20100115PacifiCorp Revised Response to NIPPC Motion.pdf

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Janua 14,2010
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201 South Main, Suite 2300
Salt Lake City, Utah 84111
VI ELECTRONIC FILING
AN OVERNIGHT DELIVERY
Jean D. Jewell
Commssion Secreta
Idaho Public Utilties Commssion
472 W. Washigton
Boise,ID 83702
RE: IPUC Case No. GNR-E-08-03
Dear Ms. Jewell,
On November 26, 2008, the Nortwest and Intermounta Power Producers Coalition
("NIPPC") fied a petition with the Idao Public Utilties Commssion ("Commssion")
requesting that the Commssion open a generic investigation into the desirabilty of initiating
competitive bidding gudelines for procurement of supply-side resources by the reguated
utilties under its authority.
On December 22, 2009, NIPPC filed a motion with the Commssion requesting a
procedur schedule in the above referenced matter and tht ths docket be amended to elimate
its generic statu and limit the issues to be explored to only Idaho Power. NIPC recogned that
the other two relevant electrc utilties operating in Idao aleady comply with competitive
procurment rues in the other states in which they operate. Rocky Mountan Power does not
object to NIPPC's motion.
PacifiCorp dba Rocky Mounta Power has extenive experience with competitive
procurement gudelines, rules or laws in the states of Oregon, Washigton and Uta. Rocky
Mounta Power's generation and trmission resources are system allocated therefore it is
subject to each of the procurment rues, laws, and gudelines of these thee jursdictions,
(reference copies attched). Ths unque experience has caused the company to be very
concerned about multiple states with conficting provisions. The company is also concerned
about provisions that apply to the acquisition of renewable energy since speed and agility are
requied to be able to successfuly paricipate in the renewable energy market, and protracted
regulatory processes have proven to be incompatible with customer's interests. Given the
company's experience, we respectfly request the opportty to shae that experience and the
company's concern with the Commssion in whatever maner the Commssion deems
appropriate.
Rocky Mountain Power agees with NIPPC and Avista that it is not necessar for the
Idaho Commssion to develop competitive procurement rules for utilties tht already comply
with competitive bidding rules in other states. The Company is providing copies of the
procurement rues from Oregon, Washington and Utah for the Commssion's reference.
Idaho Public Utilities Commission
Janua 14,2010
Page 2
Rocky Mountan Power supports NIPPC's request to naow the proceeding to apply only
to Idao Power. If the Commssion grants NIPC's request Rocky Mounta Power respectfuly
requests that the Commssion expressly state in its order that any gudelines or rues developed
or promulgated in ths proceedig apply only to Idao Power.
Very try yours,
ÛjlJ i ~(Ir;J~ I
Vice President, Regulation
Cc: Scott Woodbur
Bar Kline
Michael G. Andrea
Peter Richadson
We'stlaw.
WA ADC 480-107-015
WAC 480-107-015
Page 1
CWAC 480-107-015
Wash. Adm. Code 480-107-015
WASHIGTON ADMISTRATIV CODE
TITLE 480. UTITIES AN TRASPORTATION COMMSSION
CHATER 480-107. ELECTRC COMP ANS-PURCHASES OF ELECTRICITY FROM QUALIFYIG F ACIL-
ITIES AND INEPENDENT POWER PRODUCERS AN PURCHASES OF ELECTRCAL SAVINGS FROM
CONSERVATION SUPPLIERS
Curent with amndmnts aded thgh November 4, 2009.
480-107-015. The solicitation process.
(1) Any owner of a generatig failty, developer of a potential generating facilty, marketing entity, or provider of
energy savigs may paricipate in the RFP process. Bidders may propose a varet of energy resoures includig:
Electrcal savings associated with conservation; electrcity from qualifying facilties; electrcity from independent
power producers; and, at the utility's election, electrcity from utilty subsidiares, and other electc utilities, whether
or not such electrcity includes ownership of proper. Qulifying facilty producer with a generation capacity of
one megawatt or less may choose to paricipate in the utilities' stadad taffs without filing a bid.
(2) A utilty may parcipate in the biddig process as a power supplier, or may allow a subsidiar or affiate to par-
ticipate in the bidding process as a power supplier, on conditions described in WAC 480-107-135 Conditions for
purhase of electrcal power or savings from a utilty's subsidiar or affliat. The utilty's RF submittl must dec-
lare the utility's or affliate's parcipation and must demonstrate how the utility wil satisfy the requiements of
WAC 480-107-135.
(3) Timg of the solicitation process.
(a) The rules in ths section do not apply when a utilty's integratedreourceplan, prepard puruat to WAC
480-100-238, demonstrtes that the utilty does not need additional capacity with thee year.
(b) A utilty must submit to the commission a proposed request for proposals and accompanying documentation
no later than one hundred thir-five days after the utilty's integratedresourceplan is due to be fied with the
commission. Interested perons wil have sixt days from the RFP's fiing date with the commission to submit
wrtten comments to the commission on the RFP. The commission wil approve or suspend the RFP with th
days after the close of the comment perod.
(c) A utilty must solicit bids for electc power and electcal savigs with th days of a commission order
approvig the RF.
(d) All bids will remain sealed until expiron of the solicitation perod specified in the RFP.
(4) In addition to the solicitation process required by these rules, a utilty may, at its own discretion, issue an RFP
that limits project proposals to resources with specific charcterstics. In addition, a utility, at its own discetion, may
~ 2010 Thomson Reuters. No Claim to Org. US Gov. Works.
WA ADC 480-107-015
WAC 480-107-015
Page 2
issue RFs more fruently than requied. by ths rue.
(5) Persons interested in receivig commission notice of a specific utilty's RFP filings can request the commission
to place their names on a mailing list for notification of futue RFP fiings by that utilty.
Statutory Authority: RCW 80.01.040 and 80.04.160. 06-08-025 (Docket No. UE-030423, Genera Order No. R-
530), S 480-107-015, fied 3/28/06, effecve 4/28/06.
-:General Materials (GM) - References, Anotations, or Tables?
WAC 480~107.015, WA ADC 480-107-015
WA ADC 480-107-015
END OF DOCUMNT
~ 2010 Thomson Reuters. No Claim to Org. US Gov. Works.
ORDER NO. 06-446
ENTERED 08/1 0/06
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
UM 1182
In the Matter of an Investigation Regarding )
Competitive Bidding. )
ORDER
DISPOSITION: GUIDELINES ADOPTED
On December 3,2004, the Northwest Independent Power Producers'
Coalition (NIPPC) fied a petition asking the Public Utilty Commission of Oregon
(Commission) to open an investigation regarding competitive bidding requirements for new
supply-side resource acquisitions applicable to Oregon's investor-owned electrc utilties.
The Commission subsequently opened an investigation. Numerous
conferences and workshops were held, as well as a public workshop with the Commissioners.
