Duke Energy Indiana Renewable Energy RFP
Questions and Answers

General Questions
1. Will the bidder asking the question b...
Link for Indiana Standard Contract Rider No. 50, Parallel Operation-For Qualifying Facility:
http://www.duke-energy.com/pd...
Given the positive response to this RFP, we anticipate additional renewable energy RFPs in the
future. Your bid proposal w...
4. PPA terms of 3 to 30 years are acceptable. Does the RFP scoring system recognize an
optimum PPA term (years)? (I.e. 15 ...
2. Power sale and buyout option, and
                           3. Sale/purchase of generating facility.
You may propose b...
9. If a gas landfill is currently flaring, does this fit under this RFP?
Yes, as long as it was flaring during or after 19...
8. What is the hourly load profile expected for Duke Energy over the next 25 years?
This information is confidential.

9. ...
•   Type and amount of required credit support will be determined during the bid analysis
    and negotiation process and ...
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Duke Energy Indiana Renewable Energy RFP

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Duke Energy Indiana Renewable Energy RFP

  1. 1. Duke Energy Indiana Renewable Energy RFP Questions and Answers General Questions 1. Will the bidder asking the question be identified? No, the bidder will not be identified. 2. Is it possible to receive a list of the bidders that responded to this RFP? No, we will not distribute a copy of the list of bidders; however anyone wanting their identity known to other bidders can send us an email and Duke will facilitate the process. 3. Will bids involving delivery to Duke Affiliates in other states be acceptable? If so, what limits, if any, will be on delivery locations? No, energy must be delivered to DE Indiana. 4. On May 29, 2007, Duke Energy announced the acquisition of Tierra Energy’s wind development business. What impact will this have on this RFP? Will this newly acquired wind development business or any of its employees participate in this RFP in any way? In the event that an affiliate offers a bid proposal, we have engaged Burns & McDonnell as an independent 3rd party to ensure we meet FERC guidelines as established in the Edgar, Allegheny, and Ameren cases. 5. Which kinds of agreements is Duke seeking to satisfy this RFP? Bid proposals may be in the form of power purchase, power purchase and buyout option, and sale/purchase of generating facility. 6. Is this RFP looking for just renewable fuel resources? We are not looking for fuel; this RFP is seeking energy that is generated by renewable energy resources. The energy must be counted in terms of MWh and must be verifiable. 7. Does Duke Energy already own land available for placing a new renewable energy facility? No, Duke Energy Indiana does not have any land earmarked for a renewable energy facility. 8. Will a demand response program be considered for this RFP? No, this RFP does not cover demand response programs. 9. Does the facility need to be placed with Duke’s “footprint”? No, the facility does not have to be placed in Duke’s “footprint”. 10. Will Duke consider the purchase of Green Tags or renewable energy credits of some sort to satisfy this RFP? Duke is currently not interested in the purchase of a supply of Green Tags or renewable energy credits to satisfy this RFP. 11. What is Duke Energy Indiana’s rate schedule for Qualifying Facilities? This information is available on our web site. The following link will take you to the site for the Indiana Standard Contract Rider No. 50, Parallel Operation-For Qualifying Facility. 1 of 8
  2. 2. Link for Indiana Standard Contract Rider No. 50, Parallel Operation-For Qualifying Facility: http://www.duke-energy.com/pdfs/DE-IN_Rider50_052307.pdf 12. Define closing date? The point at which ownership is transferred to Duke. 13. Is Duke open to co-ownership? Yes, we are open to co-ownership relationships. We plan to evaluate each proposal on a case- by-case basis. 14. Who will provide real estate? Duke energy does not have land set aside for renewable facilities. Real estate must be secured by the bidder. Bidder must demonstrate control over land prior to completion of contract negotiation. 15. Is confidentiality an issue? Duke energy will not disclose the identity of RFP participants without their permission. 16. What is the position of the RFP for the minority-owned company? Duke Energy has a Supplier Diversity Program that is strongly committed to helping diverse suppliers capable of providing quality commodities and services at competitive prices. The following link explains Duke Energy’s Supplier Diversity Program. Link for the Supplier Diversity Program: http.