is granted with regard to section 71 of the UCA, an EPA under the Clean Power Call would not have to be filed with the BCUC for acceptance as an Energy Supply Contract pursuant to section 71 of the UCA.
The Exemption referred to in section 3.4 of the Specimen EPA is not the same as the exemption referenced in section 6.7 of the Specimen EPA. The former deals with the filing of EPAs pursuant to section 71 of the UCA, whereas the latter deals with being classified as a "public utility" and therefore subject to the provisions of Part 3 of the UCA (i.e., sections 21 to 64 inclusive). Generally, IPP developers who enter into EPAs with BC Hydro are exempt from Part 3 of the UCA, due to the issuance of Minister's Order No. M-22-0205 dated June 6, 2002.
126. What does BC Hydro specifically prohibit by the clause on page 3 of Addendum 4, which states, "BC Hydro will not consider and may disqualify Proposals containing Essential Variations to the Specimen EPA, which....consist of "Dispatch Rights", that is the right of BC Hydro to dispatch generation at the Proponent's plant, or "Residual Rights Offers", that is Proposals of the type described in section 13."?
BC Hydro does not wish to consider "Dispatch Rights" and "Residual Rights Offers" as Essential Variations, as they would form part of the base Proposal. BC Hydro is interested in receiving proposals on "Dispatch Rights" and/or "Residual Rights Offers" as Value Variations, so that the merit of these Proposals can be evaluated and BC Hydro can either choose to accept or not accept them.
125. Does the submission of a Proposal create a binding legal obligation on the Proponent? If not, when are binding legal obligations created under the RFP process?
As indicated in section 16 of the RFP, a Proposal is an offer to BC Hydro to enter into an EPA in the form of the Specimen EPA, with variations, if any set out in the Proposal, and otherwise at the price and on commercial terms set out in the Commercial Proposal, which forms part of the Proposal submission. Unlike most tender processes, under the RFP, Proposal or bid security is not required, and a Proposal can be withdrawn by the Proponent at any time before a final EPA is signed and delivered by the Proponent and BC Hydro. However, Proponents should note that if a Proposal is withdrawn, it cannot be resubmitted in the same or an amended form under the RFP and the Proponent's registration in respect of the associated project will be cancelled. The RFP also provides that no legal obligations or liabilities whatsoever will be created or arise between BC Hydro and any Proponent unless and until a final EPA is fully signed and delivered, the only exception being obligations and liabilities under the Confidentiality and Compliance Agreement required upon registration.
The foregoing reflects BC Hydro's preference that, given the expected participation in the RFP process, so far as possible, Proposals will be compliant with the RFP, including Proposal requirements, and sufficiently clear and complete that an EPA can be awarded and signed with little or no discussion required.
Based on the foregoing, the submission of a Proposal does not create an irrevocable binding obligation on the Proponent unless and until it is accepted by BC Hydro and both parties have signed and delivered a final EPA.
124. With reference to Section B of the Energy Source Data Requirements (Schedule 11):
B(a): Will BC Hydro accept the raw wind data on CD? If not, how would BC Hydro like this data to be delivered?
Yes, Proponents can provide the data on a CD-ROM rather than as part of the hard copy, where it is more reasonable to do so. In such case, Proponents should clearly identify in the body of their Energy Source Data document what data is available in soft copy only. Proponents are encouraged to provide energy data files in MS Excel format wherever possible.
B(e): For projects with more than 12 months of on-site wind data, is it a material requirement of submission that at least 10 years of correlated data be provided, even if the independent wind energy consultant has identified a better correlation with off-site data that is less than 10 years in duration? Would less than 10 years of correlated data be considered a material default that would make a proposal non-compliant, or would this be acceptable but be considered in the risk assessment?
Providing less than 10 years of off-site reference data will not make a Proposal non-compliant. However, it will be considered in the risk assessment if it is not sufficiently demonstrated that the available reference data represents long-term wind speed values. The Proponent should also refer to the "Purpose" section on page 1 of Schedule 11.
B(h): For the detailed topographic map, is a PDF document sufficient or does BC Hydro require shape files or any other GIS data?
Iit is sufficient to provide the detailed topographic map of the project area in a PDF document.
B(k): Are all P-estimates (P50, P70, P75, P80, P85, and P90) required for each period (hourly or seasonal), or is it acceptable for a proponent to provide only the P-estimates they have utilised in the calculation of firm energy delivered? It is very onerous to provide a set of six P-estimates for every hour of the year.
