Phase I RFP Questions & Answers
Questions from Proponents registered for the Phase I RFP on the Phase I RFP, the Phase I RFP process or related documents and BC Hydro's answers to them will be posted on this page.
The Q&As presented on this page will be numbered chronologically based on the date of posting. Most recent Q&As will be posted first.
You must be registered as a Proponent to submit a question. BC Hydro's answers to Proponent's questions are for general information only, do not constitute legal or other advice, and do not amend, or form part of the Phase I RFP, unless confirmed by Addendum or revised Phase I RFP documents. For further information on the Q&A process, refer to section 10 of the Phase I RFP.
June 5, 2008
* Denotes outstanding Q&As from the May 28, 2008 Proponents Workshop.
*68. When will Proponents be advised that they are not short listed or that their proposals have been rejected?
BC Hydro will determine in the Proposal evaluation, discussion, negotiation and award stage of the RFP when individual Proponents will be notified of the outcome of the RFP in relation to their particular Projects. BC Hydro may decide to notify Proponents only upon completion of the process and award of any EPA(s).
*67. Can loss calculations used in pricing and/or LD calculations be "positive"?
The energy losses for a particular Project represent the incremental physical losses on the BC Hydro system associated with taking delivery of energy from that Project. Based on results of loss studies conducted for previous calls, the net impact of adding new generation Projects has generally been to increase the overall losses on the system even after consideration of local line loss savings, if any.
*66. Please clarify the impact of time of delivery under EPAs with seasonally Firm Energy profiles in terms of payment and LD calculations.
For seasonally firm Projects, energy payments will be adjusted by the time of delivery factor applicable at the time of energy delivery. However, a single seasonal time of delivery factor will be used for LD calculations. The seasonal time of delivery factor is the time-weighted average of the time of delivery factors applicable to that season.
*65. Can Proponents rely on the calculation model in determining the impacts of their price and other commercial terms?
BC Hydro provides no guarantee with respect to the accuracy of the calculation model. Proponents should independently confirm the accuracy of all calculations prior to Proposal submission.
*64. Will BC Hydro consider a "firmness period" between hourly and seasonal, and if so, what impact, if any, will that have on the evaluation of the Proposal?
Yes. BC Hydro may consider this type of variation as a non-price factor in its evaluation process.
*63. Will there be a "seasonal credit table" published?
A "seasonal credit table" is not applicable in the evaluation of Proposals, and will not be published. The "hourly credit table" is provided to give recognition to the higher value BC Hydro places on hourly Firm Energy.
*62. Will BC Hydro consider a flow through of fuel costs or a variation to the prescribed CPI-referenced escalation rate, such as an alternate index (e.g., a fuel cost-based index)?
BC Hydro will consider as a Value Variation a flow through of fuel costs or a variation to the prescribed CPI-referenced escalation rate.
*61. Will BC Hydro consider a variation eliminating the $5.00/MWh minimum LD?
As noted in item 3 of Addendum 5, BC Hydro does not intend to consider variations that reduce, condition or otherwise limit the liquidated damages payable in accordance with the Specimen EPA.
*60. How will Authorized Planned Outages be treated in allocating delivered Eligible Energy under EPAs with seasonally Firm Energy profiles?
Delivered Eligible Energy for seasonally firm Projects will be allocated into Firm and Non-Firm Energy based on the Firm Energy commitment set out in the seasonally Firm Energy profile. In the event of an Authorized Planned Outage, the Firm Energy commitment for the season will be pro-rated based on the number of days that are not excused from the Authorized Planned Outage.
*59. In applying "Option B" for Non-Firm Energy pricing, please clarify how "On-Peak" and "Off-Peak" prices are "averaged" – is this a "transaction" average or a "simple" average of reported prices.
The Non-Firm Energy pricing will be based on a simple average of the applicable mid-C prices as reported by Dow Jones.
*58. In the case of a Customer Project involving energy to be contracted under an EPA awarded in the Call, but physically displacing mill load, where is the "POI" for contractual purposes?
The POI means the point at which the Seller's Plant interconnects with the Transmission System as defined in the Interconnection Agreement between the Proponent and BCTC. In the case of an IPP Project, the POI also represents the point of delivery ("POD") for the energy being sold to BC Hydro. In the case of a Customer Project, the POD would normally be at a point where the Customer's plant touches the BC Hydro system, e.g. on the high side of the step-down transformer. If the POD is not the same as the POI then the meter reading at the generator will need to be adjusted to reflect delivery of energy to the POD rather than to the POI.
*57. Is all generation up to the GBL profile excluded from deliveries under an EPA, or is there any tolerance or margin in that regard?
