Local Capacity Requirements (“LCR”) RFO

Bidders Conference

SCE hosted the 2013 Local Capacity Requirements Request For Offer (LCR RFO) Bidder’s Conference on October 16th, 2013 at the Pacific Palms Resort in City of Industry, California. For access to the webex and the conference presentation, please click on the links below:

• WebEx
• Conference Presentation

Energy Storage (ES) Webinar

In order to provide more detailed information and answer questions on the Energy Storage (ES) product, SCE conducted an Energy Storage Webinar on November 15, 2013 from 9:00am – 10:30am PPT via WebEx. For access to the WebEx and presentation, please click the links below:

• WebEx
• Webinar Presentation

Energy Efficiency (EE) Webinar

In order to provide more detailed information on the Energy Efficiency (EE) product, SCE conducted an Energy Efficiency Webinar on November 15, 2013 from 1:30pm – 3:00pm PPT via WebEx. For access to the WebEx and presentation, please click the links below:

• WebEx
• Webinar Presentation

1. What are acceptable start dates for delivery of projects?
    

   Regardless of the start date for the delivery period, the delivery period must include the entire calendar year of 2021 (from 1/1/2021 to 12/31/2021). Along with that criterion, the delivery period for projects that are directly connected to (or directly connect to a lower voltage substation that electrically connects to) or rely on customers that are directly electrically connected (or rely on customers that are directly connect to a lower voltage substation that electrically connects to) to the Goleta, Johanna or Santiago High Voltage substations must start delivering between 1/1/2015 to 1/1/2021. The delivery period for all other projects in the Western Los Angeles Basin or Moorpark sub-areas must start delivering between 1/1/2018 to 1/1/2021.

2. What are acceptable contract durations?
    

   Bidders can propose any duration for the delivery period so long as some portion of project’s delivery period includes the entire calendar year 2021 (from 1/1/2021 to 12/31/2021). SCE prefers a 20 year delivery period. SCE recognizes that shorter contract durations may be more conducive for certain resource types, such as some demand-side programs.

3. Is there a minimum size in terms of capacity for each technology type?
    

   Yes, there are size requirements associated with each technology. Please refer to RFO Transmittal letter for specifics.

4. How much is SCE looking to procure?
    

   SCE is authorized to procure 1400 to 1800 MWs of new resources in the Western Los Angeles Basin sub-area and 215 to 290 MWs in the Moorpark sub-area to meet LCR needs by 2021.

5. Will SCE consider competitive Offers in excess of the MW amounts authorized by the LTPP decision?
    

   SCE will consider all competitive offers. However, at this time, SCE does not intend to procure resources above the authorized procurement quantities.

6. Is there a bid deposit requirement?
    

   SCE does not require a bid deposit to participate in the LCR RFO. Applicable posting requirements will commence once any agreements are executed.

7. Can a single bid include multiple technology types? (e.g. a renewable project with a storage component)
    

   Yes, bids can include multiple technology types. Bidders should make the proposed project structures clear in their Indicative Offers and SCE will work with bidders to draft contracts appropriately.

8. Will SCE consider an Indicative Offer if all gen-tie rights-of-way (or suitable option agreements) are not in-hand when the Indicative Offer is submitted?
    

   Yes. SCE is not expecting all rights-of-way to be secured by the Indicative Offer submittal date.

9. Will SCE help make criteria pollutant Emission Reduction Credits (ERCs) and/or emissions offsets available to proposed projects?
    

   No. SCE will not be making any ERCs and/or offsets available to bidders. It is the bidder’s responsibility to secure those items for their project.

10. Who is responsible for procuring emission credits?
     

    It is the responsibility of the developer to procure emissions credits for its facility.

11. Do complete indicative offers need to include both a hard copy as well as a standard flash drive? Do we need to deliver complete indicative offers to both Jesse Bryson and Gene Lee at SCE or will a single submittal to SCE and an additional submittal to the Independent Evaluator (IE) suffice?
     

    Indicative Offers should be delivered to either Gene Lee or Jesse Bryson at SCE via a standard flash drive. Hard copies are not required. The IE will be at SCE's office to open Indicative Offer submittals; thus, a separate submittal to the IE is not required.