The P-estimates should be provided for the Firm Energy profile offered in the Commercial Proposal. For example, if a seasonally Firm Energy profile is being proposed in the Commercial Proposal, then the P-estimates should be presented on a seasonal basis, as described in Item 13 of Schedule 9. If an hourly Firm Energy profile is being proposed in the Commercial Proposal, then the P-estimates should be presented on an hourly basis, as shown in Item 12 of Schedule 9.
123. Referring to Q&As No. 112 and 113, can you please clarify whether the Firm Energy Amount will or will not be "phased out". Using the example provided, and assuming a 20- year term is proposed, this would mean the EPA would expire on December 31, 2033. Further, assume that the application of section 7.10 of the Specimen EPA does not result in any adjustment to the Firm Energy Amount whatsoever at any time during the term of the EPA. On January 1, 2032 (20 years plus 1 day after the COD of phase 1), would the Firm Energy Amount be 400 GWh/year or something less to recognize the fact that phase 1 has been operating for greater than 20 years. If it is less than 400 GWh/year, how would the revised Firm Energy Amount be calculated?
Firm Energy Amounts in a phased project will not be "phased out". In the example discussed in Q&As No. 112 and 113, the Firm Energy Amount that is applicable when the last phase of the project is in-service, i.e. at project COD, is 400 GWh/year. This Firm Energy Amount will be in effect for the entire 20 years after COD. If a Proponent requires the Firm Energy Amounts in a phased project to be "phased out" due to, for example, mechanical limitations of the generating equipment, then the Proponent could propose this change as an Essential Variation.
122. With reference to section 5.8 of the Specimen EPA dated September 22, 2008, how are Proponents to secure binding agreements for turbine supply for a particular year in their Proposal submission if the actual COD (as opposed to the Guaranteed COD) is dependent on the Estimated Interconnection Facilities Completion Date provided by BCTC, and this date will not be established until after submission of the proposals in November 2008?
The challenges associated with securing agreements for long lead items within a project development schedule exist both within and outside of the Clean Power Call process. There are a number of possible mechanisms that a Proponent may wish to consider to address this uncertainty, including, but not limited to, including a contingency in the bid price (either as part of the base Proposal or a Value Variation), proposing a conservative Guaranteed COD date, and/or negotiating more flexible contract terms with suppliers. Proponents should also familiarize themselves with the exact requirements around such agreements in the RFP documents.
121. Scenario: A Proponent intends to propose a Project of a certain MW capacity (e.g. 100 MW) as the "base proposal". The Proponent would also like to propose, as an option, a potential expansion (e.g., +20 MW) to the capacity of the base Project, resulting in an overall larger capacity Project (e.g., 120 MW). The capacity expansion would require additional assets and would be in excess of the 10% increase limit set under section 4.5 of the Specimen EPA. The expansion capacity would occupy physical space adjacent to but separate from the physical space occupied under the "base proposal". All would fall within the same overall area covered under the Project Permits.
Given the criteria for "Multiple Proposals / Projects from a Single Proponent" in Section 15 (page 12) of the RFP and the clarification provided in Addendum 1, Item 3, which of the following is the appropriate way to submit this expansion option?
- A Value Variation to the "base proposal" within a single Proposal submission for a Project. The Value Variation would provide a revised Firm Energy table and would require that the final EPA designate a different Firm Energy table in Appendix 2 from that which would be provided in the Proponent's submitted Commercial Proposal (completed Schedule 9 of the RFP).
- A separately submitted "contingent" Proposal for the expansion capacity (e.g. the 20 MW addition).
- A separately submitted, "mutually exclusive" Proposal for the overall expanded capacity (e.g. 120 MW) as a separate Project.
Also, could you please confirm that under the OATT requirement for a CEAP Interconnection Request to BCTC (i) the "base capacity" and (ii) the "overall expanded capacity" resulting from the expansion option would need to be submitted as two separate Interconnection Requests?
A "base proposal" for a 100 MW plant capacity, with an associated Firm Energy profile and Firm Energy Price, and a Value Variation offering expanded capacity of an additional 20 MW and a replacement Firm Energy profile and Firm Energy Price covering the entire 120 MW Project, is considered one Proposal. This approach gives BC Hydro the right to accept the "base proposal" only, or the "base proposal" as modified by the Value Variation. In either case, only one EPA is awarded. This approach should be used if the "base proposal" capacity can stand alone, but the "base proposal", as modified by the Value Variation (i.e., larger capacity, single consolidated Firm Energy profile and single Firm Energy Price) offers the best value to BC Hydro.