The process culminated with wrtten opening and reply comments, which were fied in
September and October 2005.
Intervening parties are Citizens' Utilty Board of Oregon (CUB), Northwest
Energy Coalition (NC), Renewable Northwest Project (RNP), Portland Metropolita
Association of Building Owners and Managers (BOMA), Idaho Power Company (Idaho
Power), NIPPC, Portland General Electrc Company (PGE), PacifiCorp, Industral
Customers of Northwest Utilties (lCNU), Oregon Deparent of Energy (ODOE), Cascade
Natual Gas Corporation (Cascade), Northwest Natual Gas Company (N), Avista
Corporation (Avista) and Commission staff (Staff).
Opening comments were filed by NIPPC, Idaho Power, PacifiCorp, ICNU,
PGE and Staff. CUB, RNP and NWEC fied joint opening comments. Reply comments
were fied by ODOE, NIPPC, Idaho Power, PacifiCorp, PGE and Staff. RNP and NWEC
fied joint reply comments.
Competitive Bidding Goals
In Order No 91-1383, the Commission adopted policies and guidelines
regarding competitive bidding for investor-owned electrc companies in Oregon.
ORDER NO. 06-446
Those goals have guided us well over the years. Therefore, we are makng only slight
modifications to those 1991 goals. The revised goals are:
1. Provide the opportity to minimize long-term energy costs, subject to
economic, legal and institutional constraints;
2. Complement Oregon's integrated resource planning process;
3. Not unduly constrain utility management's prerogative to acquire new
resources;
4. Be flexible, allowing the contrcting parties to negotiate mutually
beneficial exchange agreements; and
5. Be understandable and fair.
Finally, we agree with Staff that the Request For Proposal (RFP) process is a
"means to promote and improve the resource actions identified in the utility's IR (Integrted
Resource Plan) Action Plan." See, Staff Reply Comments at 7. Changes occur from the time
an Action Plan is acknowledged to when an RFP is released. The changes may be simple,
due merely to the passage of time, or drmatic, such as the Western power crisis in 2000.
While a utilty's Action Plan establishes a roadmap, it is not in the customer's best interest
for any utility to march lockstep without any deviation from the plan. We have found that
flexibility is important in meeting the goals set out above.
Competitive Bidding Guidelines
After receiving considerable input from the paries, Staff prepared a
straw proposal that updated the curent competitive bidding process. This proposal was
distrbuted to the paries, who then fied comments regarding the proposal. Staff made some
suggested changes to its initial straw proposal in light of parties' comments. These changes
are incorporated in Staffs reply comments.
We have considered all of the parties' comments and made our own changes
to the straw proposal fied by Staff. In adopting our own, we have reorganized and
renumbered the guidelines as originally presented by Staff in its straw proposaL. In the
following discussion, we wil explain the rationale for our guidelines, and address some of
the comments fied by the paricipants. We do not, however, summarize and address all of
the comments. The revised competitive bidding guidelines, attached as Appendix A and
incorporated herein, tae into account the experience we have gained since we adopted the
initial guidelines in 1991. While we are adopting a set of guidelines, we have drfted them
with both mandatory and permissive language so that the involved utilities wil clearly
understand our preferences.
We address each as it appears in Appendix A, followed by comment about the
specific guideline.
2
ORDER NO. 06-446
Adopted Bidding Guidelines
1. RFP Requirement: A utility must issue an RFP for all Major Resource
acquisitions identifed in its last acknowledged Integrated Resource Plan (IRP). Major
Resources are resources with durations greater than 5 years and quantities greater than 100
MW
Comment
The definition of Major Resources includes two thresholds: the duration of
the resource must be greater than five years, and the resource output must be greater than 100
MW. The parties did not agree on either threshold.
In its straw proposal, Staff recommended a threshold of five years. In general,
all parties agree with this threshold except for the utilities. The utilities believe that a ten-
year duration is a more appropriate threshold for triggering an RFP, so that they would have
the necessary flexibility to pursue mid-term resources. Further, the utilities express concern
with regulatory time commitments needed for approval, as well as the time commitment by
the utility in completing the RFP process.
As to output, Staff initially recommended a quantity threshold of 50 MW but,
in response to the parties' comments, does not oppose a higher threshold. The utilities seek a
higher threshold of 100 MW. In addition, PGE argues that the resource output should be
defined as MWa rather than MW. PGE contends that MWa ensures that non-dispatchable,
intermittent or energy limited resources, such as wind and hydro power, are treated on a
comparable basis with other technology types with higher expected capacity factors. RNP
and NWEC thought the resource quantity could be increased to 100 MW to accommodate
some of the utilities' concerns. RNP, however, opposed PGE's proposed use ofMWa,
noting such use would allow a utility to acquire wind projects as large as 300 MW without
bidding. ICND and NIPPC support Staffs initial 50 MW threshold, but provide little
justification for the lower standard.
We hold that the duration threshold should be .five years and the resource
output threshold should be 100 MW. While we understand the issues of regulatory time
commitments, and the limited exposure to customers of utilities acquiring mid-term resources
of five to ten years in duration, we believe that resources greater than five years, with a
resource output of more than 100 MW, should undergo a bidding process to ensure obtaining
least-cost resources for customers. We will review the practical effects of the duration
threshold over the next several years and revise it, if necessary.
Idaho Power raises two concerns not related to the duration or size of these
thresholds. First, Idaho Power explains that, unlike other Oregon utilities, its practice is to
conduct RFPs on a resource-by-resource basis. Idaho Power hopes to continue this approach,
enabling it to preserve the benefits associated with the diversity reflected in the IRP's
preferred portfolio. Second, Idaho Power believes that the acquisition of certain large
capital-intensive resources, such as a large jointly-owned thermal plant, might not lend itself
3
ORDER NO. 06-446
to a traditional RFP process because of project complexity, site-specific design and multiple
parties which may be involved.
The guideline does not require a utility to conduct an all-resource bid.
Accordingly, Idaho Power, or any other utility, may seek competitive bids on a resource-by-
resource basis. Furthermore, as to questions on whether an RFP process may not be suitable
for the acquisition of certain resources, a utility may seek a waiver of the bidding
requirement under the next guideline discussed below.
2. Exceptions to RFP Requirement: A utilty is not required to issue an RFP under
the following circumstances:
a. Acquisition of a Major Resource in an emergency or where there is a time-
limited resource opportunity of unique value to customers.
b. Acknowledged 1RP provides for an alternative acquisition methodfor a Major
Resource.
c. Commission waiver on a case-by-case basis.
Within 30 days of a Major Resource acquisition under Subsection (aJ above, the utility must
file a report with the Commission explaining how the requisite conditons have been met for
acting outside of the RFP requirement. The report must be served on all the parties and
interested persons in the utility's most recent rate case, RFP and 1RP dockets.
