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Prepared for: FirstEnergy Ohio Utilities WEBINAR: FirstEnergy Ohio Utilities Request for Proposals for 2013 Ohio Compliant Renewable Energy Credits.

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Presentation on theme: "Prepared for: FirstEnergy Ohio Utilities WEBINAR: FirstEnergy Ohio Utilities Request for Proposals for 2013 Ohio Compliant Renewable Energy Credits."— Presentation transcript:

1 Prepared for: FirstEnergy Ohio Utilities WEBINAR: FirstEnergy Ohio Utilities Request for Proposals for 2013 Ohio Compliant Renewable Energy Credits

2 2 Thank you for attending FirstEnergy Ohio Utilities Request for Proposal (RFP) for 2013 Ohio Compliant Renewable Energy Credits Webinar Our session will begin shortly Our key presenter this morning: Dan Bradley Director, Navigant Consulting Good Morning!

3 3 Any statements in this Webinar presentation describing or referring to documents and agreements are summaries only, and are qualified in their entirety by reference to such documents and agreements as provided in the RFP The governing documents are: »RFP Bidder Rules »Communications Protocol »Purchase & Sale Agreement (PSA) »Qualification Application »Credit Application »Pricing Proposal »Confirmation of the PSA Disclaimer

4 4 Process for the Webinar RFP Communications Protocol Overview Eligibility & Requirements PSA Overview Delivery Requirements Credit Application & Requirements Proposal Submittal Requirements Evaluation & Selection Execution of PSA(s) Target Schedule of Events PUCO Certification Process Questions about the RFP Agenda

5 5 Navigant is muting all phone lines During the Webinar, please submit your questions via the chat function o Ask questions any time via chat o You will not be identified to other participants o We will accumulate all questions and address them in the Frequently Asked Question (FAQ) section of the RFP Web site o Certain questions may be addressed during the Webinar Process for the Webinar

6 RFP Web site 6 Visit the RFP Web site for more details http://www.firstenergycorp.com/OH2013RECRFP

7 7 Important to note that in order to ensure a fair and impartial procurement process, contact with FirstEnergy Ohio Utilities is restricted during the RFP process. Navigant is conducting this RFP for FirstEnergy Ohio Utilities Proposers may: »Submit questions today via chat »Submit questions via RFP Web site using the Contact Us link »Submit questions via email to rfp@navigant.com »Call the Navigant Hotline at (516) 876-4036 »All correspondence pertaining to the RFP should be directed through the RFP Web site or through Navigant RFP Communications Protocol RFP Communications Protocol is posted in the Supplier Documents section of the RFP Web site

8 8 The objective of this RFP is for FirstEnergy Ohio Utilities to select qualified proposals for Ohio Compliant Renewable Energy Credits (RECs) for purposes of complying with the renewable energy and solar energy resource requirements of R.C. 4928.01, R.C. 4928.64, and R.C. 4928.65 (Ohio Law) FirstEnergy Ohio Utilities is seeking to purchase a fixed number of PUCO-certified SRECs and/or RECs to be Delivered on or before February 14, 2014 in the following quantities: »6,500 All-State SRECs; »100 In-State SRECs; »145,000 All-State RECs; and »120,000 In-State RECs. FirstEnergy Ohio Utilities, at its sole discretion, may select more or fewer quantities of SRECs and/or RECs. Overview

9 Geographical Requirements RECs and SRECs being requested under the RFP: »6,500 PUCO-certified SRECs generated either: within the State of Ohio, or deliverable into Ohio pursuant to PUCO determination. »100 PUCO-certified SRECs generated from within Ohio. »145,000 PUCO-certified RECs within the State of Ohio, or deliverable into Ohio pursuant to PUCO determination. »120,000 PUCO-certified RECs generated from within Ohio.