A separate Proposal for the expansion capacity, designated as "contingent" on an EPA award for the "base proposal" means that BC Hydro may accept the "base proposal" only, or both the "base proposal" and the contingent expansion capacity Proposal, but as these are two separate proposals, the contingent expansion capacity Proposal must have its own separate Firm Energy profile and Firm Energy Price applicable only to the expansion capacity. Also, if both Proposals were successful, two EPAs would be awarded - one for the "base proposal" and one for the contingent expansion capacity. This approach should be used only if the "base proposal" capacity and the expansion capacity can each stand alone as separate projects, with separate EPAs, but the Proponent would not proceed with the expansion capacity Proposal unless the "base proposal" is accepted.
A "base proposal" and a separate Proposal for the expansion capacity, with both designated as "mutually exclusive", means that BC Hydro may accept the "base proposal" or the expansion capacity Proposal, but not both. A single EPA for the successful Proposal would be awarded. This approach should be used only if the "base proposal" capacity and the expansion capacity can each stand alone as separate projects with separate EPAs, but the Proponent is able to proceed with only one, but not both, Projects.
The Proponent may file an interconnection request based on 120 MW (i.e. "base proposal" capacity plus the expansion capacity), in which case a single study will be prepared. However, this could result in the estimated interconnection costs for the "base proposal" being overstated, thereby affecting its competitiveness in the evaluation. This risk can be avoided by filing two interconnection requests - one for the "base proposal" capacity, and a second for 120 MW.
120. Referring to subsection 8.4 of the Specimen EPA, in a situation where obtaining EcoLogo M Certification will cause the Seller to incur additional costs (not identified in this subsection) or results in a reduction in generation, will BC Hydro pay for the additional costs or provide compensation for the reduction in generation?
If BC Hydro requires the Seller to obtain EcoLogo M Certification, BC Hydro will compensate the Seller for the additional costs associated with the certification unless the Seller is required to obtain EcoLogo M Certification in the first place in order for the energy from the project to qualify as Clean or Renewable Electricity, in which case the Seller will be responsible for the costs.
119. Subsection 16.6(a) of the Specimen EPA states that "contract quantities" will be used to determine the Terminating Party's Gains, Economic Losses and Costs. Please clarify whether "contract quantities" refer to Firm Energy only or total energy (i.e. Firm Energy and Non-Firm Energy). If "contract quantities" refer to Firm Energy only, please explain why total energy is not used, particularly if the Seller chooses Option A for the price of Non-Firm Energy.
The "contract quantities" refer to Firm Energy only, as delivery of Non-Firm Energy is uncertain and there is no penalty associated with the non-delivery of Non-Firm Energy. Selecting Non-Firm Energy Pricing Option A implies only that if Non-Firm Energy is delivered, the Seller will know the price it will receive.
118. The Specimen EPA states in subsection 14.2(b) that the Interconnection Security is to be returned to Seller, "…on the earlier of: (i) the fifth anniversary of COD;" or, "(ii) the end of any four consecutive full Seasons in which the Seller has delivered an amount of Firm Energy not less than 95% of the Annual Firm Energy Amount for that four Season period,...".
The Specimen EPA, Appendix 3, Section 3.1 states that the Cost of Interconnection Security ("CIS") will be added to the post-COD Firm Energy Price and the sum will form the basis for the Escalated Firm Energy Price for the entire term of the EPA.
Will the Escalated Firm Energy Price include an amount for the CIS for the entire term of the EPA? For greater clarity, if the Interconnection Security is returned in full at some point no later than COD + 5 years, is the CIS still included in the Escalated Firm Energy Price from that point forward?
A Proponent is expected to include the cost of obtaining Interconnection Security in its Firm Energy Price. Since the amount of the Interconnection Security will be set at the estimated cost of the Interconnection Network Upgrades provided in the Final Interconnection Study Report and this study will not be commissioned until after EPA award, BC Hydro has introduced the concept of a Cost of Interconnection Security (CIS) that the Proponent may elect to submit in its Proposal. The CIS represents a $/MWh amount per one million dollars of the Interconnection Security Amount that would be permanently added to the offered Firm Energy Price.
By way of example, if a Proponent submits a Firm Energy Price of $80/MWh and a CIS of $0.30/MWh per one million dollars of the Interconnection Security Amount, and the Interconnection Security Amount is $2.5 million, then the total firm energy price would be $80/MWh + $0.3/MWh * 2.5 = $80.75/MWh for the term of the EPA.