12. Do offers at the same site with multiple technological configurations need to submit complete and separate Indicative Offer Submittal Packages or can a base offer be submitted with appropriate addendums for various configurations (price and performance)?
     

    The clearest manner to indicate separate offers is by completing a separate Indicative Offer package for each offer. If a bidder believes that submitting "addendums" for various configurations will be clear, then SCE will review the submitted addendums. However, a complete and separate set of Excel appendices will be necessary for each offer by the Final Offer submittal date.

13. Do easements / rights-of-way need to be in place prior to bid submission for ALL lateral infrastructure to include water and fuel lines or is Site Control the physical site and control of electrical interconnection rights-of-way?
     

    SCE will be requiring site control of the physical site only by the Indicative Offer submittal date.

14. If two developers are using the same parcel of land, but each has control over their separate footprints, would that qualify as appropriate Site Control? (i.e., if someone is leasing a piece of a parcel of land)
     

    Yes.

15. Is Site Control required for "Behind the Meter" projects?
     

    No, site control is not necessary for a “behind the meter” project.

16. Is it possible to get facility demographic information on the load areas or any information that may provide the estimated number of facilities by SIC codes?
     

    SCE can provide data about customers by substation but the type and level of disaggregation for this data will be determined by CPUC customer data privacy rules (e.g., 15/15 Rule). This information is available here.

17. If a counterparty has previously executed NDAs with SCE for prior business, is a new NDA required for submitting an indicative offer?
     

    It depends on the NDA. SCE encourages the bidder to submit the previously executed NDA that it believes is sufficient along with its Indicative Offers.

18. Is there a goal (%) related to small businesses/WDVMBEs?
     

    No. There is no specific goal for small business owners or WDVMBE, but SCE encourages diverse business enterprises to participate in the LCR RFO.

19. Can a bidder develop/propose a hybrid product?
     

    Yes. Bidders can develop/propose hybrid products. SCE will work with bidders to create the appropriate form of contract for such offers.

20. With regards to the PPA, how do we make a redline prior to submitting? How specific should we get?
     

    SCE prefers that bidders submit redlines through a deltaview or workshare program file along with a clean word version of the changes. Bidders should make a judgment as to how specific their changes should be. If the bidder believes there are major changes needed to an agreement, then submitting conceptual deal points may be more efficient towards completing an agreement. Otherwise, detailed specific changes are always helpful towards completing a negotiation.

21. Does a repower project qualify for the LCR RFO?
     

    The LCR RFO is for procurement of incremental new resources. A repower project that does not increase the existing MW of a facility does not qualify as an incremental new resource. For more information about the eligibility requirements of repower projects, see section B.1.4 of the Transmittal Letter.

22. What is the minimum project life that SCE will consider?
     

    New build conventional gas fired generation and combine heat and power require a 30-year design life. The requirement does not apply to renewables, energy efficiency, demand response, and energy storage.

23. My site is near the border of an LCR sub-area. How can I check if it qualifies?
     

    Please submit specific site qualification inquiries to LCR.RFO@sce.com and provide the information outlined in this document.

24. Is site control required prior to Indicative Offer submittal?
     

    Site Control is not required prior to indicative offer submittal. Projects with site control will have a benefit during the indicative offer evaluation.

25. If a bidder plans to present alternative situations and combinations of technologies, should these be separate bids or together? How much flexibility do bidders have?
     

    If you have specific questions about your offer, please contact SCE at LCR.RFO@sce.com. Bidders do have flexibility and SCE encourages bidders to make many offers. Please submit separate offer sheets (i.e., separate spreadsheets) for each technology, and identify in the offer letter whether the pieces are mutually inclusive (must be selected as a package), mutually exclusive (SCE can only select one), or cafeteria-style selection.

26. For the 30 year certification of the site, is that done by a third party evaluator or SCE?
     

    For certification of useful life of a project, the agreements provide: “Project (a) has a remaining design life of at least thirty (30) years after the Initial Delivery Date as attested by an engineering assessment performed by a professional mechanical engineer (with experience acceptable to SCE in its sole discretion) licensed by the State of California; . . .”