//www.duke-energy.com/suppliers/supplier-diversity.asp 17. In Indiana there is GoGreen Power Program, are proposals associated with green power? Indiana GoGreen Power is a voluntary program that allows customers to designate a portion of their payments to fund renewable energy projects. This RFP is independent and parallel to GoGreen Power. Indiana GoGreen Power benefits: • Advances development of renewable, environmentally friendly energy sources. • Offsets carbon dioxide emissions in the atmosphere. • Diversifies energy supply and lessens demand for fossil fuel generation. Link to GoGreen Power: http://www.duke-energy.com/indiana/products/gogreenpower.asp 18. Is this RFP associated with a Buy-America agreement? No. 19. Why will you not take these proposals by email? Although this mode of transmittal would prove convenient for the bidder, we have experienced firewall issues in the past. We would not want the firewall of a bidder or Duke’s firewall to prevent a bidder proposal from reaching Burns & McDonnell by the January 31, 2008 bid proposal deadline. 20. If I am not selected in the “short list”, what other options do I have to propose my bid to Duke? 2 of 8
  3. 3. Given the positive response to this RFP, we anticipate additional renewable energy RFPs in the future. Your bid proposal will bring your company to the attention of Duke for future consideration. Bidders might also choose to follow the Qualifying Facility process. (See question # 11 for the appropriate link) 21. Will Duke provide any financial incentives or should that request be included in the Price Proposal (4.1)? This information should be included in the bid proposal. 22. Does Duke Energy Ohio offer a similar program (and RFP)? We currently do not have an active renewable energy RFP for Ohio. We do however offer a program in Ohio for customer owned generation. To find out more please select the following link: http://www.duke-energy.com/ohio-business/products/customer-owned-generation.asp 23. Is attendance at the Bidder Conference mandatory for submitting a bid proposal? No, attendance at the bidder conference is not mandatory. 24. What set aside or carve outs are required for this RFP in Indiana? Currently, no Federal or State RPS is required in Indiana. Thus, Indiana has no set carve outs. 25. Will you accept bid proposals electronically? No, bid proposals will not be accepted electronically due to firewall issues. Compliance to this RFP requires 3 hard copies of the bid proposal package in addition to the completed electronic term sheet. The electronic term sheet must be provided via a CD or on a jump drive. Delivery information can be found in Section 2.4.4 in the RFP. 26. Does Duke plan on issuing additional renewable energy RFPs? Renewable energy RFPs will be issued as appropriate. Contract Term Questions 1. Reference Section 1.0. Resources must be operational and delivering power by January 1, 2011 – What is the earliest; (is there an added advantage to come on line earlier); and what is the latest date that Duke could be requiring power? Based on discussions at the Bidder Conference, Duke requests that resources be operational and delivering power by Summer 2011. Alternate power delivery dates can be discussed during the contract negotiation process. Currently, there is isn’t a large bias on COD. Duke’s analysis methodology does not discriminate against timing, size, technology, etc. 2. Reference Section 2.0, 2.1.2. Section 3.0, 3.3 conveys that bidders can suggest alternate and/or additional terms and conditions. Please clarify Duke’s position on these two sections. Any suggested condition and terms will be addressed during the contract negotiations. 3. Reference Section 2.6.6. “…minimum contract is 3 years, consider up to 30 years” – What is Duke’s ideal or preferred contract term? Duke has not determined an overall “preferred contract term”. The term of the contract will depend on the renewable energy proposal(s) selected. 3 of 8
  4. 4. 4. PPA terms of 3 to 30 years are acceptable. Does the RFP scoring system recognize an optimum PPA term (years)? (I.e. 15 years is better than 3 years or 30 years?) We currently do not have a set scoring system in place to evaluate proposal terms. The evaluation method was discussed at length at the bidder conference. This discussion was included in the presentation handouts from the bidder conference. In the event NOIB responders to this RFP were unable to attend the bidder conference, a copy of the presentation should have been emailed. 5. What about the LDs for the contract tied with this RFP? What is Duke contemplating to use for Energy? Capacity? Green credits? LD will be negotiated with any PPA as part of contract. Energy, capacity pricing and green credits will be negotiated in the contract terms. 6. Would Duke enter into a contract for multiple projects? Yes, provided we enter into the contract with 1 entity. The entity must guarantee performance for all projects covered by the contract. 7. Is there a mandatory cap on the renewable energy price? Currently, no Federal or State RPS requirements exist for Indiana. Thus, no cap has been established. 8. Will Duke consider conditional proposals? May bidders condition their bid on acceptance of permits, completion of development or obtaining suitable financing for a renewable generation facility? Yes, Duke will consider conditional proposals. However, Duke will take these conditions into account in its evaluation of the project. 