Questions and Answers for the NV Energy 2010 Renewable RFP
March 24, 2010

Set forth below are the first set of questions ...
but not limited to (1) changes in the load forecast; (2) delays in project commercial
      operation dates; (3) project f...
storage in November 2010. The SolarReserve project is currently pending approval by
       the PUCN.

       For solar PV ...
4. Ram Power Corporation for the 53.5-megawatt Clayton Valley 1 Geothermal
          Project -- expected to be online by 2...
provide them the opportunity to carefully and thoroughly review the information
       provided in the Bid Protocol Docume...
below the Supply Amount produced by the Generating Facility. The Parties agree
              that remedies at Law may be i...
Q23. Per 2.3 of the NVE RFP, I do not see on the RFP website a Respondent Registration and
     Contact Information Form. ...
Q29. What do you consider a competitive price for PV power, $/KWh?
A29. The competitive price for renewable energy for any...
3.2    Dedication. All Product shall be dedicated exclusively to Buyer for so long as
              this Agreement is in f...
Respondent and only after the Respondent has provided significant assurance that they
       are undertaking all efforts t...
Q44. Does NVE prefer a PPA, turnkey, or other structure over another?
A44. NV Energy will evaluate proposals submitted in ...
NV Energy will fully evaluate proposals of the types described above based on the
       information provided by the respo...
cooperate with the other Party in obtaining any exemption from or reduction of
              any Tax. Each Party shall hol...
Q60. Is there a planned approval date for the ON Line 500 kV project?
A60. See the Response to Q59.

Q61. How will NV Ener...
sell a bundled renewable energy product to the Company; and (3) that PPA is approved
       by the PUCN, then the Responde...
Q72. If you have a solar project in the Eldorado Valley, what is the best interconnection point
     McCullough or Marketp...
completed? Or is it acceptable to describe the status of the process with the transmission
       personnel?
A76.   A cond...
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Questions and Answers for the NV Energy 2010 Renewable RFP ...

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Questions and Answers for the NV Energy 2010 Renewable RFP ...

  1. 1. Questions and Answers for the NV Energy 2010 Renewable RFP March 24, 2010 Set forth below are the first set of questions and answers in connection with the Spring 2010 NV Energy Renewable RFP. The questions include those asked at the March 11 Bidders’ Conference, as well as questions received via the RFP e-mail address. NV Energy will provide periodic updates as additional questions are received and answers are developed. Please note that the deadline to submit questions will be Monday, April 12, 2010. Bids into the RFP are due at 5PM PDT on Friday, April 16. Regards, David N. Hicks Director of Renewable Energy Procurement and Technical Services NV Energy QUESTIONS AND ANSWERS     I. RFP Process   Q1. Can you elaborate on the difference between the PUCN processes for approval of long- term transactions for renewable energy (i.e., IRP vs. Amendment to IRP)? A1. Currently there are two principal vehicles for the consideration of approval of long-term contracts for the procurement of renewable generation. The first vehicle is to submit contracts for approval through the Triennial Integrated Resource Plan (“IRP”) process. The second avenue is through the application to amend an existing, approved IRP (i.e., an IRP amendment”). The IRP is filed by Nevada Power and Sierra Pacific every three years, and the IRP Amendments are filed in intervening years between each IRP. Q2. Regarding the recent PPA announcements, were they all procured through the 2009 RFP process or were any of the projects procured via direct negotiations? A2. NV Energy utilizes the RFP/RFI process as the primary vehicle for the procurement of renewable energy from new sources of renewable energy. Timing and developments in individual projects however means that procurements do not always arise directly from the most recent solicitation. Q3. Could you please provide Nevada Power’s projected solar requirement? A3. NV Energy conducts an ongoing analysis of its projected RPS needs, both Solar and non- solar, and updates these projections on a frequent basis, due to many factors, including 1 of 17   
  2. 2. but not limited to (1) changes in the load forecast; (2) delays in project commercial operation dates; (3) project failures; and (4) underperformance by existing projects. Given the changes in RPS requirements faced by NV Energy, targets through the RFP process are: 1) Renewables to, at a minimum, meet the RPS (which includes the statutory solar RPS requirement) 2) Quality projects with competitive pricing; either power purchase, joint venture, or ownership Q4. Are there specific quota allocations by renewable energy source or type under the 2010 RFP? A4. Only solar energy has a specific “sub-requirement” under the Nevada RPS Statutes. See NRS Section 704.7821(2)(a). Other than the solar requirement, there are no specific quotas for the various renewable energy technologies deemed under the Nevada Statutes to be acceptable Renewable Energy Systems. Q5. In the first few slides of the Pre-Bid presentation, you mentioned that Sierra Pacific Power was currently exceeding the 2015 RPS goal of 20% and has accrued a surplus of credits, some of which are being loaned to Nevada Power. Can those credits apply toward future RPS requirements, or are they not bankable? A5. Pursuant to Nevada law, accrued PCs can be “banked” and used to meet future compliance requirements. Q6. Further, could you briefly recap NVE’s current and future RPS attainment status? A6. NV Energy expects Sierra