117. How is the Cost of Interconnection Security (CIS) used, if at all, in calculating the levelized Firm Energy Price? If it is used in the example calculations provided in "Sample Calculations – Updated Price Levelization Model" posted on September 22, 2008, the inclusion of the CIS is not obvious.
In calculating the levelized Firm Energy Price for evaluation purposes, the Firm Energy Price that will be used in the calculation will be the sum of the offered Firm Energy Price plus the product of the CIS multiplied by 150% of the estimated cost of the Interconnection Network Upgrades from the initial interconnection studies (i.e. the Feasibility Interconnection Study in the case of Transmission System-connected projects and the Preliminary Interconnection Study in the case of Distribution System-connected projects), which will be issued after Proposal submission, but before EPA award.
116. It was stated that two individual projects (same Proponent) using a single transmission line and interconnection point could be considered a single project and receive one EPA. Could that or would that be a single bid submission or would it need to be two separate submissions that were labelled co-dependent?
The Proponent should submit one proposal if the intention is to have both projects under the same EPA. However, if the intention is to have separate EPAs for the two projects, then the Proponent should submit the projects as separate Proposals. The two Proposals should be labelled as co-dependent, if BC Hydro may accept both, but not less than both, of these Proposals.
115. Will BC Hydro accept two-tiered pricing similar to the F2006 Call? Could two-tiered pricing be attached as an option? If BC Hydro accepts two-tiered pricing will it provide an adjusted bid price calculation?
BC Hydro will accept a two-tiered pricing structure as a Value Variation, but not as an Essential Variation. BC Hydro is not planning to post sample calculations of the adjusted bid price for specific types of Value Variations, including those involving changes to the pricing structure described in the Specimen EPA.
114. Subsection 6.2(b) of the Specimen EPA states that, "...the Seller shall make commercially reasonable efforts to operate the Seller's Plant in a manner that ensures delivery of Energy at the POI at a uniform rate within each hour during which Eligible Energy is delivered." Certain projects, especially wind projects, intending to bid seasonally Firm Energy profiles will not have the capacity to control the delivery of energy at uniform hourly rates. Will the adaptations anticipated in the Specimen EPA Adaptations Guide with respect to wind projects remove or modify this EPA requirement?
If, for example, by the nature of the energy source or commercially available, proven technology, a project is unable to deliver energy at a uniform rate within each hour, then it is not expected to meet this requirement. The Proponent has an obligation to use commercially reasonable efforts to deliver energy at a uniform rate within each hour to the extent that the energy source, such as wind or water, would allow.
113. The Specimen EPA Adaptations Guide provides guidance as to how the "...Firm Energy profiles will be merged and consolidated with the profiles of preceding phases..." with respect to the In-service Dates of the various phases. Please provide guidance as to how the Firm Energy profiles of the different phases will be "phased out".
Using the example provided in Q&A 112, the Firm Energy profile will be 100 GWh/year from January 1, 2012 to January 1, 2014. On January 1, 2014, the two Firm Energy profiles will be merged such that the Firm Energy profile going forward will be 400 GWh/year. Note that in the Commercial Proposal, Proponents are required to submit Firm Energy profiles for each phase that represent the incremental energy associated with that phase (i.e., not the cumulative energy associated with prior phases).
112. The Specimen EPA Adaptations Guide states that for a Phased Project the "...Firm Energy Prices will be blended with the Firm Energy Prices of the preceding phases, so that one Firm Energy Price will apply until the next phase achieves its "In-service Date". How will the post-COD escalation apply to determine the effective Firm Energy Price? Will (a) the Firm Energy Price of each of the different phases be escalated annually and blended to determine the effective Firm Energy Price or (b) the "blended" Firm Energy Price be escalated to determine the effective Firm Energy Price or (c) some other method?
By way of an example, assume a project has two phases. Phase 1 has an expected in-service date of January 1, 2012 and an annual Firm Energy commitment of 100 GWh/year, and phase 2 has an expected in-service date of January 1, 2014 (which is also the Guaranteed COD) and an annual Firm Energy commitment of 300 GWh/year (i.e., incremental to phase 1). Further assume that the actual in-service dates are the same as the expected in-service dates.
In this example, on January 1, 2014, the Firm Energy price of phase 1 will have attracted three years of pre-COD escalation (i.e., from January 1, 2009 to January 1, 2012) and two years of post-COD escalation and the Firm Energy Price of phase 2 will have attracted five years of pre-COD escalation. On January 1, 2014, these two prices will be blended on a 25/75 basis, and going forward the blended price will escalate at the post-COD escalation rate.