9. Will a model boiler-plate contract that Duke would like to use be provided for information before the bidding deadline? No, we do not plan to provide a sample contract prior to the deadline. 10. Duke mentioned a desire to be able to acquire the renewable asset. Are there a minimum number of years the bidder’s plant must run before Duke would like to possibly acquire the asset? In the consideration of any acquisition, Duke will perform customary due diligence. However, there is no standard for the minimum number of years of operation prior to acquisition. 11. Will Duke buy 100% of power production at any time if ‘x’ amount of energy is provided or is it up to Duke to buy a certain percent. Terms will be determined in contract negotiation. 12. Will Duke be entitled to IP (intellectual property) per this RFP? Duke assumes no ownership in regards to IP. 13. Do you prefer companies pay for the solar arrays and Duke signs a PPA or would you prefer to pay for the facility with the corporation signing the PPA? Our current Duke Energy Indiana Renewable Energy RFP states in Section 1.0: a. Bid proposals may only be in the form of: 1. Power sale 4 of 8
  5. 5. 2. Power sale and buyout option, and 3. Sale/purchase of generating facility. You may propose both options. Each option submitted should be clearly labeled and should meet all the bid proposal guidelines as outlined in the RFP. Resource/Technology Questions 1. Would Duke contemplate buying a fixed MWh block (or unit contingent with an up to maximum MWh limit) from a portfolio of resources? If so, would it be possible to change the portfolio over the life of the contract, as long as the generating units included in the portfolio meet the renewable sources criteria? Yes. Duke would consider buying a fixed MWh block from a portfolio of resources. Yes, it is possible to change the portfolio over the life of the contract with the onus being on the bidder to demonstrate that the resources used to supply the energy meet the renewable source criteria as defined by the RFP. 2. Could bidders offer a product like a “seller’s choice into Duke System”, as long as the hourly generating resources used meet the renewable sources criteria? Yes. Duke would consider buying a fixed MWh block from a portfolio of resources. Yes, it is possible to change the portfolio over the life of the contract with the onus being on the bidder to demonstrate that the resources used to supply the energy meet the renewable source criteria as defined by the RFP. 3. Will this RFP consider a proposal that would aggregate multiple sites to meet the minimum 2MW? Yes, we would consider proposals that aggregate multiple sites. Duke will require the owner to demonstrate they meet the standards outlined in this RFP. The contract must be with one entity. The entity must guarantee performance for all projects covered by the contract. 4. Is Duke looking for an energy portfolio mix, where a certain percentage would be from solar, wind, biomass, etc.? No, Duke seeks to select a mix of technologies for integration with our generation fleet that provides the greatest value to our customers. 5. Has Duke established, in advance, a weighted scoring system for resulting bids that consider issues such as; capital cost, variable costs, heat rate, on-line date, buyout or no buyout option, PPA term (years in length), credit worthiness of bidder, location, scale (MW), experience of bidder, base load vs. intermittent supply, other? No, we have not developed a scoring system. 6. For a plant that has a base or intermediate load, does Duke have a preference? Duke does not have a preference. 7. Is there a set-aside for solar PV technology or is the playing field the same for all technologies listed? Currently, a set-aside does not exist for solar PV technology in Indiana. 8. Would this RFP be open to energy produced from sea waves? If a bid proposal that utilizes sea waves as a renewable energy source meets all the requirements as stated in Section 2.6 of the subject RFP, we welcome your bid. 5 of 8
  6. 6. 9. If a gas landfill is currently flaring, does this fit under this RFP? Yes, as long as it was flaring during or after 1996. 10. Is coal bed methane included in the same category as coal mine methane? No. Analysis/Bid Selection Questions 1. Given that the current state of deployable solar technology has a kWh cost several times higher than Duke’s current retail rate and is more expensive than other renewable energy sources, how will Duke consider solar bids? All technologies presented will be evaluated with the emphasis on how well they integrate with our generation fleet. 2. Can you provide bidders with a map of the Duke Control area? Will preference be given to generation resources located within it? For NOIB responders, a Duke Energy Indiana Transmission map may be requested once a signed completed release form is received. Email Kathy Dunn@ KHDunn@duke-energy.com to request a release form for a Transmission map. All delivery points within this area will be considered similarly. 