Pacific d/b/a NV Energy to meet RPS targets through 2015, given current forecasts of retail energy sales and available renewable generation. In contrast, the Company forecasts that Nevada Power d/b/a NV Energy will need additional renewable generation to meet its RPS targets, and must repay Sierra for PCs that Sierra has loaned to Nevada Power. Q7. Will NVE Energy accept and consider/evaluate projects that are directly interconnected to the Sierra (North system) in this RFP? A7. NV Energy’s two subsidiary electric utilities, Sierra Pacific Power d/b/a NV Energy (“Sierra”) and Nevada Power Company d/b/a NV Energy (“NPC”) must each separately meet the Renewable Portfolio Standard (“RPS”). As discussed in the response to Q6 above, NPC will need additional renewable generation to meet its RPS requirements. Therefore, as has been prevalent over the last two years, and will continue to be the case in the current RFP, NPC will be the buyer and signatory to power purchase agreements that are selected out of the RFP process. Given that the solar resource is generally superior in southern Nevada, and NPC’s need for additional resources, the RFP process has resulted in solar projects generally being selected from southern Nevada. One notable exception to this is the SolarReserve project. NPC entered into a long-term power purchase agreement with this state-of-the-art solar thermal project with molten salt 2 of 17   
  3. 3. storage in November 2010. The SolarReserve project is currently pending approval by the PUCN. For solar PV in general, the selection in 2009 of three solar PV bids from southern Nevada reflects, in part, the inherent advantages of the solar resource in the south, as well as the characteristics and benefits of those projects. Nevertheless, given NV Energy’s experience with the SolarReserve project, the Company will continue to invite solar bids from any location in Nevada. Based upon the RFP criteria, if a solar project in the north distinguishes itself favorably from other bids submitted, NV Energy will consider adding that project to its large and expanding portfolio of renewable energy projects. Q8. Which NV Energy entity will not execute PPAs? A8. As discussed on slide 49 of the Pre-Bid Conference presentation (available on the Spring 2010 NV Energy Renewable RFP web page), Sierra Pacific Power d/b/a NV Energy will not enter into power purchase agreements in this RFP process. Q9. Is there a distinction to be drawn between the 2010 RFP process and a proposal to Nevada Energy regarding possible Joint Venture opportunities involving a single 350- 400MW solar project? A9. As stated in Section 2.9 of the 2010 Bid Protocol Document, NV Energy encourages five different types of bid proposal options: 1) Power purchase agreement 2) Turnkey project (i.e., build-transfer arrangement), where NV Energy purchases the completed project 3) Joint venture 4) Sale of project development assets 5) Resource sale/lease where NV Energy purchases or leases resource rights and constructs the generation project Q10. I’m looking for information from your 2009 RFP. I see there is a website for 2010, but is there anything from 2009 that shows what projects qualified and are under negotiation. A10. Please see Slide 14 of the Spring 2010 Pre-Bid Conference Presentation for the schedule for the 2009 Renewable RFP. As stated in the Pre-Bid Presentation, all target dates for the 2009 RFP were met. In January and February 2010, NV Energy executed power purchase agreements with the following projects for renewable energy: 1. Pattern Energy Group LP for the 150-megawatt Spring Valley Wind Project in eastern Nevada -- expected to be online by late 2011. 2. Waste Management for a three-megawatt landfill gas-power project to be located at the Lockwood Landfill near Reno, Nevada – expected to be online by late 2011. 3. NextLight Renewable Power, LLC, for the 50-megawatt (AC) Silver State Solar Power photovoltaic facility near Primm -- expected to be online by early 2012. 3 of 17   
  4. 4. 4. Ram Power Corporation for the 53.5-megawatt Clayton Valley 1 Geothermal Project -- expected to be online by 2014. 5. Ormat Technologies for the 25-megawatt Hot Sulphur Springs 2 geothermal project near Elko -- expected to be online by 2014. Negotiations are ongoing with other responders to the RFP. In keeping on track with the Company’s diligent efforts to continue to meet the increasing RPS requirements and consistent with contractual terms requiring submittal of contracts to the Commission within 120 days of execution, any successfully negotiated and executed long-term power purchase agreements will be brought forward for consideration by the Commission in future filings by the Company. Q11. Is there someplace online where I can check the status of an RFP? In particular, can I find out the status of individual bids to this RFP and/or past RFPs? A11. Please check the NV Energy Spring 2010 website for updates to the 2010 Renewable RFP. NV Energy does not publicly release information provided in the proposals by individual respondents, nor does it release the status of individual proposals. Q12. What is the percentage of unsuccessful vs. successful respondents, both in quantity and dollars received for the application? A12. NV Energy has received very robust responses to both the 2008 and 2009 Renewable RFPs. In the last 17 months, NV Energy has executed 15 power purchase agreements with renewable energy suppliers resulting in the procurement of over 2,800,000 MWh per year of renewable energy and associated Portfolio Energy Credits. The bid deposits received by NV Energy in the 2008 and 2009 RFPs have not covered all of the NV Energy’s incurred costs in processing the RFPs. Q13. Will Respondents who provide proposals to the RFP, and are not selected to the short list, receive “coaching” or some other type of