When requesting a waiver under Subsection (cJ above, the utility mustfìle its request with the
Commission and serve the request on all parties and interested persons in the utility's most
recent general rate case, RFP and 1RP dockets. The Commission wil issue an order
addressing the waiver request within 120 days, taking such oral and written comments as it
finds appropriate under the circumstances.
Comment
Staffs straw proposal included an exception to the RFP process in
emergencies or when action is needed to take advantage of a time-limited resource
opportnity. PacifiCorp contends this waiver should also include similar situations involving
"self-build" resources. Staff supports PacifiCorp's proposal. NIPPC does not oppose
PacifiCorp's waiver proposal, but questions how a utility self-build resource could ever be
utilized in response to an emergency or to take advantage of a time-limited opportnity.
We are cognizant that emergencies arise or specific, time-limited resource
opportnities become available, requiring utility action without an RFP process. When those
events occur, however, we want to be notified, in some detail, as to why the utility did not
use an RFP process for acquiring the Major Resource.
Further, there may be situations, such as that previously discussed under
Guideline 1, where a utility decides to ask for a waiver of the RFP process. We are
4
ORDER NO. 06-446
committed to resolving such requests quickly, using less than a full contested case process.
We find this to be appropriate, as we are not making any ratemaking decisions when we
waive an RFP requirement. We do not anticipate, however, that utilities wil be asking for
many such waivers, as we see competitive bidding to be the appropriate method for obtaining
Major Resources.
3. Affliate Bidding: A utility may allow its affliates to submit RFP bids.
If affliates are allowed to bid, the utility must blind all RFP bids and treat affliate bids the
same as all other bids.
4. Utilty Ownership Options: A utility may use a selfbuild option in an
RFP to provide a potential cost-based alternative for customers. A site-specifc, selfbuild
option proposed in this way is known as a Benchmark Resource. A utility may also consider
ownership transfers within an RFP solicitation.
Comment
These guidelines are taken from part of Guideline 9 in Staffs straw proposal.
Staffs terminology used in its initial straw proposal generated comment. Idaho Power notes
that, because it routinely employs an independent consultant in its RFP process, the company
does not distinguish between "Standard" and "Non-Standard" RFPs. PacifiCorp and PGE
propose more descriptive terms be used to differentiate between RFPs with and without a
utility self-build option. PacifiCorp also cautions that the term "Benchmark Resource"
should be limited to a utility's self-build options. PacifiCorp explains that other options may
be evaluated against a "benchmark," which could be the market or other market options.
We have addressed the parties' concerns about terminology by dispensing
with labels. Indeed, as further discussed below, such distinctions generally are not needed
because all RFPs now require the use of an independent evaluator. To address PacifiCorp's
specific concern, we define a Benchmark Resource as a site-specific, self-build option for
which there is a commitment to proceed if it is the resource selected through the RFP. This
definition does not preclude a utility from designating the market as an alternative
comparator during the RFP evaluation process. If no resources are acquired through the RFP
because bids are inferior to the evaluation benchmark, we do not expect an emergency self-
build shortly thereafter.
Other comments focused on whether independent power producers should be
given an opportnity to build on the utility's site as part of an RFP that includes a self-build
option. NIPPC, ICNU, and CUB are in favor of such an opportnity; PGE and PacifiCorp
oppose it. PGE explains that, if bidders have access to the utility's site, then the utility
should be given access to bidders' sites. Staff raises some legal problems with requiring
utilities to provide independent bidders access to utility sites.
We wil not require a utility to offer its site locations for development by
independent power producers. Granted, a utility could allow a resource to be built upon a
particular named piece of utility property. However, that is a decision to be made by the
5
ORDER NO. 06-446
utility. We share Staffs concerns, raised after consultation with the Department of Justice,
whether this Commission has the legal authority to implement the NIPPC and ICNU
recommendation. Rather, we adopt Staffs suggestion that the utility be encouraged to offer
its site for third part development, as PacifiCorp proposed in its RFP for resources in 2012,
docket UM 1208.
Finally, CUB and ODOE argue that independent bidders should be given the
right to use a utility's transmission facilities. Again, PGE opposes such access, and contends
that any use ofPGE transmission facilities would have to comply with requirements
mandated by the Federal Energy Regulatory Commission (FERC).
We wil not impose third party access to a utility's transmission facilities
beyond the access allowed under FERC rules. We encourage utilities, however, to provide
information on the availability of transmission facilities and planed projects to bidders.
5. Independent Evaluator (IE): An IE must be used in each RFP to help
ensure that all offers are treated fairly. Commission Staff with input from the utilty and
interested, non-bidding parties, wil recommend an IE to the Commission, which wil then
select or approve an lEfor the RFP. The IE must be independent of the utilty and likely,
potential bidders, and also be experienced and competent to perform all IEfunctions
identifed in these Guidelines. The IE wil contract with and be paid by the utility. The IE
should confer with Commission staff as needed, on the IE's duties under these Guidelines.
The utility may request recovery of its payments to the IE in customer rates.
Comment
The parties addressed various issues related to the use, qualifications,
selection, reporting, and costs of an IE. As to use, the parties generally focus on need for an
IE when an affiliate or self-build option is involved. NIPPC explains that, in such situations,
an IE is integral to assuring a comparable evaluation of resources.
We conclude that an IE should be used for all RFPs. While an IE's role is not
as involved for an RFP without ownership options or Affiliate Bidding, we find that using an
IE has value. We want an independent overseer of the process. As for qualifications, all
parties agree on the need for impartiality, but the utilities claim Staffs straw proposal-
excluding all candidates providing, or those that have recently provided, consulting services
to participants in the western energy markets-is too limiting. Such a restriction, according
to PacifiCorp, would preclude the ability to obtain an IE with suffcient experience.
PacifiCorp contends that guidelines should balance the need for both independence and
experience, without sacrificing one or the other. Staff is persuaded by this argument and
supports PacifiCorp's recommendation.
We adopt PacifiCorp's proposal that the guidelines should seek a qualified IE
in terms of both independence and experience. We also adopt PacifiCorp's recommendation
that any IE candidate disclose any actual or potential conflicts to help the Commission assess
independence.
6
ORDER NO. 06-446
Paries have different views on the process used to select an IE. Staff
originally proposed that the IEs be selected by the utilty and Staff from a list of qualified
candidates. ICNU believes that only Staff, with input from non-bidding parties, should select
the IE. ODOE proposes that the utility should be allowed to paricipate in the IE selection,
but not have the final authority to select. Most parties agree that, once selected, the IE should
report to Staff, not the utility.
We believe the utility and non-bidders should participate in the process and
provide input to Staff. Staff, however, should make a final recommendation to the
Commission for approval, which could be accomplished at a public meeting. In approving a
final selection, we wil give due consideration to an IE already selected for the RFP by
another state commission.
