NM Central Station Solar Power


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NM Central Station Solar Power

  1. 1. Q n A through email 09/26/2008 Q. In the process of putting our RFP submission together we have been trying to determine the location, names, and sizes of substations in the XXXX area…… A. All transmission and interconnection related questions need to be routed through the appropriate transmission provider at the point of interconnection. The following link has contact information for the appropriate providers in the WECC. The contact information for PNM can be found via the PNM link. 09/25/2008 Q. 1) In the RFP (statement 1.8) you talk about a fixed price or year scale price in reference to a known index: “Respondents may propose pricing that is fixed at a single rate for the term of the PPA or fixed for the first year and then escalated no more frequently than annually at a known or indexed rate. If an indexed rate is bid, the index must be clearly and closely related to the item being escalated. Bids tied to the general inflation rate will be excluded.” We would like to know what the know index are (if any) or if we can suppose a 5% fix index. 2) In the other side, our understanding is that we can present a price without consider ITCs if we explain the method used. A. 1) Pricing may escalate at whatever fixed rate you decide upon. If your pricing is tied to an index, that index must be clearly specified. 2) As long as you explain your methodology, you may present pricing in whatever manner you see fit. Q. I would appreciate if you can inform me about the limit (if there is) for the gas ancillary resources in the Solar RFP. For example, the maintenance of the Heat Transfer Fluid above the freezing point. A. There is no limit for gas ancillary resources for HTF freeze prevention. In the case of a natural gas hybridized facility, generation from gas ancillary resources will likely be capped at 25% of the expected annual solar generation measured on a MWh basis.
  2. 2. Q. I may want to hand deliver XXX’s response to the RFP. Can you confirm where I should deliver this response and whether I will be able to get a confirming receipt when I drop it off? A. You will need to drop the proposal off at PNM’s Aztec building with Joni Hardy. She is a notary, and can give you a receipt of delivery. If it is after 4PM, then you can drop it with the front desk. They will log the delivery, but no receipt will be available. PNM Aztec Campus 2401 Aztec Rd NE Albuquerque, NM 87107 Ms. Hardy’s phone is 505.241.2820 09/23/2008 Q. Is there a PPA contract length preference? A. Contract lengths of up to 30 years are acceptable. Q. A buyout provision will effect pricing, and depends on the timing of the buyout. How should this be handled? A. For a single project, multiple responses are allowed. For example one response may contain a buyout provision, and one may not. A single project with multiple responses will only incur one bid fee per the RFP. 09/19/2008 Q. Please indicate whether there are any restrictions or requirements for a bid from a multi-party consortium that has not yet formed a project company. A. Project developers/management structure will be an important non-price criteria selection component, but a newly formed project company is not a bid requirement. 08/11/2008 Q. It is not specifically stated that a generator interconnection application must be submitted prior to submission of the proposal for zones 1 and 2. While we are liable for any costs associated with the interconnection, is it a requirement to have initiated the interconnection process in zones 1 and 2? A. A generator interconnection application is not required to submit a bid. Each utility will evaluate the bids on both economic and non-economic evaluation criteria. One non-economic evaluation criteria is the likelihood that the project will meet its intended commercial operation date. To the extent that some interconnection information has been obtained at the time of bid analysis, the project participants can be more assured
  3. 3. of their determination as to the likelihood that a particular project will achieve its commercial operation date. Q. Along the same lines, if the answer to the above question is no, is it a requirement to have site control at the time of submission of the proposal? A. Respondents should demonstrate site control, or substantial progress towards site control at the time of bid submission. Q. Respondents are strongly encouraged to bid an option for thermal storage for the project. What is the reasoning behind requesting storage? A. The benefits of adding thermal storage to a solar thermal plant are outlined in the EPRI study referred to in Section 1.1 of the RFP. The study can be obtained from the EPRI website at www.epri.com; search EPRI Research for “1016342”, which is the Product ID for the study which is titled “New Mexico Central Station Solar Power: Summary Report”. Q. Please provide general information for the Project Participants that describes peak load characteristics (times) in each service territory. Are peak loads later in the evening following sunset? A. FERC Form 714 data can be used to obtain each Participant’s historical load shapes. FERC Form 714 data is available on the FERC website: http://elibrary.ferc.gov/idmws/search/fercadvsearch.asp. Peak load hours vary for each of the Participants but are generally in the afternoons, before sunset, in the summer. Q. As this is proposed as a straight energy priced contract, what is the incentive for storage? Is there any incentive, for example, time of delivery pricing, which would be available to incent the respondent to design for storage or maximum output during peak load periods? A. As indicated in Section 5 of the RFP, the Project Participants will favor those projects that provide the highest value to the Participants and their customers. As discussed in the EPRI study, during the Pre-Bid Meeting and in prior Q&A, the value that storage is expected to bring to a project includes a potentially lower levelized energy cost, higher avoided energy cost savings, and incremental capacity value. Respondents may submit alternative pricing for storage projects that includes time of delivery pricing if they desire. Q. It appears that you will evaluate storage against other renewable energy being proposed. Is that correct? A. All bids that pass the Phase I evaluation described in Section 5.2 will be evaluated against each other; this includes bids with and without storage. In addition, as stated in the footnote to Section 1.2 and in prior Q&A, the Project Participants will also be