10 Eligibility and Requirements All RECs and SRECs proposed pursuant to this RFP must: »be or have been derived from In-State or All-State PUCO-certified (or eligible to be, and will ultimately be, PUCO certified) solar or non-solar renewable energy resource generating facility(ies) as applicable; »be or have been generated no earlier than January 1, 2011 and no later than December 31, 2013; »be consistent with any and all applicable Ohio laws, rules and regulations, including without limitation, rules and regulations promulgated by the PUCO; »be Delivered to FirstEnergy Ohio Utilities no later than February 14, 2014; »be Delivered to FirstEnergy Ohio Utilities via the PJM EIS GATS platform; and »become the sole property of FirstEnergy Ohio Utilities. 10 This RFP is NOT seeking proposals for the following: Long term proposals for delivery of RECs or SRECs in future years Associated energy, capacity or ancillary services

11 11 All terms and conditions incorporated in the PSA are considered final and non-negotiable The PSA requires compliant Ohio RECs and/or SRECs (e.g., PUCO certified, PJM GATS registered) Winning Proposers must be able to meet all requirements of the PSA, and failure to do so will result in exclusion of the Proposers proposal from further consideration The PSA is posted in the Supplier Documents section of the RFP Web site PSA Overview

12 Firm Deliveries (Not Unit Contingent) All RECs and SRECs Delivered pursuant to the PSA executed under this RFP shall be firm and not unit contingent In the event a successful Proposer fails to secure the quantity of RECs and/or SRECs from the renewable generating facility that the Proposer originally planned to use to provide such RECs and/or SRECs, it remains that successful Proposers obligation to Deliver to FirstEnergy Ohio Utilities the quantity of RECs and/or SRECs set forth in the PSA 12

13 Credit Application Prospective Proposers are strongly encouraged to submit a Credit Application by October 8, 2013 Submitting a Credit Application does not bind a Prospective Proposer to submit a Proposal in this RFP Benefit of Submitting by October 8: Prospective Proposers who submit a Credit Application by October 8, 2013 may be provided feedback from Navigant and FirstEnergy Ohio Utilities prior to the Proposal Due Date and may have an opportunity to make any needed corrections or modifications to its Credit Application Credit applications will be accepted by FirstEnergy Ohio Utilities and Navigant until October 14, 2013 »Proposers may wait and provide their credit information simultaneously with their proposal »If credit information is provided simultaneously with its Proposal the Proposer foregoes the opportunity to make any needed corrections or modifications Proposers who do not provide adequate credit information will be deemed ineligible and their Proposals will not be considered for further evaluation 13

14 Credit Requirements: Applications Due Credit Applications are required to be submitted by all Proposers and are used to determine the amount (if any) of Security required under the PSA Proposers who do not provide adequate credit information will be deemed ineligible and their Proposals will not be considered for further evaluation Security is determined, in part, by the total notional dollar value of each Proposal(s) To calculate the total notional dollar value of your Proposal(s), multiply the quantity of RECs and/or SRECs to be Delivered by the proposed price for each REC and/or SREC »If the total notional dollar value of a PSA under this RFP is less than $250,000, no security is required (provided the Proposer has no special conditions e.g., in bankruptcy) »If the total notional dollar value of the PSA is in excess of $250,000 and if FirstEnergy Ohio Utilities has determined that Proposer does not have an adequate credit rating to support the credit required for the PSA, then the Proposer shall be required to post and maintain Security in an amount of 5% of the total notional dollar value of the PSA 14

15 Credit Requirements: Example Calculations Ex 1. Notional Value Less than $250,000 Ex 2. Notional Value More than $250,000 and Not Adequately Rated Ex 3. Notional Value More than $250,000 and Adequately Rated 2013 RECs Proposed10100,000 REC Price Proposed (EXAMPLE ONLY, NOT INDICATIVE OF MARKET PRICES) $5.00 Delivery Years (2013 Only)111 Total Notional Dollar Value$50$500,000 Security Required (5%)None$25,000None In the table below, there are three examples of credit requirements for the purpose of exemplifying the calculations The volume and price in the table below are examples only and are not intended to represent market prices or expectations 15