We fuher conclude that the contract for the IE's services should be entered
into by the utility and IE. The utilty should pay the IE and otherwise manage and administer
the contract. The Commission should not be a par to the contract. We recognize that such
a contractual arrangement fails to provide the Commission or Staff the legal right to control
or direct the IE's activities in response to any reporting requirement and may be problematic.
Nonetheless, we are confident that, in the interest of obtaining RFP acknowledgement, the
utilty wil encourage the IE to consult and confer with Staff to help address any actions
needed on the part of the IE.
Finally, with regard to IE costs, Staff originally proposed that the IE be paid
by the utility through assessments on all bidders, including the utility. In comments,
however, most parties, including Staff, favor the payment by the utility with possible
recovery from customers. ODOE explains that adding IE costs to the already high cost of
preparng a bid might discourage bidder participation, paricularly for small projects, as is
often the case with renewable resource and cogeneration projects.
We agree that if an IE is useful to the process, and we believe that to be so,
then the cost of the IE should be included in rates. Utilties may request deferred accounting
to track the costs of IEs for later pmdency review and potential inclusion in rates.
6. RFP Design: The utilty wil prepare a draft RFP and provide it to all
parties and interested persons in the utilty's most recent general rate case, RFP and IRP
dockets. The utilty must conduct bidder and stakeholder workshops on the draft RFP. The
utilty wil then submit a final draft RFP to the Commission for approval, as described in
Guideline 7 below. The draft RFPs must set forth any minimum bidder requirements for
credit and capabilty, along with bid evaluation and scoring criteria. The utility may set a
minimum resource size, but Qualifing Facilities larger than 10 MW must be allowed to
participate. The final draft submitted to the Commission must also include standard form
contracts. However, the utilty must allow bidders to negotiate mutually agreeable final
contract terms that are diferent from ones in the standard form contracts. The utilty wil
consult with the IE in preparing the RFPs, and the IE wil submit its assessment of the final
draft RFP to the Commission when the utility files for RFP approval.
7
ORDER NO. 06-446
Comment
This guideline combines features originally set forth in Guidelines 9 and 10 of
Staff s straw proposaL. In Guideline 9, Staff referred to the joint responsibility of the utility
and IE to draft certain RFP requirements and develop minimum bidder criteria. Staff also
proposed the utility allow opportnities for public involvement in the RFP and, to facilitate
such input, provide 60-day advanced notice of its intention to conduct an RFP and possibly
conduct workshops. In Guideline i 0, Staff recommended that the utility may propose
minimum bidder requirements for credit and capability, and that such requirements would
also be subject to public comment during the RFP design.
In comments, RNP supports the proposed public input opportnities. Idaho
Power, however, raises concerns about the release of bid evaluation and scoring criteria
during public workshops. Idaho Power considers the criteria to be proprietary information
that should be afforded protection. PacifiCorp also raises concerns about Staffs use of the
word "may" in recommending that a utility may propose minimum bidder requirements.
PacifiCorp is concerned that such language might suggest that minimum bidder requirements
are not necessary. On this issue, Idaho Power provides a list of minimum bidder attributes
the company customarily establishes, with the assistance of an independent consultant.
PacifiCorp and Staff agree that the IE and other parties should be allowed to review the
proposed minimum bidder requirements, which should be approved by the Commission.
Lastly, ODOE contends that all resources over 10 MW should be allowed to bid, in order to
be consistent with the Commission's limit for standard avoided cost rates and standard
contracts for Qualifying Facilities, and that bids should not be excluded because of the lack
of transmission capabilities.
In adopting the guideline above, we revise the language to clarify that the
utility is responsible for preparing the draft RFP, conducting bidder and stakeholder
workshops, and submitting the final RFP to the Commission for approval. The utility must,
however, consult with the IE during these activities, and the IE will submit an assessment of
the final RFP to the Commission during the approval phase discussed below.
We also modify the language used in the straw proposal to require the utility
to conduct bidder and stakeholder workshops. We required PacifiCorp to utilize this open
process in its 2004 RFP, and believe it should be mandatory to allow all interested persons
the ability to participate and provide input on the RFP design. We remove, however, the 60-
day advance notice requirement proposed in Staffs straw proposaL. This requirement
apparently was based on current practice under Order No. 91-1383, which contemplates
Commission review and approval of a draft IRP in 60 days. Under the guideline adopted
above, the utility must widely distribute copies of the draft RFP and conduct workshops with
interested parties. We decline to establish a minimum time period for such activities, but
expect the utilities to provide ample time to ensure an adequate opportnity for public input.
In response to PacifiCorp's concerns about minimum bidder requirements, we
accept Staffs explanation that its straw proposal was not intended to alter the principles,
8
ORDER NO. 06-446
articulated in Order No. 91-1383, that utilities should address the credit and capability of
prospective bidders in order to protect ratepayers.
We agree with ODOE with respect to qualifying facilities under the Public
Utility Regulatory Policies Act, and include language that prohibits utilities from excluding
Qualifying Facilities larger than 10 MW from participating. In addition, we add language to
the guideline to make clear that a utility should be willing to negotiate on the terms of the
standard contract to achieve comparable outcomes. We conclude, however, that ODOE's
other concern about bidders that lack transmission capabilities is more appropriately
addressed during the review of an individual RFP.
Finally, with respect to evaluation and scoring criteria, we conclude that
bidders should be given enough information during the RFP design process to determine how
important different project and bidder characteristics are to the utility. Specific scoring
criteria, such as points awarded for non-price factors, will be limited to non-bidding parties
under the terms of Guideline 12, further addressed below.
7. RFP Approval: The Commission wil solicit public comment on the
utility'sfìnal draft RFP, including the proposed minimum bidder requirements and bid
scoring and evaluation criteria. Public comment and Commission review should focus on:
(1) the alignment of the utilty's RFP with its acknowledged IRP; (2) whether the RFP
satisfies the Commission's competitive bidding guidelines; and (3) the overall fairness of the
utility's proposed bidding process. After reviewing the RFP and the public comments, the
Commission may approve the RFP with any conditons and modifcations deemed necessary.
The Commission may consider the impact of multi-state regulation, including requirements
imposed by other states for the RFP process. The Commission wil target a decision within
60 days after the filing of the final draft RFP, unless the utilty requests a longer review
period when it submits the final draft RFP for approvaL.
Comment
We made two primary modifications to Staffs straw proposal to address
concerns raised by commenting parties. First, in response to ICNU's questions about the
length of time needed for Commission approval of an RFP, we extend the review period by
15 days, to 60 days. While we expect that interested persons wil have been involved in the
RFP process during its drafting and wil have the opportnity to raise concerns and obtain
information prior to the utility formally filing the RFP, we extend the process to address any
concerns about discovery. Second, we add language proposed by PacifiCorp to clarify the
focus of the Commission's review in approving an RFP, and to acknowledge that this review
may include consideration of requirements imposed by other state commissions.