1. Will the Fast Track interconnection process (for small resources) satisfy the requirement for full deliverability?
    

   No. The Fast Track process does not provide a path to full capacity deliverability status. Bidders should consult the appropriate tariff for complete information.

2. Can a project deliver to Sylmar substation?
    

   No. The Sylmar substation is not an acceptable interconnection point for this RFO.

3. The transmittal letter says that acceptable points of interconnection include substations that are connected to Chino, Gould and other substations. Are projects connected to other subs on TRTP acceptable? For example, would a PPA offered off a project connecting to Whirlwind be accepted?
    

   LCR resources are required to directly connect to the identified LCR substations or directly connect to a lower voltage substation that electrically connects to these substations. If an A-level substation is not listed or does not have LEFs, they are not within the boundaries of LCR.

4. Figure I-2 in SCE’s Procurement Plan does not show Locational Effectiveness Factors (LEFs) for substations North of Gould, East of Chino, and West of La Cienega. Should we assume substations further out have zero or negative LEFs?
    

   LCR areas are defined by A-Level substations in the West Los Angeles Basin and Moorpark subareas with positive LEFs. LCR resources are required to directly connect to the identified LCR substations or directly connect to a lower voltage substation that electrically connects to these substations. SCE has provided a list of all LCR A-Level substations in the Transmittal Letter. If an A-level substation is not listed or does not have LEFs, they are not within the boundaries of LCR.

   Currently, the CAISO transmission study shows a negative LEF for the Chino substation, which indicates a resource that connects to Chino will currently not meet or reduce LCR needs. The CAISO is conducting new studies that will likely lead to updated LEFs. SCE will use the most current LEFs at the time of evaluation to determine eligibility and value.

5. Will load-reduction projects on the 66KV circuits East of Goleta count as helping with the Goleta constraint?
    

   Programs that reduce load for customers that directly connect to Goleta or directly connect to a lower voltage substation that electrically connects to Goleta will qualify as LCR resources if they satisfy all other LCR requirements and attributes.

6. How is the interconnection deposit requirement structured?
    

   The first security posting of 15% of the Phase I Study costs is due after the Phase I Study. A second security posting of an additional 15% is due after the Interconnection Agreement is executed (for a total of 30% based on the lower of Phase I or Phase II Study costs). The final security posting is due at the start of construction (for a total of 100% of the lower of Phase I or Phase II Study costs).

7. Who is responsible for payments of interconnection costs and application fees?
    

   The developer is responsible for interconnection application fees. Interconnections costs are paid by the developer or the CAISO’s load, depending on the type of cost.

8. If a project is awarded a PPA, what happens if there are issues with the interconnection process that may delay the start date?
    

   The various contracts address potential delays to the commercial operation deadline, but, generally, the agreements allow for such delays. Please review the contract for your technology type for more details.

9. What does Full Capacity Deliverability Status (FCDS) mean?
    

   According to the CAISO Tariff, the FCDS definition is “Full Capacity Deliverability Status entitles a Generating Facility to a Net Qualifying Capacity amount that could be as large as its Qualifying Capacity and may be less pursuant to the assessment of its Net Qualifying Capacity by the CAISO.” This means that a project is able to fully deliver all of its rated output on to the transmission system and that the project is eligible to offer and provide resource adequacy. Very often, FCDS requires incremental deliverability network upgrades.

10. Can we interconnect to feeders downstream or radial substations (distribution voltage), including those of the three identified COD 2015 substations (Johanna, Santiago, and Goleta)?
     

    Yes. All LCR resources are required to directly connect to the identified LCR substations or directly connect to a lower voltage substation that electrically connects to these substations. This requirement is applicable to Johanna, Santiago, and Goleta substations.

11. Will SCE require interconnection cost estimates for short-listing purposes?
     

    No. However, if a project has cost estimates based on interconnection studies, SCE is requesting the bidder to provide those with their offer.

1. Will projects selected for short-listing be public?
    

   No.