111. Can you confirm that the Losses have been embedded in the Option A and Option B Non-Firm Energy prices as listed in the sample calculations for seasonal energy payments?
Yes, it should be assumed that the loss factor described above has already been embedded in the Non-Firm prices used in the sample calculations in the Seasonal Energy Payments spreadsheet issued August 15, 2008 on the RFP Website.
110. In the Specimen EPA, under subsection 13.2(c) and section 3.3 of Appendix 3, Losses have been identified to be 6.28%. Will 6.28% be used for determining the LD Factor and the Non-Firm Energy price for all projects regardless of their location. Will 6.28% be used for Losses to determine the adjusted Firm Energy Prices for all projects or will the Losses be project-specific? Given that the line Losses directly impact a project's forecast revenues (through the [1-L] term applied to the Non-Firm Energy price), can BC Hydro provide some direction on the Losses that will be applied on a regional basis prior to Proposal submission?
Loss factors represent the incremental losses on the BC Hydro system associated with absorbing energy from a particular generator and typically vary from project to project. However, the results from the project-specific loss studies initiated by BC Hydro with BCTC for the Clean Power Call projects will not be available until well after Proposal submission.
A concern raised by several registered Proponents is that it would be difficult to establish at the time of Proposal submission, a Firm Energy Price without knowing what the loss factor will be for the Non-Firm Energy price. To address this concern, BC Hydro decided to apply a pre-determined loss factor (i.e., 6.28%), common to all projects, in the two sections of the EPA that require the use of a loss factor, namely the LD Amount for delivery shortfalls and the pricing for the Non-Firm Energy. The 6.28% factor represents an average loss factor for the entire BCTC transmission system and does not vary by region (please refer to BCTC's OATT Schedule 10, Real Power Losses). To determine the adjusted Firm Energy Price for evaluation purposes, BC Hydro will use the project-specific losses arising from the BCTC studies.
109. In section 15 of the RFP, the Commercial Proposal requirements indicate that a Proponent must submit "The unit price adjustment to the offered Firm Energy Price that will apply to reflect the Proponent's cost of providing Interconnection Security, if required under the EPA …". How are Proponents to establish this, if they do not receive any feedback on these costs from BCTC prior to submitting Proposals to BC Hydro? In addition, how does this relate to the Interconnection and Transmission Impacts described in section 18, where it states that an adjuster will be applied to the Firm Energy Price taking into account " BC Hydro's estimate of the impact of any adjustment to the Firm Energy Price offered in the Commercial Proposal…"? Please provide further explanation of the expectations and requirements of Proponents to accommodate network upgrade and transmission impact costs in the Proposal document vs. adjusters to be added to the Firm Energy Price by BC Hydro during evaluation.
As stated in the Specimen EPA, Proponents are required to provide an Interconnection Security in the form of a letter of credit in an amount equal to the cost estimate for Interconnection Network Upgrades (INUs) to be set out in the Final Interconnection Study Report. Given that the Final Interconnection Study Report will not be available until after EPA award, Proponents will therefore not know the cost of providing this security at the time of Proposal submission.
Item 10 of the Commercial Proposal (Schedule 9) provides Proponents the opportunity to state by how much the Firm Energy Price (item #7 of the Commercial Proposal) will be increased for every $1,000,000 of Interconnection Security provided by the Proponent after EPA award. This $/MWh amount is called the Cost of Interconnection Security (CIS), and will vary from Proponent to Proponent. After the Final Interconnection Study Report is available, the Firm Energy Price in the EPA will be permanently increased by an amount equal to the CIS multiplied by the amount (expressed in millions of dollars) of the INU cost estimate from the Final Interconnection Study Report.
Since the Final Interconnection Study Report won't be available during the evaluation, BC Hydro will estimate the impact of the CIS on the Firm Energy price by using the information contained in the Initial Interconnection Study Report. Specifically, the adjustment to the Firm Energy Price (for evaluation purposes only) will be the CIS multiplied by 150% of the amount (expressed in millions of dollars) of the INU cost estimate from the Initial Interconnection Study Report.
In summary, Proponents should (1) factor the estimated cost of any interconnection facilities located on the Proponent's side of the POI into the Firm Energy Price at the time of Proposal submission, and (2) determine the $/MWh CIS for their project in anticipation of providing an Interconnection Security to BC Hydro after EPA award. Please refer to the RFP and the Specimen EPA for further details on matters related to interconnection.
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?
- Similarly, 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:
- 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.
- 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
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.
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.
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.
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.
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?
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?
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.
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.