To respond to other concerns about the effect of Commission approval of an
RFP, we clarify that Commission approval is simply a determination on the three criteria set
out in the guideline-that is, whether the utility's RFP is consistent with its acknowledged
IRP, whether the RFP satisfies these guidelines, and whether the utility's proposed bidding
process is fair. The approval is simply that: the RFP meets these criteria, does not meet the
9
ORDER NO. 06-446
criteria, or would meet the criteria with certain conditions and modifications. Any
ratemaking determinations would occur at a later time.
8. Benchmark Resource Score: The utility must submit a detailed score
for any Benchmark Resource, with supporting cost information, to the Commission and IE
prior to the opening of bidding. The score should be assigned to the Benchmark Resource
using the same bid scoring and evaluation criteria that wil be used to score market bids.
Information provided to the Commission and IE must include any transmission
arrangements, and all other information necessary to score the Benchmark Resource. If
during the course of the RFP process, the utility, with input from the IE, determines that
bidder updates are appropriate, the utility may also update the costs and score for the
Benchmark Resource. The IE wil review the reasonableness of the score(s)for the
Benchmark Resource. The information provided to the Commission and IE wil be sealed
and held until the bidding in the RFP has concluded.
Comment
We adopt this guideline without substantive modification from Staffs straw
proposal. We acknowledge PGE's concern about the inclusion of transmission
arrangements, and agree that a utility should not be required to reveal this information to
other bidders. As PGE notes, a utility should have the same opportunity as other bidders to
keep this type of information blinded from other bidders.
We reject ICND's suggestion that, if bidder updates are allowed, the IE
should evaluate whether the opportnity for updates resulted in favoring the utility or an
affliate resource. We are satisfied that, in such situations, the opportnity to rebid or provide
updates would be extended to all bidders. Any concerns about the timing of the updates may
be raised during the acknowledgement for the final short-list of bids. We also find that the
guidelines are clear enough on the equal treatment of the Benchmark Resource, and conclude
there is no need to add language, proposed by ODOE, to clarify that the term "bids" includes
the Benchmark Resource.
9. Bid Scoring and Evaluation Criteria:
a. Selection of an initial short-list of bids should be based on price and
non-price factors, and provide resource diversity (e.g., with respect to fuel type and resource
duration). The utility should use the inital prices submitted by the bidders to determine each
bid's price score. The price score should be calculated as the ratio of the bid's projected
total cost per megawatt-hour to forward market prices, using real-levelized or annuity
methods. The non-price score should be based on resource characteristics identifed in the
utility's acknowledged IRP Action Plan (e.g., dispatch flexibility, resource term, portfolio
diversity, etc.) and conformance to the standard form contracts attached to the RFP.
b. Selection of the final short-list of bids should be based, in part, on the
results of modeling the effect of candidate resources on overall system costs and risks. The
portfolio modeling and decision criteria used to select the final short-list of bids must be
10
ORDER NO. 06-446
consistent with the modeling and decision criteria used to develop the utilty's acknowledged
IRP Action Plan. The IE must have full access to the utility's production cost and risk
models.
c. Consideration of ratings agency debt imputation should be reserved for
the selection of the final bids from the initial short-list of bids. The Commission may require
the utilty to obtain an advisory opinion from a ratings agency to substantiate the utilty's
analysis and final decision.
Comment
CUB, NWEC, and RNP fied joint comments recommending several
modifications to Staffs straw proposal on bid scoring and evaluation criteria. First, the
public interest parties recommend that the selection of the initial short-list of bids should not
be based on a comparison of resources of different fuel types. Rather, they prefer selection
from pools of each type of resource. Staff disagrees, and responds that a utility may improve
diversity by having an initial short-list with different fuel types from an all-source bid, or by
running simultaneous resource specific solicitations. Staff explains that resource-specific
bids should occur at the same time in case the market yields different costs than assumed in
the IRP, indicating a preference to acquire some types of resources over others. We agree
with Staffs proposed approach, but add language in subsection (a) to require resource
diversity in the initial short-list.
CUB, NWEC, and RNP also recommend additional procedures be used if the
bids and other updated information are significantly different from the original inputs used in
the IRP. The parties define "significantly different" to mean that the average bids in the
initial short-list for each resource type differ by more than 20 percent from those modeled in
the IRP. If that threshold is met or exceeded, the public interest parties contend that the
utility should re-run the modeling used in the IRP. Staff, PGE and PacifiCorp oppose the
proposal. Staff explains that such additional process would divert time and resources
determining whether any bid differences are significant, rather than focusing those resources
on determining the best combination of bids. We agree and prefer to view the competitive
bidding process as a search process aimed at helping find the best combination of resources
for ratepayers. As stated in subsection (b) of this guideline, we expect the utility to apply the
same analytical approach and judgment in selecting the final short-list as it did in developing
its acknowledged IRP Action Plan. For example, it should apply the same tradeoff between
cost and risk in the bid process as it did in the IRP, and not simply focus on expected cost at
the acquisition stage.
Staff, PGE and ODOE recommend other refinements to the guideline.
Following publication of its straw proposal, Staff fied comments proposing that utilities be
allowed to propose environmental scoring based on the environmental analysis included in its
acknowledged IRP. PGE supports Staffs suggestion, adding that it provides the flexibility
needed to adapt to changing circumstances and links the environmental scoring to the IRP
analysis process. We share Staffs and PGE's view, but conclude that no modifications are
required, given the guideline's link to the IRP in subsections (a) and (b). Similarly, we agree
i i
ORDER NO. 06-446
with ODOE that utilities should, in selecting initial short-list bids and the final short-list,
include the transmission and generation integration costs. Again, we believe the guideline, as
wrtten, includes that requirement.
Idaho Power and PGE raise questions about the abilty of a utility to provide
an IE with access to production cost and risk models. The utilities explain that certain
licensing agreements with softare vendors may preclude an IE's ability to access these
analytical tools. We acknowledge the utilities' concerns. We expect, however, that utilities
wil tae all reasonable actions necessar to obtain a license that allows an IE to access these
models, and wil justify any failure to do so when seeking RFP approvaL.
Finally, many parties focus on how to address debt imputation for power
purchase agreements (PP A). PGE and PacifiCorp want debt imputation considered at all
stages of bidding and scoring, while Staff recommends that debt imputation only be
considered at the final stage. Other parties, such as NIPPC, recommend that debt imputation
not be considered at all in the bid scoring and evaluation.
To consider debt imputation at all stages is too cumbersome a process and not
nec,essary to meet the goals of these guidelines. We understand that by considering debt
imputation solely at the final stage, we risk giving an advantage to resources with imputed
debt in determining the initial short-list. We do not consider that risk to be significant,
however. Furher, we agree with Staff that reserving analysis of imputed debt until the final
stage decreases the possibility of disqualifying a power purchase agreement that should be
considered.