debriefing as to why their proposals were not selected? A13. The RFP selection process is rigorous and holistic in nature, objectively evaluating each of the projects based on a host of specific factors, all of which are set forth in our RFP protocol and website for all bidders in advance of the RFP submissions. The analysis looks at all of these various metrics, both in terms of merits for each individual project, and also, most importantly, relative to other projects in that specific RFP. Given the sheer volume of responses received, the proprietary nature of the information provided by each bidder involved in this very competitive industry, the need to keep all bidders on an even playing field throughout the process and the fact that the selection of individual projects to the shortlist is largely due to the favorable characteristics of individual projects submitted in each RFP, it is not prudent for NV Energy to provide individual bidders feedback after bids are submitted and reviewed. Often financial or technical information favors one project over another, and that information is highly proprietary and cannot be shared with competing bidders. Our goal is to provide all bidders with the necessary information and tools to propose the best possible bid by having a fulsome RFP process, which includes a meeting open to all bidders and frequent posting of all information on our website. By making this information available to all developers, we 4 of 17   
  5. 5. provide them the opportunity to carefully and thoroughly review the information provided in the Bid Protocol Document, as well as the information and guidance provided in the RFP Pre-Bid meeting and on the RFP website, before they undertake a proposal. In addition, we provide potential bidders the opportunity to pose specific questions to our RFP team both in-person (at the Pre-Bid meeting) and via email up through the bid deadline. These questions and responses are then posted for all bidders in order to provide them all of the tools to put forward the best possible proposal. Q14. How is the 2.4 solar multiplier achieved, and will NV Energy contract with projects that receive the multiplier? A14. Nevada Revised Statutes Section 704.7822 states: NRS 704.7822 Calculation of electricity generated or acquired from certain solar photovoltaic systems. For the purpose of complying with a portfolio standard established pursuant to NRS 704.7821 or 704.78213, a provider shall be deemed to have generated or acquired 2.4 kilowatt-hours of electricity from a renewable energy system for each 1.0 kilowatt-hour of actual electricity generated or acquired from a solar photovoltaic system, if: 1. The system is installed on the premises of a retail customer; and 2. On an annual basis, at least 50 percent of the electricity generated by the system is utilized by the retail customer on that premises. This RFP seeks renewable energy resources that will provide a bundled renewable energy product to NV Energy and its customers. Pursuant to the 2010 Bid Protocol document, the bundled renewable energy product will include: “The Respondent may submit a proposal under which the Respondent will own and operate the project, and NV Energy will purchase all of the output of the facility, including all renewable benefits of the project accruing from both energy sales to NV Energy, and from station service energy (i.e., parasitic load), under a long-term power purchase agreement.” (Section 2.9.1 of the 2010 Bid Protocol Document) In addition, Section 3.2 of the pro forma power purchase agreement requires that 100% of the output from a renewable generation facility be dedicated to NV Energy: 3.2 Dedication. All Product shall be dedicated exclusively to Buyer for so long as this Agreement is in force and effect. Supplier shall not, without Buyer’s prior written consent (which Buyer may withhold in its sole discretion), (a) sell, divert, grant, transfer, or assign Product to any Person other than Buyer, (b) provide Buyer with electric energy, PCs, or Renewable Energy Benefits from any source other than the Generating Facility or (c) divert, redirect or make available the [geothermal/biomass/hydroelectric/solar/wind] resource utilized by the Generating Facility as of the Commercial Operation Date to another generating facility, or any third party, such that the diversion of the [geothermal/biomass/hydroelectric/solar/wind] resource results in a reduction 5 of 17   
  6. 6. below the Supply Amount produced by the Generating Facility. The Parties agree that remedies at Law may be inadequate to protect each other in the event of a breach of this Section 3.2, and the Supplier hereby in advance agrees that the Buyer shall be entitled to seek without proof of actual damages, temporary, preliminary and permanent injunctive relief from any Governmental Authority of competent jurisdiction restraining the Supplier from committing or continuing any breach of this Section 3.2. Q15. Can you please provide information on the upcoming NV Energy PC-only RFP, which departments at NVE will be working on it and preparing it and when it will be issued? A15. NV Energy will conduct a PC-only RFP during the calendar year 2010. The PC-Only RFP will be conducted by the Renewables Department of NV Energy and is still being developed. A detailed description of the PC-only RFP, including requirements and other supporting documentation, will be available when the PC-only RFP is released. Q16. I attended last week’s bidders’ conference, and thought I heard a statement that NV Energy was planning to issue a PV-only RFP this year. Did I hear this correctly? If so, can you please let me know the anticipated date of this RFP? A16. You did not hear correctly. See answer to Q15. Q17. Is a solar PC valued the same as a non-solar PC? A17. Solar PCs have historically been more valuable than