All generation up to the GBL profile is excluded from deliveries under the EPA, subject to the 5% allowance for "Non-Incremental Energy" described in item 3 of Addendum 4.
*56. Is the Auxiliary Annual Fuel Baseline for a Customer Project to reflect only Auxiliary Fuel used in power generation (e.g., power and recovery boilers) or should it reflect all such fuel utilized in mill operations?
The Auxiliary Fuel Annual Baseline should reflect such fuel that is in any way associated with power generation at the facility. Proponents should include gas/alternate fuel volumes in their baseline case plan and provide at least one year of fuel consumption (used in their power and recovery boilers). This information should be further supported by accounting records.
*55. Will BC Hydro consider a variation that would permit a Seller to deliver as Non-Firm Energy output in excess of Plant Capacity, subject to a defined tolerance (e.g., 10%)? If not, what is the treatment under the EPA of such excess output?
Yes, provided that the energy deliveries do not exceed the maximum capacity set out in the interconnection agreement with either BCTC or BC Hydro. However, Proponents should note that the benefit and burden to BC Hydro of variations may be considered in Proposal evaluation.
*54. Will BC Hydro consider variations on Customer Projects which entitle the Seller to withhold Non-Firm Energy and apply that energy to load displacement?
BC Hydro will consider variations on Customer Projects which entitle the Seller to withhold Non-Firm Energy for the purpose of load displacement, provided a satisfactory energy allocation methodology can be developed to separate out the Non-Firm Energy that would be used for load displacement.
*53. Will BC Hydro consider variations to force majeure provisions associated with fuel issues?
Yes. However, Proponents should note that the benefit and burden to BC Hydro of variations may be considered in Proposal evaluation.
*52. Will it be necessary to obtain a new interconnection study in order to participate in Phase II, or can the Phase I study be used? Will the cost of a second study be the same as the first study if a new study is required?
A new study will be required for participation in Phase II. However, the cost of performing a study for a Phase II Project for which a Phase I study has already been prepared may be less than the cost of preparing the original Phase I study, assuming the underlying data and assumptions remain unchanged.
*51. Will Proponents / Projects that are not awarded EPAs in Phase I of the Call be eligible to participate in Phase II?
At this time, BC Hydro cannot confirm the eligibility criteria for Phase II of the Bioenergy Call. However, we do not anticipate that the eligibility criteria will include any consideration of whether or not a Proponent participated in Phase I.
*50. If a Project meets the fuel eligibility requirements of the Call, does the output automatically qualify as "Clean or Renewable Electricity" under the government guidelines?
Yes. Note that unless a Proponent intends to meet the "clean" eligibility requirement by way of EcoLogo M Certification (in which case the Proponent should provide a comfort letter from TerraChoice confirming the intention to obtain certification), the Proponent need not provide any documents with respect to the "clean" eligibility requirement, and BC Hydro will determine whether the Project meets the "clean" eligibility requirement based on the Fuel Plan and other data filed with the Proponent's Proposal.
*49. Will BC Hydro consider variations relative to the treatment of Environmental Attributes?
Yes. Proponents should review item 3 of Addendum 5 and item 5 of Addendum 9 in considering the scope and format of proposed variations.
48. Please confirm that your comments regarding disclosure, etc. do not apply to on-site energy managers who are partially paid by BC Hydro.
If the energy manager is not an employee of BC Hydro and there is only a payment from BC Hydro to the Proponent to cover a portion of their salary, no disclosure is required. If the employee meets any other requirement regarding disclosure (for example, they were employed by BC Hydro within the last two years), then they would need to be included in the Ownership/Personnel/Consultant Disclosure.
47. Please confirm that your latest releases have changed the situation such that there is no longer a need for an exhibit in the Appendix 4 (Project Description Requirements) indicating BC Hydro approval of the Auxiliary Fuel Baseline, since the Auxiliary Fuel Baseline document will be submitted at the same time as the Project Description.
The Auxiliary Fuel Baseline will be submitted at the same time as the Proposal and does not require BC Hydro approval in advance of Proposal submission.
46. Section 2.10 of Appendix 4 (Project Description Requirements) states that if the "…Project requires rezoning, the Proposal should establish that a rezoning bylaw has received at least first reading by the relevant local government."
In our case the land is in the ALR and owned by another party. There is a requirement to submit an application for removal from ALR and other significant financial and contractual commitments before an application for rezoning is submitted. It would seem unreasonable to submit an application for rezoning and expect it to be moved to first reading in advance of a Proponent being placed on a short list or finalizing an EPA with BC Hydro. Can this condition like others be met by demonstrating that the Proponent has set a pathway for completion of zoning and other similar matters well in advance of a COD or completion of an EPA?