10. Utility and IE Roles in the RFP Process:
a. The utility wil conduct the RFP process, score the bids, select the initial
and final short-lists, and undertake negotiations with bidders.
b. The IE wil oversee the RFP process to ensure that it is conducted fairly
and properly.
c. If the RFP does not allow affliate bidding and does not include
ownership options (i.e., the utilty is not including a Benchmark Resource or considering
ownership transfers), the IE wil check whether the utilty's scoring of the bids and selection
of the short-lists are reasonable.
d. If the RFP allows affliate bidding or includes ownership options, the IE
wil independently score the utilty's Benchmark Resource (if any) and all or a sample of the
bids to determine whether the selections for the initial and final short-lists are reasonable.
In addition, the IE wil evaluate the unique risks and advantages associated with the
Benchmark Resource (if used), including the regulatory treatment of costs or benefits related
to actual construction cost and plant operation diferingfrom what was projectedfor the
RFP.
12
ORDER NO. 06-446
e. Once the competing bids and Benchmark Resource (if used) have been
scored and evaluated by the utility and the IE, the two should compare results. The utility
and IE should attempt to reconcile and resolve any scoring diferences. If the two are unable
to agree, the IE should explain the diferences in its Closing Report.
Comment
We made several revisions to this guideline as originally proposed in Staffs
straw proposaL. First, we modify the language to make it consistent with our earlier decision
to require an IE for all RFPs. Second, we clarify the role of the IE in the RFP process.
ICND recommends, and Staff concurs, that the IE should independently review, rather than
merely "validate," the utility's bid scoring. We agree, provided that the RFP allows affiiate
bidding or includes ownership options. We add language to clarify this role, and to require
the IE to score the Benchmark Resource, and as many bids as the IE believes to be necessary
to conclude that the process was fair and the result was reasonable. We do not impose such a
requirement where the utility is not including a Benchmark Resource or considering
ownership transfers or affiiate bids. In such cases, the IE need only validate the utility's
scoring.
Third, ICND also proposes that, if differences arise between the utility's and
the IE's scoring, the IE should be under no obligation to work with the utility to reconcile the
differences. On this matter, we share Staffs opinion that the IE and the utility should
attempt to resolve differences in bid scoring and evaluation. We agree with ICND, however,
that compromise should not be required, and have added language accordingly.
Fourth, pursuant to PGE's proposal, we modify language, set forth in
subsection (d), to make the discussion on risk more neutral. We reject, however,
PacifiCorp's recommendations that the Benchmark Resource option should not be treated
and evaluated like a bid and that non-price factors, such as possible cost overrns, should not
be considered. We recognize that Benchmark Resources are different from other bids in that
price and performance is not fixed. Such differences, however, emphasize the need to
consider the additional risk customers bear in deciding the best option from the RFP. This
risk to customers is present even if the actual costs of the Benchmark Resource are equally
likely to be lower or higher than projected in the RFP.
11. IE Closing Report: The IE wil prepare a Closing Reportfor the
Commission after the utility has selected the final short-list. In addition, the IE wil make
any detailed bid scoring and evaluation results available to the utility, Commission staff and
non-bidding parties in the RFP docket, subject to the terms of a protective order.
13
ORDER NO. 06-446
Comment
While this guideline generated little discussion or dissension, we modify the
language of straw proposal to recognize that the IE wil be involved in the acknowledgment
process (See Guideline 13), and should complete the Closing Report before then, and to
clarify that the IE's bid scoring and evaluation results wil be subject to protective order (See
Guideline 12).
12. Confidential Treatment of Bid and Score Information: Bidding
information, including the utility's cost support for any Benchmark Resource, as well as
detailed bid scoring and evaluation results wil be made available to the utility, Commission
staff and non-bidding parties under protective orders that limit use of the information to RFP
approval and acknowledgment and to cost recovery proceedings.
Due to the competitive nature of the power market and generation
development business, PacifiCorp raises concerns about the disclosure of detailed bid scoring
and evaluation results to non-bidding consumer advocates. PacifiCorp explains that these
parties may include entities that could use this information to the commercial disadvantage of
bidders or the utility. RNP and Staff believe that such information should be made available.
Staff suggests that PacifiCorp's concerns could be addressed through heightened protective
procedures. We agree with RNP and Staff that non-bidding parties should have access to this
information and have written the guideline accordingly.
13. RFP Acknowledgment: The utility may request that the Commission
acknowledge the utility's selection of the final short-list of RFP resources. The IE wil
participate in the RFP acknowledgment proceeding. Acknowledgment has the same meaning
as assigned to that term in Commission Order No. 89-507. RFP acknowledgment wil have
the same legal force and effect as IRP acknowledgment in any future cost recovery
proceeding. The utility's request should discuss the consistency of the final short-list with
the company's acknowledged IRP Action Plan.
The final suggested guideline by Staff in its straw proposal provides the utility
an opportnity to ask for Commission acknowledgment of the final short-list ofRFP
resources. ICND questions the value of this process, noting that it does not appear to limit
utility bias or otherwise improve the process. To the contrary, ICND suggests such approval
only benefits utilities by providing greater assurance that their resource procurement process
will be found reasonable in a subsequent rate proceeding. If the Commission is inclined to
acknowledge the results of the RFPs, ICND recommends the Commission defer this issue
until it has been proven that the utilities are not biasing the results. PacifiCorp, Idaho Power,
PGE, NIPPC and Staff favor Commission acknowledgement. These parties contend such
acknowledgement would have the same meaning as that used in the IRP process.
Consequently, Staff and the other parties believe that acknowledgment would not restrict the
Commission's ability to disallow costs of resources acquired through the RFP process.
We adopt the proposal to allow the utilities the ability to request Commission
acknowledgement. Such Commission action would carry the same weight as an
14
ORDER NO. 06-446
acknowledgment of an IRP-that is, a conclusion that the final short-list seems reasonable,
based on the information provided to the Commission at that time. It wil not, as ICNU fears,
provide a guarantee of favorable ratemakng treatment during rate recovery. Moreover,
Commission acknowledgement is not mandatory. The Commission may decline to
acknowledge. We also direct the utility to explain whether its final short-list is consistent
with the near-term resource acquisitions identified in its acknowledged IRP.
ODOE recommends that the Commission should acknowledge resource
amounts, rather than final short-lists. ODOE provides little explanation to support this
recommendation, but it appears the agency is concerned that the utility wil not acquire
sufficient resource diversity. We decline ODOE's proposaL. Ifadopted, we are concerned
that such acknowledgment would segment the short-list and weaken the utilty's bargaining
position. Moreover, ODOE's apparent concerns about resource diversity are mitigated by the
utility's ultimate responsibilty for obtaining the best deal in terms of cost and risk though
the RFP process.
CONCLUSION
For the reasons set forth above, we conclude that the RFP guidelines, attched
as Appendix A, should be adopted. These guidelines become effective on the date this order
is entered, and apply to all pending and future RFP proceedings.
