2015 Renewable RFP WebEx - PowerPoint Presentation

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2015 Renewable RFP WebEx

January 20, 2016

Agenda

PSEG Long Island Team Introductions

Disclaimer

2015 Renewable RFP Background and Goals

Selected RFP Discussion TopicsCommunicationsProduct DefinitionContractPricingSubmittal FeesEvaluation ProcessPost-selection ProcessOtherKeys to a Successful ProposalSchedule

2015 Renewable RFP WebEx – January 20, 2016

PSEG

Long Island Team Introductions

James Parmelee, Senior Manager

of Power

Resources and ContractsEd Petrocelli, Manager of Power ProjectsSteve Cantore, Manager of Power Asset ManagementLucyna Khazanovich, Manager of Fuel and Power Planning Susan Manessis, Engineer - Transmission Planning Robert Binder, Engineer – Efficiency and Renewables Planning and Evaluation2015 Renewable RFP WebEx – January 20, 2016

Disclaimer

This WebEx is being conducted for informational purposes only and information, data, or comments provided by PSEG Long Island during the WebEx are not to be construed as altering, modifying or replacing the requirements or contents of the 2015 Renewable RFP. PSEG Long Island’s agreement to make

m

aterial or non-material changes to the RFP arising from WebEx discussions should not be considered binding unless and until such changes appear in an addendum to the RFP. RFP Respondents are encouraged to carefully read and adhere to the Proposal requirements as articulated in the RFP and in written addendums thereto.

2015 Renewable RFP WebEx – January 20, 2016

2015 Renewable RFP Background and Goals

By resolution dated October 25, 2012,

the LIPA Board of

Trustees

authorized a plan to add 400 MW of new renewable energy generation to its resource portfolio through:An expanded feed-in-tariff program andA competitive procurementIn 2013 and 2014, this plan was implemented through the issuance of the Clean Solar Initiative II, the Clean Renewable Energy Initiative and the 280 MW RFPThese procurements achieved a portion of the 400 MW goalIt is now anticipated that approximately 210 MW of additional renewable capacity will be required to meet the goalHowever, more than 210 MW may be required if some of the projects from the 2013-2014 initiatives do not come to fruition2015 Renewable RFP WebEx – January 20, 2016

2015 Renewable RFP Background and

Goals (con’t)

To fill the gap, three procurement initiatives are planned. Responses to all three

procurements

are anticipated to be evaluated concurrentlyPart 1 - 2015 Renewable RFP - Open to any renewable resource 1 MW or larger using one point of interconnection and offering a fixed pricePart 2 - Fuel Cell Feed-in Tariff - The proposed tariff language is targeted for release for public comment during the 1st quarter of 2016. Solicitation will be for up to 40 MWsPart 3 - Commercial Solar Feed-in Tariff - The proposed tariff language is targeted for release for public comment during the 1st quarter of 2016. This solicitation is targeted to rooftop solar and carport solar projects greater than 200 kw but less than 1 MW in size. Up to 20 MW of projects may be selectedRenewable resources selected from the South Fork RFP and the soon-to-be issued Western Nassau RFP may also help fill the gap2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Communications

State law restricts communications during the RFP process, improper communications may result in bid disqualification.

All

questions and clarifications unrelated to interconnection inquiries concerning

the RFP Documents may be electronically submitted through the RFP website at http://www.pseglirenrfp.com/QandA.html. Answers along with the questions will be available on an anonymous basis to all registered users. The request for proprietary treatment will be evaluated and dispositioned by the Company.Prior to any interconnection inquiries or discussions a non-disclosure agreement must be executed between Respondent and PSEG Long Island. The NDA is located on the RFP website.PSEG Long Island contact information is provided in the RFP.2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Product Definition

Technology must produce electric power for injection into Long Island electric system from new “renewable” energy sources

Technology must be proven and commercially available

Applicable renewable energy sources include:

Solar, on and offshore wind, hydropower, tidal, and geothermal resourcesFuel cells that use 100% renewable energy sources and offer a fixed price (All other fuel cells should apply to the Fuel Cell Feed-in Tariff)Direct-fired generators using a biomass fuelStorage systems paired with the above renewable technologies provided that the associated energy is delivered to the same interconnection pointProjects must be > 1 MW (AC measured at the revenue meter) and newly constructed (a COD on or after the date of contract execution)Projects may be located off of Long IslandPower must be delivered via a new dedicated transmission lineCurrent and future costs associated with firm transmission and transmission upgrades for all systems other than Long Island electric system borne by Respondent2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Contract

Long term PPA with proposed term of 10-30 years

(

5-year increments)

Standard form PPA with options for different resource types will be available on the RFP websiteEach Proposal shall provide a “red-line” mark-up to the form of PPA with any comments, insertions, deletions, or other proposed changes, which must include proposed text, as applicable. Alternatively, the proposer may accept the terms and conditions of the PPA.Bids will only be accepted that offer a bundled product of electric energy, environmental attributes (RECs), and capacity2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Pricing

All proposed contract pricing must be firm and all terms and conditions must be open for acceptance through May 1,

2018

Respondents must offer a PPA with a flat Base Energy price (as described in section

6.11.1 of the RFP) for contract term with option to extend at reduced price In addition, Respondents must offer one or both of the following optionsPPA with a flat Base Energy price with option to purchase at end of term. The price will be the fair market value of the Project at the time the option is exercised, as agreed upon by the partiesPPA with a flat Base Energy price with option to purchase after 6 years. The price will be the fair market value of the project at the time the option is exercised, as agreed upon by the partiesPurchase Option - If the Project owner decides to sell the Project at any time during the contract term, LIPA will be given right of first refusal to purchase the facility at the same price offered from the presumed purchaser2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Pricing (con’t)