16 Credit Requirements: Posting of Security If FirstEnergy Ohio Utilities has determined that a Proposer does not have an adequate credit rating to support the credit required for the PSA, then, if selected as a winning Proposer in this RFP, the Proposer must post Security by October 22, 2013 and maintain such Security in an amount of 5% of the total notional dollar value of the PSA Proposers are not required to post any Security unless they are selected and until the PSA has been executed by the Proposer Seller shall post such Security in the form of: »Letter of Credit in the form of Appendix B in the PSA; or »Guaranty in the form of Appendix C in the PSA; or »Cash; or »Another substantially similar form approved in advance by FirstEnergy Ohio Utilities. Proposers shall receive back a corresponding percentage of the Security upon Delivery of the 2013 RECs and/or SRECs based on the percentage of RECs or SRECs Delivered 16

17 17 To participate in the RFP, a Proposer must meet the qualification requirements as detailed and must submit a complete Proposal All proposals must be submitted by email and received by Navigant no later than 3:00 pm EDT on October 14, 2013 To submit a proposal, send one email to rfp@navigant.com which includes all of the following completed documents: »Credit Application (either submitted by October 8, 2013 or simultaneously with the Proposal); »Qualification Application; »Pricing Proposal(s); and »Confirmation of PSA Note: Faxed or hard copy proposals will not be accepted All documents and forms listed above are posted in the Supplier Documents section of the RFP Web site Proposal Submittal Requirements

18 Qualification Application The Qualification Application is available on the RFP Web site As previously stated, FirstEnergy Ohio Utilities is not seeking unit contingent SRECs, however Proposers must include a detailed description of the source of the RECs and/or SRECs proposed in its Qualification Application, as follows: »Proposers who are proposing to sell RECs and/or SRECs from one or more specific solar or renewable energy generating facility(ies), must provide the required facility information as applicable; »Proposers who are proposing to sell RECs and/or SRECs from a portfolio, aggregation, brokerage or other means must describe in detail its proposed means to acquire the rights to REC and/or SRECs in the quantities proposed in its Proposal The Qualification Application has been developed as the form to provide the required source information to FirstEnergy Ohio Utilities 18

19 Pricing Proposal The Pricing Proposal form is available on the RFP Web site in Microsoft Excel format All Pricing Proposals shall specify the total number of RECs and/or SRECs proposed for Delivery to FirstEnergy Ohio Utilities Proposers may submit Multiple Pricing Proposals provided that each such Pricing Proposal offers different REC and/or SREC Quantities at different prices and such Multiple Pricing Proposals must be structured in a way that, should all Pricing Proposals be selected, the Proposer is capable of Delivering the total REC and/or SREC Quantities proposed 19

20 20 All Proposers must provide a Confirmation of PSA form signed by an authorized representative, which confirms the understanding that: »Proposers are able to meet all requirements of the PSA; and »All terms and conditions incorporated in the PSA are considered final and non-negotiable The Confirmation of PSA is posted in the Supplier Documents section of the RFP Web site Confirmation of PSA

21 Evaluation & Selection: Phase 1 Qualification Phase 1 is a proposal qualification evaluation to determine whether the Proposal and its proposed RECs and/or SRECs are eligible and meet the requirements set forth in the RFP In addition, Proposals must demonstrate that: »the Proposer has or will own the right to all RECs and/or SRECs associated with their Proposals in their entirety and be capable of transferring undivided rights to those RECs and/or SRECs to FirstEnergy Ohio Utilities without restriction »the Proposer accepts all terms and conditions of the PSA without exception During Phase 1, Navigant may, but is not obligated to, request additional information and materials from any Proposer for qualification of its proposal All Proposers will be notified of their qualification status by October 16, 2013 21

22 Evaluation & Selection: Phase 2 Proposal Sorting 22 Only pricing proposals from Phase 1 qualified bidders will be evaluated during Phase 2. Phase 2 is the sorting of qualified pricing proposals to determine what proposals will be awarded Step 1 All qualified proposals, subject to credit requirements, will be divided by category and sorted by Proposed price Any SRECs/RECs not selected in one category will be considered in other eligible category(ies) Larger volume proposals will be preferred if there are competing proposals at the same price Step 2 The second step is comparing the total notional dollar value of each Pricing Proposal offered by each Proposer with the total credit available to that Proposer, based on the Proposers credit rating and/or the partys acceptance of an agreement to post appropriate Security If the total notional dollar value of the Proposal offered by a Proposer exceeds the Proposers credit limit, then Navigant will only consider the Proposers proposed RECs or SRECs up to the amount of its credit limit FirstEnergy Ohio Utilities reserves the right to limit the total amount from any one party in order to preserve a diversity of suppliers FirstEnergy Ohio Utilities reserves the right to select more RECs in a particular REC Type category based on the sort order Proposers will be notified of any proposal award on October 17, 2013