non-solar PCs, but as the supply of solar credits increases relative to the supply of non-solar PCs, the value of solar PCs has declined significantly. Q18. Is there a known cost of penalties if NVE fails to meet its RPS? A18. No, there is not. Q19. Will questions and answers from the Pre-Bid Conference be posted to the 2010 NV Energy Renewable RFP web page? A19. Yes, questions and answers from the pre-bid conference are included in this Q and A, which has been posted to the 2010 Renewable RFP web page. Q20. Will the Pre-bid presentation be made available electronically on the NVE renewables website? A20. Yes, a pdf copy of the Pre-Bid Conference presentation has been posted to the Spring 2010 NV Energy Renewables RFP web page. Q21. Can you please forward me the list of participants for this RFP? A21. NV Energy will not make public the attendee list for the 2010 Renewable RFP Bidders Conference. Q22. Would it be possible to get a transcript of the conference? A22. A transcript of the conference is not available. 6 of 17   
  7. 7. Q23. Per 2.3 of the NVE RFP, I do not see on the RFP website a Respondent Registration and Contact Information Form. Can you please direct me to those forms or email the forms so we can complete and submit them? Thank you, A23. This question was submitted on March 22, 2010. The question references Section 2.3 of the Bid Protocol Document, which pertains to registration for the March 11, 2010 Pre- Bid Conference. Given that the Pre-Bid Conference has occurred, it is no longer necessary to register on the RFP website. Q24. What are your plans for future renewable RFPs? A24. Tentatively, NV Energy intends to issue four solicitations for renewable energy and/or Portfolio Energy Credits in 2010: (1) Spring 2010 Renewable RFP; (2) Fall 2010 Renewable RFP; (3) Request for Information (“RFI”) for renewable energy transaction of three years or less; (4) Portfolio Credit (“PC”) only RFP. With the exception of the Spring 2010 Renewable RFP, all other RFPs/RFI are tentative, and the dates of any RFP/RFI released are also tentative and subject to change. Q25. Can we get a copy of the attendee list? A25. No, NV Energy will not publicly release the attendee list for the RFP Pre-Bid Conference. II. Bid Response   Q26. Does a generating facility require a weather station? A26. For transactions entered into as a result of this RFP, NV Energy will require that the project provide the Company real time date regarding weather conditions at the project site. Q27. Will NVE provide examples of RFP submittals, acceptances? A27. No, NV Energy will not publicly release any part of any proposal submitted in the current or previous RFPs. Q28. Does PV watts data qualify for solar resource data? A28. NV Energy will accept PV watts data for solar resource data, but if this is the only source of data, it will be indicative of an early stage development project and call into question the veracity of the supply table submitted as part of the 2010 Technical Proposal Form. NV Energy will evaluate such a proposal accordingly. 7 of 17   
  8. 8. Q29. What do you consider a competitive price for PV power, $/KWh? A29. The competitive price for renewable energy for any technology type is determined through the RFP process. Q30. Is there a location preference for PV projects within the Nevada Power service area? A30. All other things held equal, NV energy prefers PV proposals that directly interconnect to the Nevada Power control area, or deliver to an NV Energy South interface point as described in the Bid Protocol Document. NV Energy recognizes that individual projects may have compelling characteristics at various locations, and therefore will accept and evaluate proposals that directly interconnect to either the Nevada Power or Sierra Pacific Power control areas, or deliver to the NV Energy North and South interface points as described in the Bid Protocol Document. Q31. Are there technology preferences for PV, for example, the level of risk w/polycrystalline relative to thin film? A31. NV Energy will accept and evaluate proposals for any type of PV technology. NV Energy has entered into power purchase agreements with suppliers who have utilized various types of PV technology. Q32. Does NVE have a tax credit appetite? A32. NV Energy will evaluate proposals submitted in the RFP on a case-by-case basis, including projects that propose some type of ownership or investment position for the Company. In absence of having access to particular characteristics of a proposal, NV Energy cannot determine whether it is advantageous for the Company to use any or all of the available tax credits for that particular proposal. The ability of NV Energy to utilize tax credits will also depend on the statutory requirements for such credits, as well as NV Energy’s specific financial situation over time. Q33. For a PV solar project, can NVE use all tax credits available, such as accelerated depreciation, for example? A33. See answer to Q32. Q34. Does NVE have a preference for project ownership vs. PPAs? A34. NV Energy will evaluate proposals submitted in the RFP on a case-by-case basis. NV Energy does not have a preference for project ownership or PPAs. In fact, NV Energy encourages the submission of multiple structures in each proposal, allowing up to three separate proposal structures for a particular project under the same non-refundable bid fee. Q35. Is NVE interested in PPAs or ownership in a portion of a larger project? Or must NVE get the total generation of a project? Should the bidder recommend the portion of the project or allow NVE to choose? A35. Respondents and their legal counsel should carefully review the pro forma power purchase agreement, including Section 3.2 of the agreement: 8 of 17   