At this time, BC Hydro cannot confirm that a given approach will comply with the instructions set out in Appendix 4 (Project Description Requirements). However, note that the instruction to section 2.10 of Appendix 4 provides that where a Project requires rezoning, the Proposal should establish that a rezoning by-law has received at least first reading by the relevant local government. Project Descriptions that depart from this provision should include a supporting explanation. Note that criteria that BC Hydro will use in evaluating Proposals include the extent of a Proponent's or a Proposal's compliance with the RFP terms (which include the Project Description Requirements).
45. Please clarify that in the event that a contract is not renewed for a second term, the Performance Security is then returned to the Proponent.
The Specimen EPA contemplates that upon the conclusion of the initial term, and assuming that the Performance Security has not already been returned to the Seller, the Buyer will return or release the Performance Security to the Seller 30 Business Days following the discharge of all obligations and liabilities of the Seller to the Buyer under the EPA (see subsection 14.2(a)(ii) of the EPA). Note that the Specimen EPA does not contemplate a renewal of the EPA for a second term.
44. The common shares or similar interests of the Proponent are not listed on a stock exchange. The Proponent is a limited partnership with general partner. The Proponent is owned by individuals and/or one or more corporations. The RFP requests information relating to public companies and individuals having equity that equals or exceeds 10%. Is there a requirement under subsection 1.2(b) of Appendix 4 (Project Description Requirements) to disclose information relating to non-public corporate entities that own a portion of the Proponent that equals or exceeds 10%?
Yes. Information disclosure is required for non-public corporate entities that own a portion of the Proponent that equals or exceeds 10%.
43. Do you intend to have a credit table for LD calculations for seasonal energy?
No. The credit table contained in section 13.3 of the Specimen EPA applies to the LD calculations for hourly firm energy only.
42. Please confirm that the BC Clean Electricity Guidelines, last revised September 15, 2005, is the most recent version of this document and thus the version that is to be utilized as part of the Phase I RFP.
The referenced BC Clean Electricity Guidelines are not being used for this RFP.
The most recently published draft of the guidelines can be found on the website of the B.C. Ministry of Energy Mines and Petroleum Resources as a Draft for Discussion of British Columbia's Clean or Renewable Electricity Guidelines dated December 12, 2007.
Note that the Draft Guidelines are no longer available at the website addresses listed in section 14 of the RFP and item 13 of Addendum 8.
As set out in section 14 of the RFP (as modified by item 3 of Addendum 2 and item 13 of Addendum 8), the entire output from a Project must qualify as "clean or renewable energy" and in accordance with the guidelines. Regarding the manner in which BC Hydro intends to address the guidelines in any EPA that may be awarded, see the Specimen EPA, and in particular subsections 4.1(a) and 6.2(a) and the definitions of "Clean or Renewable Electricity" and "Project Standards".
May 30, 2008
41. Are you able to give us any guidance at all with respect to your expectations surrounding environmental requirements? It is problematic, at best, to deal with statements about the possible need for EcoLogo certification and clean energy requirements as defined at the time of EPA execution. Can you give us any idea as to when this will be defined? In the event that BC Hydro requires us to obtain EcoLogo certification at BC Hydro's cost, is BC Hydro also willing to pay the annual licence fee?
EcoLogo certification is not required if a Proponent's Project meets the requirements for clean or renewable electricity set out in the draft guidelines issued by the B.C. Ministry of Energy, Mines and Petroleum Resources. However, if the Project requires EcoLogo certification before it is considered clean or renewable under the draft guidelines, then the cost of certification rests with the Proponent.
In the event that the Proponent does not require EcoLogo certification to be deemed clean or renewable under the draft guidelines, then BC Hydro would pay for the cost of the certification as well as the associated annual licence fee, if BC Hydro decides in the future that EcoLogo certification is of value to the corporation.
40. When is the Auxiliary Fuel Base Line going to be reviewed?
A Proponent's Auxiliary Fuel Annual Baseline will be reviewed following the Proposal submission, and at the same time as the Proponent's Fuel Plan. See item 7 of Addendum 8.
May 15, 2008
39. Please help clarify BC Hydro's responsibility with respect to the Interconnection Study Fees. Our understanding is that the final release by BCTC before signature with BCTC will be the combined study (impact study and facilities study). This will occur after EPA signing and will be the next step after EPA signing. The cost of this combined study will be paid by us. The deliverables from the facilities study are two-fold: direct assignments and Network Upgrades. As per the information session held in Kamloops, BC Hydro is prepared to pay for the cost of the Network Upgrades, which we infer means that they will pay for the cost of the direct assignments as well. We will be required to post security with BC Hydro at the time of final interconnection agreement signing with BCTC to cover 1.5 times the estimated interconnection costs, and these costs will be based on the estimates from the Feasibility Interconnection Study which will be released on or about June 20.