15
ORDER NO. 06
ORDER
adopted.
IT is ORDERED that the RFP guidelines, attached as Appendix A, are
Made, entered, and effective AUG i 02006
~Ra~:; ~
Commissioner
A par may request rehearg or reconsideration of ths order puruat to ORS 756.561. A
request for rehearng or reconsideration must be filed with the Coinission withi 60 days of
the date of service of ths order. The request must comply with the requirements in OAR 860-
014-0095. A copy of any such request must also be served on each par to the proceedig as
provided by OAR 860-013-0070(2). A par may appeal ths order by filing a petition for
review with the Cour of Appeals in compliance with ORS 183.480-183.484.
16
ORDER NO. 06-446
UM 1182
Competitive Bidding Guidelies
1. RFP Requirement: A utility must issue an RFP for all Major Resource
acquisitions identified in its last acknowledged IRP. Major Resources are resources with
durations greater than 5 years and quantities greater than 100 MW.
2. Exceptions to RFP Requirement: A utility is not required to issue an RFP
under the following circumstances:
a. Acquisition of a Major Resource in an emergency or where there is a time-
limited resource opportnity of unque value to customers.
b. Acknowledged IR provides for an alterative acquisition method for a Major
Resource.
c. Commssion waiver on a case-by-case basis.
Within 30 days of a Major Resource acquisition under Subsection (a) above, the utility
must file a report with the Commission explaining how the requisite conditions have been
met for acting outside of the RFP requirement. The report must be served on all the
paries and interested persons in the utility's most recent rate case, RFP and IR dockets.
When requesting a waiver under Subsection ( c) above, the utility must file its request
with the Commission and serve the request on all paries and interested persons in the
utility's most recent general rate case, RFP and IRP dockets. The Commission will issue
an order addressing the waiver request within 120 days, takg such oral and wrtten
comments as it finds appropriate under the circumstances.
3. Affiate Biddig: A utility may allow its affliates to submit RFP bids. If
affliates are allowed to bid, the utility must blind all RFP bids and treat affiliate bids the
same as all other bids.
4. Utity Ownership Options: A utility may use a self-build option in an RFP to
provide a potential cost-based alterative for customers. A site-specific, self-build option
proposed in this way is known as a Benchmark Resource. A utility may also consider
ownership transfers within an RFP solicitation.
s. Independent Evaluator (IE): An IE must be used in each RFP to help ensure
that all offers are treated fairly. Commission staff with input from the utility and
interested, non-bidding paries, will recommend an IE to the Commission, which will
then select or approve an IE for the RFP. The IE must be independent of the utilty and
likely, potential bidders and also be experenced and competent to perorm all IE
functions identified in these Guidelines. The IE wil contract with and be paid by the
1 APPENDIX APAGE-l0FL-
ORDER NO. 06-446
utility. The IE should confer with Commission staff as needed on the IE's duties under
these Guidelines. The utilty may request recovery of its payments to the IE in customer
rates.
6. RFP Design: The utility wil prepare a draft RFP and provide it to all pares and
interested persons in the utility's most recent general rate case, RFP and IRP dockets.
The utility must conduct bidder and steholder workshops on the draft RFP. The utilty
wil then submit a final draft RFP to the Commission for approval, as described
in paragraph 7 below. The draft RFPs must set forth any minimum bidder requirements
for credit and capability, along with bid evaluation and scoring critera. The utility may
set a minimum resource size, but Qulifyng Facilities larger than 10 MW must be
allowed to paricipate. The final draft submitted to the Commission must also include
standard form contracts. However, the utility must allow bidders to negotiate mutually
agreeable final contract ters that are different from ones in the standard form contracts.
The utility wil consult with the IE in preparng the RFPs, and the IE wil submit its
assessment of the final draft RFP to the Commission when the utility files for RFP
approvaL.
7. RFP Approval: The Commission wil solicit public comment on the utility's
final draft RFP, including the proposed minimum bidder requirements and bid scoring
and evaluation crtera. Public comment and Commission review should focus on: (1) the
alignent of the utility's RFP with its acknowledged IR; (2) whether the RFP satisfies
the Commission's competitive bidding gudelines; and (3) the overall faiess of the
utility's proposed bidding process. After reviewing the RFP and the public comments,
the Commission may approve the RFP with any conditions and modifications deemed
necessar. The Commssion may consider the impact of multi-state regulation, including
requirements imposed by other states for the RFP process. The Commission wil target a
decision withn 60 days after the fiing of the final draft RFP, unless the utility requests a
longer review perod when it submits the final draft RFP for approvaL.
8. Benchmark Resource Score: The utility must submit a detailed score for any
Benchmark Resource, with supportng cost information, to the Commission and IE prior
to the openg of bidding. The score should be assigned to the Benchmark Resource
using the same bid scoring and evaluation crteria that wil be used to score market bids.
Information provided to the Commission and IE must include any transmission
arangements and all other information necessar to score the Benchmark Resource. If,
durng the course of the RFP process, the utility, with input from the IE, deterines that
bidder updates are appropriate, the utility may also update the costs and score for the
Benchmark Resource. The IE wil review the reasonableness of the score(s) for the
Benchmark Resource. The information provided to the Commission and IE will be
sealed and held until the bidding in the RFP has concluded.
2 APPENDIX Jl
PAGE AL OF.!
ORDER NO. 06-446
9. Bid Scoring and Evaluation Criteria:
a. Selection of an initial short-list of bids should be based on price and non-price
factors and provide resource diverity (e.g., with respect to fuel type and
resource duration). The utility should use the initial prices submitted by the
bidders to deterine each bid's price score. The price score should be
calculated as the ratio of the bid's projected total cost per megawatt-hour to
forward market prices using real-levelized or anuity methods. The non';price
score should be based on resource characterstics identified in the utilty's
acknowledged IRP Action Plan (e.g., dispatch flexibilty, resource ter,
portfolio diversity, etc.) and conformance to the standard form contract
attached to the RF.
b. Selection of the final short-list of bids should be based in par on the results of
modeling the effect of candidate resources on overall system costs and risks.
The portfolio modeling and decision critera used to select the final short-list
of bids must be consistent with the modeling and decision crtera used to
develop the utility's acknowledged IRP Action Plan. The IE wil have ful
access to the utility's production cost and risk models.
c. Consideration of ratings agency debt imputation should be reserved for the
selection of the final bids from the initial short-list of bids. The utilty should
obtain an advisory opinion from a ratings agency to substantiate its analysis
and final decision, if requested by the Commission.