  9. 9. 3.2 Dedication. All Product shall be dedicated exclusively to Buyer for so long as this Agreement is in force and effect. Supplier shall not, without Buyer’s prior written consent (which Buyer may withhold in its sole discretion), (a) sell, divert, grant, transfer, or assign Product to any Person other than Buyer, (b) provide Buyer with electric energy, PCs, or Renewable Energy Benefits from any source other than the Generating Facility or (c) divert, redirect or make available the [geothermal/biomass/hydroelectric/solar/wind] resource utilized by the Generating Facility as of the Commercial Operation Date to another generating facility, or any third party, such that the diversion of the [geothermal/biomass/hydroelectric/solar/wind] resource results in a reduction below the Supply Amount produced by the Generating Facility. The Parties agree that remedies at Law may be inadequate to protect each other in the event of a breach of this Section 3.2, and the Supplier hereby in advance agrees that the Buyer shall be entitled to seek without proof of actual damages, temporary, preliminary and permanent injunctive relief from any Governmental Authority of competent jurisdiction restraining the Supplier from committing or continuing any breach of this Section 3.2. Q36. Can out-of-state resources be firmed and shaped? A36. NV Energy will accept and evaluate proposals that include “firming and shaping” characteristics. Please note that the Respondent is responsible for the cost and arrangement of transmission and ancillary services related to such a transaction to deliver power to one or more NV Energy interface points as discussed in the 2010 Bid Protocol Document. Q37. Because there are so many different levels and phases of approvals, what is meant by “the Respondent has obtained all necessary authorizations and approvals” in reference to local, state, and federal permits? A37. NV Energy will evaluate all aspects of a compliant proposal submitted in the RFP, including progress made toward the acquisition of all of the permits, authorizations and approvals (e.g., Bureau of Land Management, Nevada UEPA, etc.) necessary to construct and operate the facility. All other things held equal, projects that have completed all of the necessary authorizations and approvals will be ranked higher than projects that have not achieved the necessary authorizations and approvals. Generally, significant progress, including resource expenditures and required filings with relevant governmental authorities, must be made prior to submission into the RFP. Q38. Following up to the previous question, does this mean authorizations and entitlements are in process? A38. NV Energy will evaluate proposals submitted in the RFP on a case-by-case basis, including the progress made to achieving all permits, authorizations and approvals necessary to construct and operate the proposed project. NV Energy recognizes that it may choose to select projects for the shortlist that have not completed all of the aforementioned steps, but this will be done with the understanding that the risks associated with achieving all final permits, authorizations and approvals rests with the 9 of 17   
  10. 10. Respondent and only after the Respondent has provided significant assurance that they are undertaking all efforts to obtain relevant authorizations. Q39. Will proposals from intermittent resources, such as PV or wind, be considered more favorably if they have managed, or specified, power ramp rates than projects with random unpredictable power ramp rates? A39. All other things held equal, projects that provide baseload generation (e.g., geothermal), or steady output operating characteristics will be valued higher relative to intermittent resources. To date, NV Energy has found that the costs associated with current technology which “firms up” intermittent renewable generation (e.g., battery technology) may negatively impact the economic viability and competitiveness of those projects. Q40. If bid pricing is done for a 20-year PPA, can we also provide pricing for other contract lengths? A40. Respondents must provide pricing for a 20-year term in the Technical Proposal Form, which is required as part of the bid submittal in the RFP. Initial evaluations of projects will be conducted in part, based on the 20-year pricing submitted by Respondents to the RFP. Q41. How did Solar Reserve end up w/25-year PPA? A41. Through the course of detailed evaluation and negotiation regarding the SolarReserve project, NV Energy determined that significant incremental value would accrue to NV Energy and its customers by entering into a 25-year power purchase agreement with SolarReserve. Q42. Please list the advantages and disadvantages of projects sited out of state. A42. NV Energy will evaluate proposals submitted in the RFP on a case-by-case basis, including proposals submitted for resources directly connecting to the NV Energy transmission system, as well as renewable generation proposals delivering to an NV Energy interface point. Without knowing the particular characteristics of an individual project proposed to be located outside the NV Energy control area, it is not possible to determine the advantages and disadvantages of a proposal. Q43. Why would a developer submit a 2010 bid using the same technology and same site as the 2009 bid? What is the benefit to developer? Benefit to NVE? A43. Over time, developers may improve the characteristics of their project(s) as they continue to further the development of those projects. With an improved project, a Respondent may consider submitting an updated bid to NV Energy. The benefit to the Respondent, NV Energy and its customers would occur if the project has improved to the point that NV Energy selects that project as a shortlist candidate, and subsequently enters into a contractual arrangement for the project that provide significant value to NV Energy and its customers. 10 of 17   