With respect to study fees, the Seller is responsible for all fees related to the interconnection studies for their Project, except in certain cases where the BCUC rejects all or part of the EPA in which case BC Hydro will be responsible for the study fees incurred after the signing of the EPA. Note that after EPA award, the interconnection process (for transmission-connected projects) reverts back to BCTC's Standard Generator Interconnection Procedures, and the Seller should carefully review those procedures on the BCTC website with regard to the cost and timing of the interconnection studies after EPA award, as well as to the definitions of the various terms used therein.
Under the terms of the EPA, the Seller is required to sign the Combined Study Agreement on the earlier of November 3, 2008 and 60 days after the EPA is signed. Failure to do so could result in the termination of the EPA. Also, prior to signing the Standard Generator Interconnection Agreement (SGIA) with BCTC, the Seller will be required to post an Interconnection Security with BC Hydro (the Buyer) in an amount equivalent to 100% (not 150%) of the cost estimate for Network Upgrades provided in the facilities study (the second study of the Combined Study Agreement). Failure to post the correct amount of security could result in termination of the EPA. Note that the facilities study will provide one cost estimate for Transmission Provider Interconnection Facilities (on the Seller's side of the Point of Interconnection) and one cost estimate for Network Upgrades (on the Buyer's side of the Point of Interconnection), and that the Seller will be responsible for the former costs and BC Hydro will be responsible for the latter costs. Also note that the recently released Specimen EPA allows for a price adjustment to reflect the Seller's cost of the Interconnection Security which will not be known at the time of Proposal submission.
38. In section 2.6 of the RFP Appendix 4 – Project Description Requirements, Proponents are required to " provide copies of all existing electricity purchase contracts between the Proponent and any third party (including BC Hydro)".
i) Does BC Hydro want to see physical copies of all Electricity Supply Agreements between us and BC Hydro included in our Proposal?
No. However, note that all electricity purchase contracts and load displacement agreements (if any) between the Proponent and BC Hydro must be disclosed.
ii) What is the intent of this section?
The intent of this section is to confirm that the energy that the Proponent is proposing to sell to BC Hydro is not otherwise committed to another third party.
37. Please provide some guidance towards the treatment of Planned Outages. In Appendix 3 – Schedule A – Project Price Form, there is an indication that we are to assume no Planned Outages (as defined in the Specimen EPA) for both the GBL profile and our Firm Energy profile. How then are we to handle these events, and are we expected to reduce all of our numbers by some fraction in order to reconcile the difference between what we are able to make, most days, and the downtime caused by outages? If our facility elected to make operational changes such that our annual outage would always occur during the freshet period indicated in this Call, would this effectively allow us to reduce our % energy supplied under the freshet?
Firm Energy delivery shortfalls due to Authorized Planned Outages are excused from liquidated damages, hence such outages should not be taken into account when setting the Firm Energy profile (however, Proponents should allow for Planned Outages when modelling project revenues). Further details on the treatment of Planned Outages can be found in the Specimen EPA.
36. In the EPA Term Sheet, there is a discussion on the plant capacity. Will the definition of this be as given in the interconnection documentation to BCTC or is there another different reference coming in the EPA Term Sheet? In our particular case, we will be looking to operate our equipment at less than its nameplate capacity in order to maximise production. As a result, we will be in the position where we will not be able to ever meet our plant capacity (as defined in the interconnection submission). Due to these circumstances, are we right in assuming that we would not likely ever be bound by plant capacity limits?
For purposes of the EPA, the definition of Plant Capacity will be tied to the nameplate capacity of the generator(s) that make up the Seller's Plant. Refer to these definitions in the Specimen EPA. Note that the Specimen EPA deals with the delivery and purchase obligations relating to energy, not capacity. More specifically, it may not be necessary to operate at full Plant Capacity to meet a specific Firm Energy delivery obligation, which is set by the Proponent in the Commercial Proposal.
May 7, 2008
35. Regarding subsection 3.2.3(a) of the RFP Appendix 4 (Project Description Requirements), if we are able to provide funding for the Performance Security requirement directly, what should our commitment or comfort letter include?
The content of the letter should reference (1) the amount of the Performance Security that the institution is willing to provide, and (2) the Bioenergy Call Phase I RFP. A letter with these two changes from a financial institution with the required credit rating should be sufficient for purposes of subsection 3.2.3(a) of the Project Description.
34. Please clarify BC Hydro's right for turn-down as it applies to incremental Customer production. We take this to mean that BC Hydro has the right to ask us to disconnect from our interconnection point, island ourselves and nothing else. Is this correct?