2. Do all bids need to qualify for RA, both on supply side or demand side?
    

   Although SCE is willing to accept Indicative Offers for projects that do not meet existing RA rules, SCE may ultimately conclude that Final Offers must qualify for RA in order to be selected. For example, under the current RA rules, a demand response resource must be available for 4 hours and for 3 consecutive days to qualify for RA. SCE is examining flexibility of these criteria for certain resource types, such as behind the meter resources (e.g., demand side management) that reduce LCR need. For example, SCE is working with CAISO and CEC to measure the impact of shorter duration resources (i.e., 2 hour dispatch) on LCR requirements. Any additional information received by the CAISO and CEC will likely be incorporated into the final valuation and selection process.

3. Price forecasting assumptions include current CAISO ancillary services but CAISO is looking to create a flexible ramping / capacity product. How is this considered in the evaluation?
    

   SCE may consider these products in the qualitative assessment of the offer.

4. Will offers be evaluated on an hourly or 5-minute basis?
    

   SCE will evaluate offers based on the full range of unit capabilities, but currently SCE does not use forecasted prices on a 5-minute basis for any technology.

5. What discount rate does SCE use for the NPV evaluation?
    

   10%.

6. Will renewables be exclusively evaluated by their value as an LCR or will there be an incremental value added for being renewable?
    

   Renewable projects will be evaluated consistent with all other technologies. Currently, SCE will consider their ability to meet RPS requirements in the evaluation as a qualitative component. SCE is assessing the need for using a quantitative approach.

1. What are the requirements for an energy storage device to provide RA and how will SCE manage the charging and discharging of the device?
    

   Although the RA rules for energy storage have not been developed yet, SCE assumes at this time that, consistent with other resources, a device needs to be capable of running for four hours for three consecutive days, regardless of how the unit is actually dispatched during operation. If SCE is the Scheduling Coordinator, SCE will charge and discharge the storage unit per the CAISO tariff and consistent with the RA rules while seeking to maximize the market value of the resource.

2. How will SCE’s evaluation account for the ability of storage to mitigate large up and down ramps?
    

   SCE’s valuation model seeks to find a financially optimal schedule based on the energy storage device’s operational characteristics and forecasted energy and ancillary service prices.

3. Which environmental costs related to energy storage are SCE responsible for?
    

   SCE is responsible for the GHG costs associated with the charging energy. The responsibility for other environmental costs, if any, would be clarified during the negotiation of a definitive agreement.

4. What is the difference between a storage project and a storage unit in the energy storage PPA?
    

   A storage project can be comprised of several storage units, such as a 10 MW storage project composed of five 2 MW storage units. Some sections of the contract are applicable to the storage project as a whole (e.g., metering and the need for a single meter), but other sections of the contract are applicable to each storage unit individually (e.g., availability of units).

5. How is the interconnection application process done for energy storage as compared to traditional sources that usually trigger upgrades, since energy storage, by nature, can reduce or avoid upgrades?
    

   Currently, the interconnection process for energy storage resources is the same as generation resources

6. Can SCE provide any more details regarding the depth of discharge and frequency of discharge? Will the energy storage be required to provide power beyond the 4 hour period and if so, for how long? How frequently will the 4 hour power requirement (or longer) be required annually?
    

   The energy storage unit will only be required to provide power up to the Max Discharge (MW) that is offered by the bidder and eventually set in the Energy Storage Agreement (ESA). Frequency or cycle limitations and depth of discharge are also set by the bidder’s offer and are made part of the ESA in Appendix 1.01, Part C. For purposes of Resource Adequacy (RA) reporting, under the current RA rules, a resource must be capable of providing 4 hours of discharge over 3 consecutive days to qualify for RA. Actual operation of the unit will depend on market conditions and CAISO dispatch subject to the resource restrictions.

7. It appears that SCE is looking for a load shifting/peak shifting type of installation versus a frequency response or responsive reserves type installations. Is that the case, are considerations given to other potential storage applications? These are different types of installations with different technologies and pricing.
    

   Provided an offer meets all of the LCR RFO requirements, SCE is technology neutral and will consider the viability and cost-effectiveness of all storage offers.