  11. 11. Q44. Does NVE prefer a PPA, turnkey, or other structure over another? A44. NV Energy will evaluate proposals submitted in the RFP on a case-by-case basis, and therefore does not have any before the fact preferences for individual projects, technology types, or proposal structures. Q45. You mentioned the concept of a resource sale/lease whereby NVE acquires a site once the geothermal risk is eliminated; is NVE open to the same concept for a solar resource lease where site control risk is eliminated but interconnection, transmission and PPA risk would be borne by NVE? A45. NV Energy will accept and evaluate proposals of this type in the 2010 Renewable RFP. Q46. Will NVE give preference to PV projects of a certain size? A46. NV Energy prefers projects in the 20-30 MW range. NV Energy will not consider PV bids greater than 50 MW (AC). Q47. Of the preferred delivery points listed in the RFP, which (if any) are more desirable to NVE for delivery of PV? A47. Transmission interconnections and delivery for proposed projects are evaluated on a case-by-case basis, so the evaluation of an individual project with regard to power delivery at a particular NV Energy interface point is dependent on the many characteristics of that individual proposal. Q48. Is the 20 year term fixed, or can a longer or shorter term be proposed? A48. For the initial evaluation of projects, all Respondents proposing a power purchase agreement must propose pricing consistent with a 20-year agreement. Q49. The NV Energy bid submission documents contain a formatted PPA contract and corresponding exhibits for us to provide our pricing proposal under a PPA model. Can you provide me with some direction as to what part of the proposal we should include our pricing proposal under an EPC proposal? Does NV Energy have a preferred contract and corresponding exhibit format for an EPC or Joint Venture proposal? A49. Given the unique nature and characteristics of any offer of an option other than a power purchase agreement from a respondent, NV does not include pro forma agreements for these types of options. Rather, the Respondent should provide as detailed as possible transaction description and requested terms and conditions for any proposal of one of the following types of transactions: 1) Turnkey project (i.e., build-transfer arrangement), where NV Energy purchases the completed project 2) Joint venture 3) Sale of project development assets 4) Resource sale/lease where NV Energy purchases or leases resource rights and constructs the generation project; 11 of 17   
  12. 12. NV Energy will fully evaluate proposals of the types described above based on the information provided by the respondent. The greater the detail and specificity of the response with regard to this type of transaction (including specific contract templates if available), all other things held equal, the greater the weight NV Energy will place on this type of proposal with regard to the expenditure of time and resources on evaluating the proposal. Q50. On the attached spreadsheet, tab “TMY” there are columns for “Phase in Year(s)” and “Phase out Year(s)”. What is meant be these? A50. The spreadsheet that was attached to the question above is not related to the NV Energy 2010 Renewable RFP, and makes several references to Arizona Public Service (“APS”). The author of this question should submit this query to the author of the referenced spreadsheet. Q51. The downloaded technical form Excel spreadsheet requires a password. Can you please provide it? A51. The 2010 Technical Proposal is password protected to prevent unauthorized alterations to the form. The password is not needed for input into the required fields. The first tab of the spreadsheet outlines which fields are “locked” and which require input. Q52. Numerous studies have been prepared for the subject property on which the generation facility will be located, which is privately owned. The studies were done at the election of the owner, but are not required by state and/or local authorities, ordinances, etc., to be completed. Should the studies be attached to the proposal? A52. Please provide all documentation available to demonstrate the viability of the proposed project.   III. Pro Forma PPA   Q53. How does the NV Energy pro forma PPA assess responsibility for taxes related to the delivery of renewable energy, and the associated Portfolio Energy Credits (“PCs”)? A53. Please review Section 7.6 of the pro forma power purchase agreement regarding tax responsibility: 7.6 Taxes. Buyer is responsible for any Taxes imposed on or associated with the Energy or its delivery from the Delivery Point. Supplier is responsible for any Taxes imposed on or associated with the Energy or its delivery up to or at the Delivery Point. Either Party, upon written request of the other Party, shall provide a certificate of exemption or other reasonably satisfactory evidence of exemption if either Party is exempt from Taxes, and shall use reasonable efforts to obtain and 12 of 17   