BC Hydro's turn-down right will be subject to the terms and conditions for such a right submitted by the Proponent in the Commercial Proposal, and as further amended by any subsequent discussions/negotiations initiated by BC Hydro. Accordingly, any BC Hydro turn-down right is likely to be Project specific and it would be premature at this time to speculate on specific terms and conditions.
33. Is BC Hydro required to purchase all of our non-firm energy (subject to freshet and plant capacity) requirements?
BC Hydro will be obligated to buy all non-firm energy that is Eligible Energy as defined in the Specimen EPA.
32. Regarding section 2.6 of the RFP Appendix 4 (Project Description Requirements), are you asking for copies of existing Proponent EPAs to sell generated power to any third party (including BC Hydro) within the province? Or, do you want copies of any third party/BC Hydro contracts to buy power (as a Customer), i.e. the Proponent's office building in B.C.? Your terminology of "electricity purchase contracts" is somewhat confusing. Does your question (whichever way you answer) relate only to contracts within the province of B.C.?
Proponents should provide copies of all existing electricity purchase contracts between the Proponent and any third party (including BC Hydro) pursuant to which the Proponent is selling energy that is generated within British Columbia.
31. What is the earliest acceptable or desirable COD?
BC Hydro does not have an earliest acceptable or desirable COD. BC Hydro is prepared to purchase energy from a Proponent once the awarded EPA has received regulatory approval and the requirements for COD stipulated in the EPA are met.
30. Can you provide indicative discount of daily firm and monthly firm energy vs. hourly firm energy?
Daily firm energy is not a product that BC Hydro is planning to buy. As indicated at the March 26, 2008 Proponent information session, the magnitude of the hourly firm credit for hourly firm energy relative to monthly firm energy depends upon the shape of the on-peak hourly firm energy being contracted for. More specifically, the credit was approximately $3/MWh for a project with a 'flat' profile of contracted on-peak hourly firm energy. Based on an updated analysis conducted by BC Hydro, the credit for a project with a 'flat' profile of contracted on-peak hourly firm energy is expected to increase to about $4/MWh.
29. Can you provide indicative information on the impact of Project location?
It is not possible to provide detailed information on the impact of Project location as such impacts are both Project specific and location specific. However, the general trend tends to be that the further away a Project is located from the Lower Mainland/Vancouver Island region, the greater the magnitude of the impact.
28. Is it possible to get a copy of the calculations that you went through during the information session on March 26, 2008 (levelized firm energy price, liquidated damages, etc.)?
A copy of the sample calculations presented at the March 26, 2008 Proponent information session is now posted on the Workshops and Presentations page.
27. Section 2.3 of the RFP Appendix 4 (Project Description Requirements) requires the Proponent to identify three existing generation plants to prove the technology is readily available in commercial markets and in commercial use. Will BC Hydro accept a plant that has been in commercial use for at least three years, but is no longer in service or do all three representative plants need to be in-service as of the Proposal submission date?
All three representative plants should be in-service as of the Proposal submission date.
26. Please advise on the treatment of additional biomass sources not mentioned in the RFP Appendix 5 (Fuel Plan Requirements). These sources would include woody material diverted from landfills such as tree trimmings, segregated construction debris, orchard wastes, and mountain pine beetle debris from urban areas.
For the purposes of the RFP, Forest-based Biomass does not include woody material diverted from landfills, segregated construction debris, orchard wastes or mountain pine beetle debris from urban areas. If any such fuel sources are included in a Proposal, they should be characterized as Auxiliary Fuel.
April 23, 2008
25. Would it be acceptable for the Proponent to submit six hard copies (and one soft copy) of a Proposal that combines the Project Description, Fuel Plan and redlined EPA in one single binder or does BC Hydro want each individual section in a separate binder? Further, should the Confidentiality Agreements and Proposal Letter be submitted in separate envelopes?
Yes, the Proponent may combine the Project Description, Fuel Plan, and redlined Specimen EPA in one single binder package. The Confidentiality Agreement and Proposal Letter should be submitted in separate envelopes from the binder packages.
24. The fourth bullet in Section 2 of RFP Appendix #3 Proposal Letter requests that the Proponent attach a copy of the Feasibility Interconnection Study agreement or Preliminary Interconnection Study agreement and related study. The same requirement is outlined in the fifth bullet in section 16 of the Request for Proposals. Section 2.5 of the Project Description Requirements also requires the Proponent to attach a copy of the Feasibility Interconnection Study agreement or Preliminary Interconnection Study agreement and related study.