8. Is there any data that shows the intended duty cycle for energy storage systems, or any additional guidance we can use to prepare anticipated duty cycles (daily, monthly, yearly charge/discharge instructions).
    

   There is not a specific duty cycle that SCE is requiring energy storage providers to meet. Subject to its operating restrictions, a storage unit will be dispatched according to the CAISO markets.

9. Should warranties and reconditioning expenses for batteries be included in the bid to give us the necessary year lifespan?
    

   The useful life of the project in the PPA is blank and negotiated later. Bidders should propose terms (as long as they include the calendar year 2021) and price their offers as they deem appropriate.

10. Given the relatively small footprint storage containers leave, would it be possible to place one or more storage containers on SCE substation property inside or outside the substation fence?
     

    We will not be accepting proposals for projects on SCE substation property in this RFO. If you are able to procure rights to land adjacent to an SCE substation, a project on that land could be eligible.

11. What LEFs will be used in SCE's evaluation of in-front-of-the-meter energy storage offers?
     

    SCE will use the LEFs published as part of the CAISO 2013-14 Transmission Plan. The plan was approved by the CAISO Board on March 20, 2014, and clarified in a letter on April 9, 2014. The materials can be found here.

1. How does the SCE evaluation process evaluate a CHP facility’s ability or inability to provide unrestricted curtailment for 50 hours per Term Year?
    

   SCE's evaluation process does not attribute costs or benefits to curtailment in its NPV analysis. Instead, curtailment hours offered are considered as part of the qualitative assessment.

2. Will SCE consider a proposal from a baseload CHP project that will operate as a Net Scheduled Generating Unit (as defined in the CAISO Tariff)? If so, how will they be evaluated?
    

   Baseload CHP projects that will operate as Net Scheduled Generating Units are eligible to participate in the LCR RFO. SCE's evaluation methodology does not penalize such proposals. Projects can offer as-available capacity, provided they also offer some amount of firm capacity. However, SCE's evaluation methodology only applies RA value to the firm capacity offered.

3. Does the SCE evaluation process consider self-scheduling requirements of baseload CHP? If so, how is such consideration implemented in the evaluation process and does the LCR CHP Pro Forma PPA reflect an obligation to self-schedule?
    

   SCE's evaluation process includes all potential market revenues of an agreement, including any revenues associated with must take energy. How SCE chooses to represent a contracted unit in the market is not pertinent to the agreement, provided SCE will not violate any provisions in the agreement in doing so.

1. For demand side projects where there is not a specific in service date, can there be a ramp up period, since it may take months or years to acquire and then aggregate?
    

   SCE will accept deliveries as early as 2015 for some locations (Johanna, Santiago, and Goleta) and 2018 for the rest. An aggregator can ramp up and provide smaller deliveries then increase over time. The evaluation will take into account the various capacity levels.

2. Can a project submit its own load for demand response separately or is demand response for this RFO only for aggregators, as outlined in the demand response contract?
    

   Subject to the LCR capacity minimums, SCE customers can submit their own load for demand response in the LCR RFO.

3. How would the demand response (DR) in this RFO be dispatched differently based on current value for existing DR programs offered by SCE’s Customer Service organization? Are these going to be compared to existing DR programs?
    

   Dispatch of a DR resource will depend on market conditions and the economics of the agreement. Demand response offers in the LCR RFO will be compared to other bids within this solicitation rather than existing DR programs or existing DR program participation.

1. Does SCE desire or require blackstart capabilities for gas fired facilities?
    

   Blackstart capabilities are not required, but, if offered, it will be qualitatively considered in the evaluation.

1. For Energy Efficiency (EE) bids into the LCR RFO, is SCE requiring EE bidders to submit 1) the whole EE savings that result from the installation of the EE project or 2) the EE savings above code after installation of the EE project? Which standard will be used to determine LCR capacity?
    

   SCE is requesting Energy Efficiency bids to provide (in the "Profile" tabs of the Energy Efficiency Excel Appendices) both EE savings that 1) result from the entire savings that are achieved from the new EE project and 2) the EE savings that can be counted above code and/or standards.

   SCE’s currently plans to evaluate EE compared to codes and/or standards, but may determine the other approach is more appropriate.