  4. 4. comparing the bids in this RFP to solar bids submitted to each Project Participant’s separate RFPs. Q. Is any particular zone preferred by the Project Participants? It is stated in Section 3.2 that the Respondents proposing in Zones 1 and 2 should examine the benefits of those respective zones, but from an overall Participants perspective, is there a preference? A. Table 2 in the RFP document, which shows the relative ease of delivery for each of the participants from each of the Zones, should provide Respondents an indication of preferred Zones for each Project Participant. The Project Participants as a group have not indicated a single, preferred Zone. Q. What is the Host Balancing Area described in Section 3.2? A. The Host Balancing Area depends on where a project is located within the WECC, but may be PNM, Tri-State, or El Paso Electric. Q. When do you expect to have drafts of the PPAs available for review? A. The target date for release of the draft Model PPA is August 25th. Q. How important / serious is the bid in general? A. EPE, PNM, and SPS are all acquiring resources to meet the NM renewable portfolio standard (RPS). The companies are required by NM law to meet the RPS unless the costs exceed the reasonable cost threshold, which is in place to protect consumers. Q. What is the latest on the pricing limits as set by the Reasonable Cost Threshold (RTC) PUC case? A. See NMPRC Final Order for Case No. 08-00084-UT. A summary of the PRC’s order includes, 1) elimination of the technology-specific RCT; 2) adoption of an escalation rate of 0.25%/year for the overall RCT cost cap for years 2012 to 2015; 3) deferral of action on developing a standardized method for calculating the overall RCT cost cap. Q. Any comments or observations about the transmission queue at PNM and how long it might be? A. A transmission link to the OATI webOasis site is provided on the RFP website at www.pnm.com/rfp/solar 07/24/2008
  5. 5. Q. The recent PNM RFP specifies that the energy must come from a solar thermal parabolic trough; could you please confirm whether this excludes Compact Linear Fresnel Reflector technology, which is a variant of the parabolic trough system without the parabolic mirror? A. Compact linear Fresnel technology is excluded from this RFP. PNM has a second renewable energy RFP, which is inclusive of all renewable energy technologies save solar thermal parabolic trough. Information on the second RFP can be found at http://www.pnm.com/rfp/renewables/home.htm Q. Does a project in Texas very near the New Mexico border qualify for this RFP? (via phone inquiry) A. Only projects located within New Mexico are eligible for this RFP. 07/11/2008 Q. In the RFP, under Section 5.4 (page 18)… statement: “Purchaser flexibility of dispatch”… Can you please elaborate on this statement? What type of flexibility and how much flexibility is to be given to the purchaser? A. TBD Q. In the RFP, under Section 5.4 (page 18)… statement: “Risk of schedule delay as the result of a Respondent’s need for regulatory actions or approvals or for permitting licensing or transmission interconnection and mitigation plan”… Are you looking for a dollar amount here, or something else? A. The Participants want to know how Respondent plans to obtain all permits and approvals, including tax credits, and how delays in obtaining these will affect the project timing and/or viability. 07/14/2008 Q. Will PNM be supplementing any water for the operation of parabolic trough solar thermal resource plant? The reason I ask is because PNM has extensive water rights, and some technologies may require significant usage. Thanks in advance for your help. A. It is the responsibility of the Respondent to acquire all resources, including an adequate supply of cooling water, as needed to build and operate their facility. Respondent’s bid proposals should clearly indicate their estimated annual water needs and what source(s) of water they have acquired or intend to acquire for their project.
  6. 6. Q n A Pre-bid Meeting: July 10, 2008 Questions and Answers for RFP Session Q. Do the respondents need to estimate wheeling charges? A. Respondents will deliver energy to their proposed point of delivery. The project participants will be responsible for delivering energy to their loads or other sinks. The project participants will estimate transmission delivery/wheeling costs as part of their economic analysis of the bids. Q. How do we obtain more information about transmission interconnection procedures and transmission service cost? A. Those respondents proposing to interconnect in SPP to the SPS system should pay close attention to section 3.3 in the RFP. Links to the SPP website may be found on the RFP website. The transmission links for interconnection in the WECC listed on the RFP webpage have contact information for PNM, EPE, and TSGT. From the OATI webOasis page at https://www.oatioasis.com/cwo_default.htm click on the logo of the company of interest for interconnection procedures, study process, interconnection and transmission queue activity, and contact information. Q. As it relates to Table 2 of the RFP document, which do you consider better – “possible” or “difficult”? A. “possible” is better than “difficult”. Q. How will wheeling charges be evaluated? Which utility will carry the most weight? A. In general wheeling refers to a charge that is placed on an entity that wants to move power from point a to point b. There may be scenarios that do not have wheeling charges. The intent of Table 1 was to show the relative amounts of energy each project participant is seeking. Each utility will need to consider the entire cost to deliver energy to their loads including wheeling charges, if any. All of the various utilities have issued RFPs, or expect to shortly, for renewable resources. The all- in cost of solar energy and solar RECs from a proposed project in this RFP will be benchmarked against costs from other projects being proposed in response to the companies’ individual RFPs.