Please confirm that the Proponent need only attach one copy of the agreements/study as an Exhibit to the Project Description Requirements to meet the requirements of the RFP. For clarity, the Proponent does not need to provide an extra copy outside of the Project Description Requirements.
Proponents only need to submit one copy of the interconnection agreement for each Project, as an Exhibit to the Project Description, which forms part of the Proposal as described in section 2 of the Proposal Letter.
23. At the March 26, 2008 Proponent information session, it was stated that BC Hydro would consider Proposals that delivered firm energy on a monthly basis rather than an hourly basis, if that feature was considered necessary because of the nature of the generation (i.e. qualified as what is now defined as an “Essential Variation” to the EPA), but that such Proposals would be discounted or levelized in a manner that allowed them to be compared on an equal basis with projects that deliver hourly firm energy. Please confirm that BC Hydro will continue to consider variations to the Specimen EPA that depart from the requirement that firm energy be hourly firm energy.
BC Hydro confirms that it will consider variations to the Specimen EPA that provide for the delivery of monthly firm energy as an alternative to hourly firm energy. Pricing structure terms for which BC Hydro does not intend to consider variations include the pre- and post-COD escalation percentages, the use of the 3x12 time of delivery table, the adjustment for transmission losses from plant gate to the Lower Mainland, and the two non-firm energy pricing options presented in the EPA Term Sheet.
22. Referring to the March 26, 2008 Proponent information session presentation slides:
a) Please show the calculations that result in a $2.9/MWh adjustment to Levelized Hourly Firm Energy Price for a flat on-peak profile on Slide 52.
b) On Slide 52 there is a table showing the relative value of on-peak versus off-peak, by month. Is there also a relative value for super-peak?
a) Using a recent estimate of BC Hydro’s reference value of capacity of $25,000 per MW per year, the $2.9/MWh hourly firm adjustment for a flat profile of on-peak hourly firm energy is obtained by dividing $25,000 per MW per year by 8,760 hours per year.
b) At this point in time, BC Hydro does not recognize any additional value associated with super-peak (i.e. 4:00 p.m. to 8:00 p.m.) non-dispatchable capacity relative to peak (i.e. 6:00 a.m. to 4:00 p.m., 8:00 p.m. to 10:00 p.m.) non-dispatchable capacity. Accordingly, the hourly firm adjustment will be based on a calculated profile of on-peak (i.e. 6:00 a.m. to 10:00 p.m.) hourly firm energy based on the time-weighted average of the peak and super-peak profiles of hourly firm energy submitted in Proposals offering hourly firm energy. Note that BC Hydro’s reference value of capacity of $25,000/MW/year, and the capacity weighting factors referenced in slide 52, are subject to change.
21. At the March 26, 2008 Proponent information session, it was stated that the 3x12 Firm Energy Price adjustment table was revenue neutral. Our own analysis suggests that the table is revenue neutral only if statutory holidays are not included, and if you assume nine statutory holidays in a year (which is consistent with the 1823 Tariff) the weighted hours add up to less than 8,760, which means that the payments made for energy delivered will be less than what is intended. Could you please acknowledge whether this analysis is correct?
The modelling used to generate the 3x12 table deliberately excluded statutory holidays due to the difficulty associated with determining the dates, over the next 20 years, for those holidays whose dates change from year to year, such as Good Friday. This practise of excluding statutory holidays is consistent with previous derivations of the table used in past calls. Given that the holidays are distributed somewhat evenly throughout the year, we expect the relative impact to be insignificant (your own calculations show the impact to be less than 0.5%). Hence, in BC Hydro’s view it is still correct to say that the 3x12 table is, for all intents and purposes, revenue neutral for a flat profile of energy. To the extent that Proponents believe the 3x12 table is not revenue neutral, such Proponents are still able to reflect their view of the impact into their pricing for the firm energy.
20. Please confirm that the GJs of Biomass on Schedule B of the fuel plan are to be gross GJs.
Schedule B summarizes the energy resulting from auxiliary fuel versus Forest-based Biomass. The units in Schedule B should be in gigajoules. In the case of biomass fuels, it should be the gross energy value of the biomass material entering the generator which corresponds to the electrical energy produced. The conversion factors provided in the fuel plan should align from Schedule A to Schedule B so the volume in (green metric tonnes) matches the energy produced (GJs and MWh).
19. Please confirm that the metric tonnes on Schedule A of the fuel plan are to be in “Green – as received” tonnes, not oven dry tones, as was stated at the March 26, 2008 Proponent information session. Please note that on the coast all barge delivered biomass is measured volumetrically and that we then use conversion factors to get it to green tonnes.
We are confirming that green (wet) metric tonnes is the element applicable for Schedule A.