Respondents will provide a price that will be paid for Base Energy (energy produced in all hours

)

Production

is encouraged on weekdays from 2 to 6 pm. A separate additional payment for Peak Energy will be paid during these peak hours Respondents proposing Projects affected by future PTC or ITC modifications must: Provide pricing that assumes the PTC and ITC rules in effect as of April 15, 2016Provide alternative pricing that assumes the PTC or ITC is extended In the event the PTC or ITC is extended or modified, Respondents shall pass through these benefits to PSEG Long Island2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Submittal Fees

Submittal fee - $1/kW per Proposal

Respondents

who submit more than one

Proposal for the same interconnection point or project site must pay a separate fee for each ProposalSubmittal fees will be returned if Proposals are Not submitted in timely mannerIncomplete or non-responsiveNot selected and approved by the TrusteesProposal fees will be returned in a timely manner shortly after the completion of each evaluation phase described in Section 7.1.6 and no interest will be paid on refunded amounts2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Submittal Fees (con’t)

U

nrecovered

P

roposal evaluation costs will be recovered from Respondents with executed contracts via lump sum payments at the start of each contract Payments associated with individual contracts will be in proportion to the MW size of the contract relative to the total MWs procured via the RFPEach Project contract will be allowed an adder for the first five years of the contract to recover the lump sum paymentThe adder will be calculated as a lump sum payment divided by the projected MWh of the unit’s output over the 5-year period. Once the projected amount of energy has been produced, payment for the adder will cease2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Evaluation Process

A three-phased Proposal evaluation process, based on New York State Comptroller requirements, will be employed:

Phase 1: Determine the responsiveness of each proposal with a “pass/fail” designation.

Phase 2

: Consists of an initial qualitative review of all of the criteria in the RFP as well as a levelized cost analysis of each individual proposal or proposal option.Phase 3: Consists of all-in cost quantitative analysis, enhanced qualitative analysis and cost of system upgrades for portfolios of projects.Those proposals that are found to be superior in Phase III are submitted to the LIPA Board of Trustees as PSEG Long Island’s suggestions for proposals that should proceed to contract negotiations2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Post-Selection Process

Upon selection by the Board of Trustees, PSEG Long Island and the selected Respondent(s) will negotiate contracts. The redlined PPAs submitted with the proposal will be the starting point for negotiations

.

Negotiated PPAs shall

not be binding until approved by LIPA’s Board of Trustees, the NY State Attorney General and the NY State ComptrollerContracts may not be executed until the LIPA Board of Trustees authorizes executionFor projects requiring SEQRA approval, Trustees may not vote to authorize execution until such approval has been received and documentedFor projects subject to Article 10 of the New York Public Service Law, under the jurisdiction of the New York State Board on Electric Generation Siting and the Environment, a condition precedent to the PPA becoming effective is that the Respondent must receive a certificate of environmental compatibility and public need.2015 Renewable RFP WebEx – January 20, 2016

Selected RFP Discussion Topics: Other

LIPA is not offering property for sale or use for any project

with the exception of substation property that is required for the interconnection of those projects in accordance with the LGIP or the SGIP.

For those instances where proposed projects are located in close proximity to each other consideration will be given for construction of a new substation in that particular area if there is enough interest from Respondents

and if it is economically viable. A link to a list of County/Town/City officials’ titles and names will be provided on the RFP website to facilitate communication between municipalities and Proposers. 2015 Renewable RFP WebEx – January 20, 2016

Keys to a Successful Proposal

Proposal received by June 1, 2016, 3 PM EDT deadline

Proposal delivered with required submittal fee as a certified check or

bank

check made payable to PSEG Long IslandAll required documents and forms supplied with proposalNo material changes after submittal of the proposalFirm pricing through May 1, 2018Prompt response to clarifying questions posed by PSEG Long IslandInitial power delivery must be no later than May 1, 20222015 Renewable RFP WebEx – January 20, 2016

Keys to Successful Proposal (con’t)

Community acceptance

D

ocumented evidence of local outreach and support from the local community, including elected officials and civic groups

Required permits in hand or demonstration with a reasonable degree of confidence that such permits can be obtained Competitively pricedExperienced teamRespondent has demonstrated experience in developing projects of similar size, technology and scopeAbility to implement2015 Renewable RFP WebEx – January 20, 2016

Schedule

ACTIVITY

DATE

Release of RFP

December 22, 2015Question Submittal DeadlineMay 4, 2016

Notice of Intent to Bid Deadline

May 18

, 2016

Proposal Submittal Deadline

June 1,

2016, 3 PM EDT

Proposal Selection(s) (planned)

January, 2017

Execution of Contract(s) (planned)

3

rd

and 4

th

Quarter of 2017

1

Firm Pricing Required Through

May 1, 2018

Latest COD

2

May 1, 2022

3

1

If

required, SEQRA must be completed prior to contract execution.

2

Staggered

startup will be allowed to occur in blocks no smaller than 25% of Project size with a minimum

of

1 month between block startup with total Project capacity installed within two years. Power delivery from the first block shall be no later than May 1,

2022.

3

First of the month CODs are required.

2015 Renewable RFP WebEx – January 20, 2016