  7. 7. Q. There are currently three sites listed on the RFP website. The sites are Mesa Del Sol in Albuquerque, the West Belen site south of Albuquerque, and the To’hajiilee Chapter of the Navajo Indians site west of Albuquerque. Is it expected respondents would contact these owners of the sites and negotiate for the site? A. We expect respondents to bid a particular site and have, or be making, substantial progress towards site control. Q. Is there a formal definition of hybrid cooling? A. We will have to get together and provide an answer but we expect something that uses substantially less water than wet cooling. Q. Are the timeframes and deadlines applicable to all the RFPs or just this one? A. Although all the project participants have issued or shortly will issue separate RFPs for renewable energy (including solar resources) the timeframes and deadlines listed in the RFP document are for this particular RFP only. Questions and Answers for PPA Session Q. Are you going to propose a form of ownership structure that is preferable to the partners? A. Yes, that information will be contained within the Model PPA. Q. Do you have a duration for the PPA term. A. Respondents may propose PPA terms up to 30 years. Q. Do you have a preference (for term length)? A. No. Q. This is a big project. Are you going to assist parties in working together to create a proposal? A. No. Follow up (07/14/2008): The project participants believe that it is best that parties that wish to partner find each other through their normal course of business activities.
  8. 8. Q. How are you going to evaluate the storage for the facility? A. We expect to pay a fixed price and you will have to incorporate the storage costs into that. Follow up (07/14/2008): It is expected that the value of storage will be evaluated on the basis of its impact on the cost of energy bid and on the incremental capacity value it provides. Q. How do you evaluate the capacity value of non-storage vs. a little storage (??) vs. a lot of storage? A. It will be site specific. Follow up (07/14/2008): The benefits of storage, including incremental capacity value, will be evaluated separately by each of the project participants. In general, the capacity value of storage will be benchmarked against the cost of other sources of capacity available to the project participants. Q. Will there be any consideration given to providing a means of escalation for EPC costs? A. We will discuss and post an answer on the website. Follow up (07/14/2008): Respondents are expected to bid all-in energy prices which are fixed during the term (flat or changing at a known rate) or fixed for the first year of commercial operations and then escalate at an indexed rate that is clearly and closely related to the item being escalated. Q. What particular percentage are you looking at for the security fund? A. We are looking at this and it will align to the amount of investment – 4-5- percentage range is possible. Follow up (07/14/2008): The level of required security will be laid out in the Model Agreement to be released by the end of July. Q. Will there be a date you will have all of the undefined issues surrounding the Model Agreement posted on the website? A. The goal is to have the information out at the latest by the end of the July. Q. If you want the contract signed and agreed to by December 19th why the hold over to 2/20/09?
  9. 9. A. There may be issues that arise so this gives us a bit of room. Our intent is to evaluate this proposal as a group. Follow up (07/14/2008): The RFP schedule has been altered. The new bid submission due date is September 26, 2008, with expected contract execution by January 23, 2009. Requiring respondents to hold their proposals firm until February 20, 2009 allows for any unexpected delays in contract negotiations. Q. Utilities being able to opt in, it raises questions about scalability. How should we address this in our proposal? A. We will discuss and post an answer on the website. We suspect the bigger projects will have better pricing. Follow up (07/14/2008): Each utility will be comparing bids into this RFP with other solar bids received from their respective individual RFPs. Each utility will select the project(s) that best meet their objectives. Respondents should put forth their strongest bids and may want to consider bidding multiple projects that span the range of annual energy targets shown in Table 1. There are no additional bid fees required to present multiple options for a project at a single proposed point of delivery. Q. Any possibility of extending the proposal date? A. We want to keep that fixed at this point. Follow up (07/14/2008): The Proposal deadline has been extended and the RFP schedule has been updated. Bids are now due on September 26, 2008. Please see the RFP website for more details. Q. You are giving us the impression that you have some good proposals that you may want to act on that have already done their homework. A. The project participants have not received any proposals in advance of issuing the RFP. Q. The PPA is subject to approval by the PRC (regulatory process). How long does that process take? A. We will try to follow the APS model in which a contract is subject to regulatory approval within a specified time period. Q. ITC extension. Will that be 10% or 30%? Do you want a dual price bids? A. Please provide all-in energy costs with assumptions of both a 10% and 30% ITC.
  10. 10. Q. Some sites may be already in the queue. Is there going to be any preferential treatment to those sites that are already in the queue? A. No. Follow up (07/14/2008): Each utility will evaluate the bids on both economic and non-economic evaluation criteria. One non-economic evaluation criteria is the likelihood that the project will meet its intended commercial operations date. To the extent that some interconnection information has been obtained at the time of bid analysis, the project participants can be more assured of their determination as to the likelihood that a particular project will achieve its commercial operation date. Q. The EPRI study indicates two preferred sites. A. These are not preferred sites. The purpose of the study was to get a feel for the relative costs between two areas with a different solar resource, and to see how they compare relative to each other. Q. Are you open to multiple awards? A. We have not ruled that out.