18. Is there any kind of assurance that BCUC will not disqualify a Proponent at a later point after significant sums have been spent on studies and engineering?
The Specimen EPA will not contain any specific assurances or guarantees regarding the actions of the BCUC. However, the EPA Term Sheet, under the heading "Regulatory Condition", sets out the key terms that will be included in the Specimen EPA concerning the rights and obligations of the parties associated with the section 71 regulatory review process.
17. When will each proponent be assigned a contact within BC Hydro to start discussions before the actual negotiations?
BC Hydro does not intend to have prior discussions with individual Proponents with which BC Hydro elects to enter into negotiations. Proponents with which BC Hydro intends to negotiate will be provided with BC Hydro contact information shortly before the commencement of negotiations.
16. Will there be any evaluation differences between Distribution versus Transmission connected projects at the same location?
The same evaluation methodology is used for both Distribution-connected and Transmission-connected Projects. However, the interconnection cost estimate provided in the Preliminary Interconnection Study will include a distribution component. Also, the energy loss calculation will include losses for the distribution feeder.
April 4, 2008
15. Please confirm which statutory holidays are treated as “Non-Peak” hours.
Statutory holidays that are treated as “Non-Peak” hours are:
New Year’s Day
Good Friday
Victoria Day
Canada Day
B.C. Day
Labour Day
Thanksgiving Day
Remembrance Day
Christmas Day
14. We understand that where a Proponent has submitted a Registration Form for a Project, an Affiliate of the Proponent (which includes a wholly owned subsidiary of the Proponent) may submit the Proposal Letter in respect of that Project. Where an Affiliate of the Proponent will submit the Proposal Letter, please confirm that the same Affiliate may also file the application to BCTC for a Feasibility Interconnection Study or to BC Hydro for a Preliminary Interconnection Study, as the case may be, and/or execute and file the associated interconnection study agreements.
A Proponent Affiliate that submits a Proposal for a Project described in the Proponent's Registration Form may (a) sign and file the corresponding Feasibility Interconnection Study agreement with BCTC or Preliminary Interconnection Study agreement with BC Hydro (as applicable), and (b) submit the corresponding interconnection study to BC Hydro.
13. The date November 1, 2012 is noted in the draft EPA Term Sheet as the last date for COD for Phase I. Is this valid?
Yes, the latest date that a Proponent can select for guaranteed COD is November 1, 2012.
12. With regard to Appendix 5 to the RFP (Fuel Plan Requirements), the pricing of a Proponent’s biomass contract with an independent supplier is considered confidential. Please explain why BC Hydro requires this information?
BC Hydro requires this information to assess the potential impact of new bioenergy Projects on existing users of Forest-based Biomass.
11. Please explain the meaning of “for the purpose of meeting technical requirements of normal operations” in Addendum 2?
“For the purpose of meeting technical requirements of normal operations” means that if the technical/engineering design of a generation facility requires that a certain minimum firing temperature be maintained in the combustion process, then Auxiliary Fuel would be allowed to the extent necessary to achieve and maintain the required minimum firing temperature.
10. With regard to Force Majeure, please explain why BC Hydro will backstop fibre supply for IPPs in Phase II of the Bioenergy Call while, at the same time, providing no such similar support/relief to Phase I Project Proponents?
As communicated at the February 20, 2008 session in Kamloops, Phase I of the Bioenergy Call is focusing on Projects that are viable now and do not require new tenure from the Ministry of Forests and Range (MoFR) to proceed. The expectation is that Phase I Proponents will already have access to necessary fuel supply to meet the generation requirements during the applicable EPA term, either from existing forest tenures or contractual agreements with third parties that have access to the necessary fibre supply. Phase II of the Bioenergy Call is expected to focus on projects that are not presently viable and require elements that will be informed by a biomass inventory/forest tenure analysis that MoFR is completing. In its presentation in Kamloops on February 20, 2008, the B.C. Forest Service representative simply acknowledged that Phase II proponents may need assurances of the potential to obtain new forest tenures and that the MoFR may consider legislative changes to address this situation. In both Phase I and, it is expected, Phase II, successful proponents will themselves have responsibility for securing necessary Forest-based Biomass over the applicable EPA term.
9. A Customer will not have had 12 months operating experience before having to decide whether or not the annual firm energy quantity should be adjusted. Is there any reason why that right should not be extended to the second anniversary of the COD?
The firm energy adjustment described in the EPA Term Sheet is provided to give a Seller the opportunity to address any variation between a facility's mechanical design performance and actual operating performance. By the first anniversary of COD, a Seller will have had sufficient time to identify such variation (if any). Contrary to what was communicated at the March 26, 2008 Proponent information session in Vancouver, BC Hydro will not be making any revision to this provision in the EPA Term Sheet. However, as stated in the RFP, Proponents are free to propose variations to BC Hydro's preferred terms and conditions.