  13. 13. cooperate with the other Party in obtaining any exemption from or reduction of any Tax. Each Party shall hold harmless the other Party from and against Taxes imposed on the other Party as a result of a Party’s actions or inactions and that otherwise would not have occurred in the absence of this Agreement in accordance with Article 17.   Q54. Can you please provide examples of “all renewable energy benefits” that NVE has contracted for, benefits defined as (1) present benefits and (2) future benefits? A54. Current benefits include Portfolio Energy Credits for renewable energy delivered at the delivery point as well as parasitic load (i.e., station service energy). Examples of future environmental benefits may include carbon credits or offsets. Q55. Is the 2010 Pro Forma PPA different from the Pro Forma PPA in the 2009 RFP? A55. Prior to the release of a new RFP, NV Energy evaluates its pro forma power purchase agreement and makes changes to the agreement that NV Energy believes enhances the value of the agreement. The 2010 pro forma agreement therefore includes some changes from the 2009 pro forma agreement. Q56. Is there a pro forma contract for non-firm (PV/wind) resources that NVE will use? A56. There is one pro forma power purchase agreement for the RFP, which is designed to cover all types of technologies that are approved under the Nevada Statutes as part of the definition of a Renewable Energy System. Q57. Will projects proposed directly to ON Line be considered Northern NV resources subject to “out clauses” in the PPA? A57. Power purchase agreements executed with any project proposed in the North to interconnect directly to ON Line will require language allowing NV Energy unilateral termination rights in the event that ON Line is not unconditionally approved by the PUCN. Q58. What format does NV Energy prefer to receive comments to the PPA, redline or matrix list of exceptions (Table)? A58. Please submit exceptions, comments and edits to the pro forma power purchase agreement in editable redline format (MS Word).   IV. Transmission Q59. What is the status of the ON Line 500kV project?    A59. On February 4, 2010 Nevada Power Company d/b/a NV Energy filed an Application Seeking Acceptance of its Triennial Integrated Resource Plan covering the period 2010- 2029, including authority to proceed with the permitting and construction of the ON Line transmission project. The application, supporting documentation and testimony, as well as other correspondence and filed matters, is available on the website of the PUCN. 13 of 17   
  14. 14. Q60. Is there a planned approval date for the ON Line 500 kV project? A60. See the Response to Q59. Q61. How will NV Energy interconnect facilities located outside NV Energy’s control area, including any required interconnection equipment such as revenue meters? A61. Respondents are responsible for determining their obligations associated with interconnecting to another transmission provider’s transmission system. Q62. How does a proposed project apply for transmission interconnection and what is the process? A62. For interconnections to Nevada Power d/b/a NV Energy, please review information regarding the interconnection process at the Nevada Power OASIS website, http://www.oatioasis.com/NEVP/. For interconnections to Sierra Pacific Power d/b/a NV Energy, please review information regarding the interconnection process at the Sierra Pacific Power OASIS website, http://www.oatioasis.com/SPPC/. NV Energy contacts for specific questions regarding the transmission interconnection process are: Primary Contact Kiley McElroy Agent, Contracts 775-834-4802 KMcElroy@nvenergy.com Secondary Contact Gary Porter Manager, Transmission Interconnection & Transmission Planning 775-834-4582 GPorter@nvenergy.com Q63. Will NVE provide addresses of substations for interconnection? A63. No. Q64. Is Mead 500kV an acceptable delivery point? Is Mead 230 kV strongly preferred? A64. Mead 500kV will be considered as a delivery point. Mead 230kV is the preferred delivery point at the Mead substation. Q65. If the real property on which the project will be located in the NV Energy North service area has a transmission interconnection that can accommodate the renewable energy from the project, and a Small Generator Interconnection Agreement (“SGIA”) has been submitted and accepted, do I also need to file for and execute a TSA for delivery of the power to NVE south? A65. NV Energy will consider the feasibility of delivering the output of any facility proposed in the North along with all other NV Energy South’s existing and/or proposed contracts in determining whether to enter into a PPA for any such facility. Given this, and assuming (1) ON Line is approved; (2) a Respondent and NV Energy execute a PPA to 14 of 17   
  15. 15. sell a bundled renewable energy product to the Company; and (3) that PPA is approved by the PUCN, then the Respondent does not need to execute a Transmission Service Agreement (“TSA”) for delivery of the power to NV Energy South at this time. Q66. What is the anticipated schedule of the planned 500kV On Line, including regulatory approvals and completion of the construction of the project? A66. See Response to Q59. Q67. If a renewable project is located in the NVE South control area, is the project exempt from the language allowing NV Energy unilateral termination rights in the event that ON Line is not unconditionally approved by the PUCN? A67. Power purchase agreements executed with projects that connect directly to the Nevada Power control area, or to an NV Energy South interface point (as described in the 2010 Bid Protocol Document), will not require language allowing NV Energy unilateral termination rights in the event that ON Line is not unconditionally approved by the PUCN. Q68. Will any potential agreements with LS Power related to ON Line allow for a delay to affect the projects proposed from Northern NV? A68. See Response to Q59. Q69. Will NVE make adjustments to “network upgrades” included in an existing facility study under an interconnection request if the respondent only proposes a fraction of the total load studied in the interconnection request? A69. With respect to the RFP bid evaluation process, NV Energy will include all of the “Network Upgrade” costs for a particular site as part of the total customer costs evaluated for a project bid from that site. Q70. Does the PPA price included in the proposal include interconnect costs? A70. The Respondent will be responsible for all direct assigned transmission interconnection costs (i.e., Transmission Provider’s Interconnection Facilities and Interconnection Customer’s Interconnection Facilities). NV Energy assumes that the Respondent has properly accounted for these types of costs in its submitted bid price, and will not allow for adjustments to the pricing under a power purchased agreement for future changes in direct assigned transmission interconnection costs. NV Energy will also compute a $/MWh equivalent charge for Network Upgrade interconnection costs and assign that cost to a proposal as part of the bid evaluation process. Q71. Is there any preference as to whether PV projects are interconnected to NVE at the distribution or transmission level? A71. Interconnection requests for proposed projects are evaluated on a case-by-case basis, and so a generalized statement with regard to a particular project and its interconnection at the distribution or transmission level is not possible. 15 of 17   