3. Since Duke is relatively new to the renewable energy market, what are the resources that Duke has to evaluate bids? How will Duke decide which bid proposals are realistic and which ones are not? When you get into contract negotiations and prices aren’t close to what Duke can afford, can you go back and negotiate with an original bidder who proposed a more realistic bid? Duke will trust and value bid proposals submitted. We are confident that bidders will not risk their credibility by supplying bid proposals stating terms the bidder can’t deliver. Bidder experience will be taken into consideration during the evaluation process. All bids will be retained by Duke in the event we need to solicit a dialogue with a bidder that does not originally make the “short list”. 4. Fuel costs are a pass through and fuel prices are hard to predict. Will Duke consider a pass through? Duke will consider the total cost of all proposals including any proposed pass-throughs. However, bids with fixed and known costs will most likely have an advantage over bids including variable pass-throughs. 5. Would the preferred time of delivery of 2pm to 7pm be the normal period of need that Duke would be interested in purchasing power, especially as it relates to solar suppliers? Duke will assign an energy and capacity valve to each bid. A bid from a resource that provides energy coincident with our peak will receive higher capacity valves than one that does not. 6. What months of the year does Duke Energy consider to be “summer” for Net Capacity calculations? Duke considers summer to be June – September. 7. What $/MWh are Duke Energy’s existing plants dispatching at currently? This information is confidential. 6 of 8
  7. 7. 8. What is the hourly load profile expected for Duke Energy over the next 25 years? This information is confidential. 9. What is the forward curve for gas, coal and nuclear fuel that Duke Energy is modeling with? This information is confidential. 10. In reviewing the RFP, is Duke looking for an indicative offer? RFP assumes bidder to hold prices on bid proposals submitted but understand they are not firm until a contract is signed. Fine tuning of bid proposals will occur during RFP process. 11. How should environmental attributes be addressed in the bid proposal? The bid proposal should assume a “turnkey” price for the PPA. Environmental attributes should be included in price. As a reminder, this RFP assumes that Duke has title to all environmental attributes for the life of the contract. 12. Reliability and cost are listed as primary drivers for successful bid proposal selection. How does Duke define reliability? Reliability reflects the level of certainty for the proposed project and associated technology to deliver the specified capacity and energy over the life of the contract. 13. When can bidders expect to be contacted if there are questions concerning their submitted bid proposals? In the event Duke has questions concerning any portion of the submitted bid proposal, bidders will be contacted via email/phone the latter part of February. Credit Questions 1. Will letters of credit with statement of obligations from companies that have yet to be named be taken into consideration? Duke typically requires that letters of credit be issued by major U.S. commercial bank, financial institution or a foreign bank with a U. S. branch office with a Credit rating of at least “A” by S&P or “A3” by Moody’s, and having assets of at least $10B. Guarantees from investment- grade entities, in a form acceptable to Duke, will also be considered acceptable credit support. 2. When we talk about evaluation of company (credibility) what is the credit review for specific companies outside of the United States? In general, companies with investment grade credit ratings or comparable credit quality will be considered creditworthy. Any specific issues related to foreign companies will be assessed on a case-by-case basis. 3. What are the creditworthiness or collateral requirements? • Credit quality of bidders will be analyzed using the following information. – Ratings assigned by major rating agencies (where available). – Internal assessment based on bidders’ financial statements, including ratio analysis, trend analysis, etc. – Any other available, relevant information that may be useful, in Duke’s opinion, in performing the analysis. 7 of 8
  8. 8. • Type and amount of required credit support will be determined during the bid analysis and negotiation process and will vary depending on project size and Duke’s risk assessment. • Acceptable credit support includes. – Letters of credits and – Parent guarantees from investment-grade rated entities. • Duke may require certain contractual rights, such as; Step-in rights for new development proposals. 8 of 8

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