8. Is it correct to assume that annual firm energy can be adjusted by “up to” +/- 10%?
As contemplated in the EPA Term Sheet, the annual firm energy quantity can be adjusted by up to plus or minus 10%.
7. Please confirm that all submitted information under the Phase I RFP proposal process and subsequent negotiations will be done on a confidential basis.
BC Hydro's confidentiality obligations in respect of information provided by Proponents in relation to the RFP are set out in sections 22.8 and 22.11 of the RFP.
6. At the February 20, 2008 information session in Kamloops you stated that the entire output must qualify as “Clean” energy in order to be eligible for the Phase I RFP. Our project will supplement the incremental biomass fuel with a small amount of natural gas to make the incremental volume of electricity. Does this mean it will not be eligible?
Addendum 2 to the RFP modified the eligibility requirements to address this issue. Please see the excerpt below:
3. Fuel Type
The RFP invites proposals for the supply of electrical energy generated from Forest-based Biomass. BC Hydro recognizes that Forest-based Biomass energy (steam and/or electricity) generation facilities may require the use of non-Forest-based Biomass fuel, including fossil fuel, (“Auxiliary Fuel”) for start-up purposes, and to achieve optimal performance. Accordingly, BC Hydro will consider Proposals for Projects requiring Auxiliary Fuel, subject to certain limitations and conditions, as summarized below:
- All Projects may utilize Auxiliary Fuel for start-up purposes,
- IPP Projects (see RFP, page 7, under “Project Type”) may utilize Auxiliary Fuel for the purpose of meeting the technical requirements of normal operations, but in any event not exceeding 3% of total annual fuel requirements (excluding Auxiliary fuel used for start-up), determined by energy measurement (e.g., GJs),
March 19, 2008
5. Is it true that only one registration fee is payable per Proponent, regardless of the number of Projects for which Proposals are submitted?
Yes, there is only one registration fee per Proponent.
4. A project is not known to be certain of being interconnected to the BC Hydro Distribution System or the BCTC Transmission System. Thus, on recommendation of the BC Hydro and BCTC, an application is being submitted to both. Is one Registration Form acceptable to qualify for that Project regardless of which interconnection is appropriate? Presuming that only one Registration Form is required for that Project, what selection should be made for the “Interconnection” field in the Preliminary Project Information section of the Registration Form?
Only one Registration Form is required regardless of which form of interconnection will ultimately be selected. If there is uncertainty as to whether the Project will be Transmission System-connected or Distribution System-connected, we suggest that you (i) leave the "Interconnection" field <blank> on the Registration Form, and (ii) as an attachment to your Registration Form, provide a brief description of the measures that are being taken to determine the appropriate form of interconnection.
3. If an existing biomass boiler/turbine was operated to support both a sawmill and a paper mill (behind the fence, no power ever generated to the Hydro grid) and is now going to be connected to the grid for exporting power, is that considered 1) greenfield or 2) new customer generation? Both the sawmill and paper mill are closed indefinitely and the cogeneration facility will not be owned by the sawmill/paper company going forward.
Assuming the cogeneration facility is planning to export energy to the grid using the existing onsite interconnection facilities and assuming that the cogeneration facility has control (e.g. ownership) of such interconnection facilities, the cogeneration facility would likely be considered a "greenfield" project for as long as the cogeneration facility can deliver energy to the proposed point of interconnection as evidenced by a valid interconnection study from the British Columbia Transmission Corporation (BCTC) (i.e. assuming the point of interconnection is on the Transmission System), whether or not the sawmill and/or the paper mill were to remain closed indefinitely or were to reopen at a later date.
2. Have any of the companies in the field proposed using grass clippings as a fuel ?
Projects must consume Forest-based Biomass in order to be eligible to participate in the Phase I RFP. Grass clippings are not considered to be Forest-based Biomass.
1. We are in the process of registering multiple projects in the Phase I RFP. Each project will ultimately be owned in a subsidiary of the parent company. Please confirm that we can provide multiple registration forms and one registration fee in the name of the parent company, then each individual project company is also considered “registered”. For clarity, we wish to confirm that the registrations are transferable to affiliates.
If a single Proponent is proposing multiple Projects, the Proponent should submit a separate Registration Form for each proposed Project. However, only one registration fee is payable per Proponent, regardless of the number of Projects for which Proposals are submitted. Where a Proponent has submitted a Registration Form for a Project, an Affiliate of the Proponent (which includes a wholly owned subsidiary of the Proponent) may submit the Proposal Letter in respect of that Project.