  16. 16. Q72. If you have a solar project in the Eldorado Valley, what is the best interconnection point McCullough or Marketplace? A72. Proposals to the Spring 2010 Renewable RFP are evaluated on a case-by-case basis, therefore it is not possible to provide a general answer to this question. Q73. The 2010 pre-bidder materials contain a list of eligible Delivery Points (Mead 230kV, McCullough, etc.). Are these the only voltages and substations that will be considered by NV Energy? A73. In addition to the NV Energy interface points and voltages described on Page 4-10 of the 2010 Bid Protocol Document, NV Energy will consider renewable energy bids from Respondents proposing to deliver at the Mead 500kV interconnection. Q74. We have a planned large scale generation site (more than 500MW) that is broken into several smaller plants. We plan to submit a complete plant/project but the IR’s and site control documents refer to the overall generation site which is significantly greater than the single plant/project planned for submittal. Does this meet the 100% capacity requirement referenced in the RFP documents? Will adjustments be made internally to NVE to accommodate the fractional load studied in the overall site IR or would we need to submit a new IR for just the load referenced in the proposal? A74. If the Respondent can demonstrate that one facility at a power generation complex can be dedicated to NV Energy and separately metered from the other “plants” at the site, then NV Energy will consider that facility as being compliant with Section 3.2 of the pro forma power purchase agreement. With regard to interconnection costs, NV Energy will include all “Network Upgrade” costs for a interconnection request as part of the total customer costs evaluated for a project bid from that site (i.e., NV Energy will not prorate the Network Upgrade costs for a particular site among the various “plants” at the site). Q75. Section 4.6.1, of the 2010 Bid Protocol Document, titled “Additional Technical Information for the Facility”, states that the Respondent must describe any feasibility studies performed for the generating facility. Are the feasibility studies required related to (1) the operation of the generating facility at the designated location; (2) environmental, geotechnical, etc. studies that have been performed from the property on which the facility will be located; or (3) something else? A75. Please provide a summary of feasibility studies required related to (1) the operation of the generating facility at the designated location; (2) environmental, geotechnical, etc. studies that have been performed from the property on which the facility will be located; and (3) other feasibility studies that demonstrate the viability of the proposed project. Q76. With regard to Section 6, Transmission Interconnection Information: If the generation interconnection request had been submitted and accepted by the utility, is it a requirement for the acceptance of the proposal that a feasibility or system impact study be 16 of 17   
  17. 17. completed? Or is it acceptable to describe the status of the process with the transmission personnel? A76. A condition precedent for NV Energy to enter into PPA negotiations with any Respondent to the Spring 2010 Renewable RFP is the release of, at a minimum, a transmission interconnection feasibility study. Q77. Will NVE consider receipt of energy from the Navajo Generating station in northern Arizona and utilizing NVE existing firm transmission rights from Navajo to NVE loads in Nevada? A77. Due to a lack of firm Available Transfer Capability, NV Energy cannot utilize its existing transmission rights to import power from Navajo. Furthermore, as discussed in Section 4.7 of the Bid Protocol Document: “Respondents for generating facilities that have as their first point of interconnection, a transmission provider other than NV Energy (e.g., out-of-state, outside NV Energy’s balancing area, or a load serving entity other than NV Energy in NV Energy’s balancing area), should provide all information necessary to allow NV Energy to evaluate proposals, including but not limited to the following information: Delivery Point: Please specify the delivery point(s). The preferred delivery points for Nevada Power Company are Mead 230 kV, McCullough 230 kV, Harry Allen 500kV, McCullough 500 kV, and Crystal 500 kV. The preferred delivery points for Sierra Pacific Power Company are Midpoint 345 kV, Gonder 230 kV, and Hilltop 345 kV. Transmission: Please provide a detailed description of the transmission services that you expect to use to move the renewable energy to the delivery point from the point of interconnection. Identify the interconnection point of your project. If you have existing contracts for those transmission services, please provide a copy of the contracts. If you are in a process of acquiring the transmission path please provide copy of the transmission service request to transmission provider/s 17 of 17   

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