23 Execution of PSAs Immediately following Phase 2, FirstEnergy Ohio Utilities shall prepare a PSA incorporating information from the Winning Proposals PSA(s) will by transmitted to the Winning Proposers via email and hard copy »Within one (1) business day of receipt: Winning Proposer shall execute and return the applicable PSA to FirstEnergy Ohio Utilities via an email with a PDF of the executed PSA; and »Within three (3) business days of receipt: Winning Proposer shall execute and return a hard copy (printed copy) PSA to FirstEnergy Ohio Utilities Proposers who have particular difficulties with these requirements may make special arrangements with Navigant Failure of a Winning Proposer to execute the applicable PSA via PDF and return email within the timeframe set forth above (or otherwise agreed upon with Navigant) may result in the disqualification of such proposal 23 The execution of a PSA by both FirstEnergy Ohio Utilities and the Proposer will constitute a Winning Proposal

24 24 Target Schedule of Events ActivityDate Issue RFPSeptember 12 RFP Webinar (11:00 AM EDT)September 19 FAQ DeadlineSeptember 26 FAQ Responses Posted on Web siteOctober 2 Credit Information Preferred Due DateOctober 8 Proposals Due Date (3:00 PM EDT)October 14 Notification of Proposal QualificationOctober 16 Notification of AwardOctober 17 Executed PSAs (PDFs) due back from Successful ProposersOctober 18 Hard copy PSAs due back executed from Successful ProposersOctober 22 Posting of Security (if applicable) October 22

25 PUCO Certification Process All proposed RECs or SRECs must be produced from PUCO certified facilities prior to Delivery to FirstEnergy Ohio Utilities To become a PUCO certified facility, a Proposer must first follow the application instructions and complete the online application for Certification of a Renewable Energy Resource Generating Facility available at the commissions Web site: http://www.puco.ohio.gov/puco/index.cfm/puco-forms/renewable- energy-resource-generating-facility-application-for-certification/ http://www.puco.ohio.gov/puco/index.cfm/puco-forms/renewable- energy-resource-generating-facility-application-for-certification/ All RECs or SRECs must be transferred using PJM EIS GATS, which requires its own separate registration 25

26 Questions about the RFP Questions about the RFP should be submitted by potential Proposers to Navigant via email to rfp@navigant.comrfp@navigant.com Questions can be submitted on or before FAQ Deadline of September 26, 2013 at 5:00 PM EDT Responses to questions will be posted anonymously on October 2, 2013 on the FAQs section of the RFP Web siteFAQs section of the RFP Web site While Navigant and FirstEnergy Ohio Utilities will review and attempt to answer all questions, Navigant and FirstEnergy Ohio Utilities reserve the right not to answer any question 26

27 Questions? Remember: Submit via chat function Chat function will remain open for 10 minutes Answers will be posted on the RFP Web site 27 All correspondence pertaining to the RFP should be directed through the RFP Web site or through Navigant Submit all questions via email to rfp@navigant.com or call the Navigant Hotline at (516) 876-4036 rfp@navigant.com All correspondence pertaining to the RFP should be directed through the RFP Web site or through Navigant Submit all questions via email to rfp@navigant.com or call the Navigant Hotline at (516) 876-4036 rfp@navigant.com

28 Key C O N T A C T S ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2011 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. Key C O N T A C T S ©2012 Navigant Consulting, Inc. Confidential and proprietary. Do not distribute or copy. 28 ENERGY Dan Bradley Director 646.227.4835 New York City, New York dbradley@navigant.com Dan Bradley Director 646.227.4835 New York City, New York dbradley@navigant.com


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