Wind RFP 2008 Technical Conference


Published on

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Wind RFP 2008 Technical Conference

  1. 1. Independent Evaluator Role and Comments For the Oklahoma Gas and Electric Company – Wind Energy RFP Technical Conference Oklahoma City, Oklahoma Presented by: La Capra Associates, Inc. New Energy Opportunities, Inc. Presented to: January 9, 2009
  2. 2. OVERVIEW <ul><li>Independent Evaluator (IE) Functions in RFP Process </li></ul><ul><li>IE Comments on Draft RFP </li></ul><ul><li>IE for this RFP — Who We Are </li></ul><ul><li>Interest in Prospective Bidder Comments </li></ul>
  3. 3. IE Functions for Wind Energy RFP <ul><li>RFP design process </li></ul><ul><ul><li>Advise utility </li></ul></ul><ul><ul><li>Comment on draft RFP </li></ul></ul><ul><ul><li>Assist in consideration of comments from interested parties </li></ul></ul><ul><li>Prior to evaluation of bids </li></ul><ul><ul><li>Work with OG&E to refine evaluation methodology, criteria, assumptions </li></ul></ul><ul><ul><li>Q&A: Review utility draft answers to bidder questions </li></ul></ul><ul><li>Bid evaluation </li></ul><ul><ul><li>Independently evaluate bids/review utility bid evaluation </li></ul></ul><ul><ul><li>If there is disagreement regarding winning bid(s), </li></ul></ul><ul><ul><ul><li>Utility determines winning bidder(s) </li></ul></ul></ul><ul><ul><ul><li>IE submits its evaluation to OCC </li></ul></ul></ul><ul><ul><ul><li>Subject to OCC determination </li></ul></ul></ul>
  4. 4. Comments on Draft RFP <ul><li>IE comments posted on OG&E website </li></ul><ul><li>Potential bids </li></ul><ul><ul><li>Power purchase agreements (PPAs)/WEPAs: 20-year terms sought </li></ul></ul><ul><ul><li>Utility-owned generation (UOG)—where OG&E may recover costs under cost-of-service ratemaking </li></ul></ul><ul><ul><ul><li>Utility acquires wind energy development assets from third party, with engineering, procurement and construction agreement (EPC) OR </li></ul></ul></ul><ul><ul><ul><li>Utility self-build </li></ul></ul></ul><ul><li>Objective: appropriate comparison of WEPA and UOG bids </li></ul><ul><ul><li>UOGs—accuracy and reasonableness of estimates </li></ul></ul><ul><ul><li>Differences in risk allocation between fixed-price $/MWh bids (WEPAs) vs. bids based on estimated costs and projected output (UOGs) </li></ul></ul>
  5. 5. Comments on Draft RFP —cont’d. <ul><li>Issues with Estimates: UOG bids </li></ul><ul><ul><li>Estimated output (MWh) </li></ul></ul><ul><ul><ul><li>Actual performance has historically been 10% below estimated performance </li></ul></ul></ul><ul><ul><ul><li>UOG bids should provide best available estimates, with references to analyses and data regarding historical underperformance </li></ul></ul></ul><ul><ul><ul><li>IE will adjust estimated performance if necessary to assure credible estimates </li></ul></ul></ul><ul><ul><ul><li>Overly optimistic energy projections will result in reduced non-price score </li></ul></ul></ul><ul><ul><li>Unscheduled maintenance </li></ul></ul><ul><li>Risk-adjustment of estimated energy prices: price firmness </li></ul><ul><ul><li>Output </li></ul></ul><ul><ul><li>Capital costs </li></ul></ul><ul><ul><li>Operating costs </li></ul></ul><ul><ul><li>Production tax credit (PTC) risks </li></ul></ul><ul><ul><ul><li>Utilization of PTC </li></ul></ul></ul><ul><ul><ul><li>Loss of federal PTC due to project delay </li></ul></ul></ul>
  6. 6. Comments on Draft RFP —cont’d. <ul><li>Issue: Term of evaluation for assessing levelized estimated cost of energy </li></ul><ul><li>20-year WEPA bids sought—term of evaluation—20 years </li></ul><ul><li>At time our comments were prepared, with respect to UOG bids, OG&E had not decided whether to use: </li></ul><ul><ul><li>25-year useful life/book depreciation with 25-year evaluation term (which IE had concerns with) OR </li></ul></ul><ul><ul><li>20-year book depreciation with 20-year evaluation term </li></ul></ul><ul><li>OG&E has now decided to use 20-year book depreciation with 20-year evaluation term for purposes of bid evaluation; IE concurs </li></ul>
  7. 7. Independent Evaluator for this RFP <ul><li>La Capra Associates, Inc. (La Capra Associates) </li></ul><ul><ul><li>John Athas, Managing Consultant </li></ul></ul><ul><ul><li>Carrie Gilbert and other La Capra Associates employees </li></ul></ul><ul><li>New Energy Opportunities, Inc. (NEO) </li></ul><ul><ul><li>Barry Sheingold, President, NEO </li></ul></ul><ul><li>La Capra Associates/NEO collaborations: Similar roles or advising on renewable energy RFPs </li></ul><ul><ul><li>Delaware </li></ul></ul><ul><ul><li>Massachusetts </li></ul></ul><ul><ul><li>New York </li></ul></ul><ul><ul><li>Rhode Island </li></ul></ul><ul><li>Other RFP experience: CA, OK, HI, UT, OR, AZ </li></ul>Independent Evaluator
  8. 8. Interest in Prospective Bidder Comments <ul><li>Areas of particular interest </li></ul><ul><ul><li>Reasonableness of requirement that proposed projects have a scheduled commercial operation date by 12/31/2010 </li></ul></ul><ul><ul><li>Impact of current financial environment on RFP </li></ul></ul><ul><li>We are interested in your comments and questions </li></ul><ul><li>Your input is important to the process </li></ul><ul><li>Please send copies of your comments to: </li></ul><ul><ul><li>John Athas*, La Capra Associates, Inc. [email_address] </li></ul></ul><ul><ul><li>Barry Sheingold, New Energy Opportunities, Inc. [email_address] </li></ul></ul><ul><ul><li>*This is an update to the names in the draft RFP Section 2.1 </li></ul></ul>