10. Utilty and IE Roles in RFP Process:
a. The utility will conduct the RFP process, score the bids, select the initial and
final short-lists, and widertake negotiations with bidders.
b. The IE will oversee the RFP process to ensure that it is conducted fairly and
properly.
c. If the RFP does not allow affliate bidding and does not include ownerhip
options (i.e., the utility is not including a Benchmark Resource or considerng
ownership transfers), the IE wil check whether the utility's scoring of the bids
and selection of the short-lists are reasonable.
d. If the RFP allows affliate bidding or includes ownership options, the IE wil
independently score the utility's Benchmark Resource (if any) and all or a
sample of the bids to deterine whether the selections for the initial and final
short-lists are reasonable. In addition, the IE will evaluate the unique risks
and advantages associated with the Benchmark Resource (if used), including
the regulatory treatment of costs or benefits related to actul constrction cost
and plant operation differing from what was projected for the RFP.
3 APPENDIX .1PAGE-i0F L
ORDER NO. 06-446
e. Once the competing bids and Benchmark Resource (if used) have been scored
and evaluated by the utility and the IE, the two should compare results. The
utility and IE should attempt to recncile and resolve any scoring differences.
If the two are unable to agree, the IE should explain the differences in its
Closing Report.
11. IE Closing Report: The IE wil prepare a Closing Report for the Commission
after the utilty has selected the final short-list. In addition, the IE will make any detailed
bid scoring and evaluation results available to the utility, Commission staff, and non-
bidding pares in the RFP docket subject to the terms of a protective order.
12. Confidential Treatment of Bid and Score Information: Bidding information,
including the utility's cost support for any Benchmark Resource, as well as detailed bid
scoring and evaluation results wil be made available to the utilty, Commission staff and
non-bidding paries under protective orders that limit use of the information to RFP
approval and acknowledgment and to cost recovery proceedings.
13. RFP Acknowledgment: The utility may request that the Commssion
acknowledge the utility's selection of the final short-list ofRFP resources. The IE wil
paricipate in the RFP acknowledgment proceeding. Acknowledgment has the same
meaning as assigned to that term in Commssion Order No. 89-507. RFP
acknowledgment wil have the same legal force and effect as IR acknowledgment in any
futue cost recover proceeding. The utility's request should discuss the consistency of
the final short-list with the company's acknowledged IRP Action Plan.
4 ,lPENDlX /lpAGE Jt OF !f
UT Admin Code R746-420. Requests for Approval of a Solicitation Process. September 1... Page 1 of 13
Utah Administrative Code
The Utah Administrative Code is the body of all effective administrative rules as
compiled and organized by the Division of Administrative Rules (Subsection 6.3G:3:1Q2
(~ì; see also Secions 63G:.3.:ZQJ and 702).
Download the BIF file
Rule R746-420. Requests for Approval of a Solicitation Process.
As in effect on September 1,2009
Table of Contents
. R746-420:1. General Provisions.
· RZ46::420.:3,..$.Qlici1atiQnJ::fQçes,s.
. R746-420-4c QLlalífications of Independent Evaluator..
· 8746:420:S..Payments tQ Independent(;YaluatQL
· 8746:420-6.fanctiQns.QLI.ndeQe.lldeoU:"ya!.iltoL.
· K,E'r
.Q¡:te QfEneçtment .QrLaSlSJJ.bstaotiv.e8JIl.endm.enJ
· 8I,tD91i.l.!i1.g, J mpJ.ementeçLQLLnterj:reJed.l,aw
R746-420-1. General Provisions.
(1) A Soliciting Utilty filing for approval of a proposed Solicitation and
Solicitation Process in accordance with the Energy Resource Procurement Act (Act)
shall fie a request for approval of the proposed Solicitation and Solicitation Process
(Application) which shall include testimony and exhibits which provide:
(a) A description of the Solicitation Process the Soliciting Utilty proposes to use;
(b) A copy of the complete proposed Solicitation with appendices, attachments
and draft pro forma contracts if applicable;
(c) Information to demonstrate that the filing complies with the requirements of
the Act and Commission rules;
(d) Descriptions of the criteria and the methodology, including any weighting and
ranking factors, to be used to evaluate bids;
(e) Information directing parties to all questions and answers regarding the
Solicitation and Solicitation Process posted on an appropriate website;
(0 Information on how participants in the pre-issuance Bidders' conference
should submit advance written questions to the Soliciting Utilty that are to be
addressed at the pre-issuance Bidder's conference;
(g) A list of potentially interested partes to whom the Soliciting Utilty has sent
or will send notices of the filing of the request for approval of the proposed
solicitation with the Commission; and
(h) Other information as the Commission may require.
(2) At the time of filing, or earlier if practicable, the Soliciting Utility shal provide
to the Independent Evaluator, data, information and models necessary for the
Independent Evaluator to analyze and verify the models.
http://www.rules.utah.gov/publicat/code/r746fr746-420.htm 1/13/2010
UT Admin Code R 746-420. Requests for Approval of a Solicitation Process. September 1... Page 2 of 13
(3) Pre Bid-Issuance Procedures. Prior to applying for approval of a proposed
Solicitation:
(a) The Soliciting Utilty shall give advance notice to the Commission as soon as
practicable that it intends to conduct a Solicitation Process but not later than 60 days
prior to the filing of the draft Solicitation and Solicitation Process to enable the
Commission to promptly hire an Independent Evaluator;
(b) The Soliciting Utilty shall hold a pre-issuance Bidders' conference in Utah,
with both in-person and conference call participation at least 15 days prior to the
time the Solicitation is fied for approvaL. Interested persons may attend this
conference. The Soliciting Utilty shall ensure that all questions and answers, made
at the pre- issuance Bidder's conference, are provided or recorded in writing to the
extent practicable;
(c) At the pre-issuance Bidder's conference, the Soliciting Utility should describe
to the attendees in attendance the process, timeline for Commission review of the
draft Solicitation and opportunities for providing input, including sending comments
and/or questions to the Independent Evaluator; and
(d) No later than the date of filing of the proposed Solicitation, the Soliciting
Utilty shall issue a notice to potential bidders regarding the timeline for providing
comments and other input regarding the draft Solicitation.
(4) Process for Approval of a Solicitation.
(a) Comments on the Soliciting Utilty's Application shall be filed with the
Commission within 45 days after the filing of the Application. The Independent
Evaluator shall provide comments within 55 days after the filing of the Application.
The Soliciting Utilty shall file reply comments within 65 days after the filing of the
Application.
(b) An Approved Solicitation and related documents shall be posted on an
appropriate website as determined by the Commission order approving the
Solicitation. Notice of the website posting of a Solicitation shall be sent to the
potential bidders identified by the Soliciting Utility and as otherwse directed by the
Commission.
(c) All material modifications to the terms and schedule of the Approved
Solicitation must be approved by the Commission.
RZ4~:4~O..3,.SQHçUal¡Qri .ergçe~~,
(1) General Requirements of a Solicitation Process.
(a) All aspects of a Solicitation and Solicitation Process must be fair, reasonable
and in the public interest.
(b) A proposed Solicitation and Solicitation Process must be reasonably designed
to:
(i) Comply with all applicable requirements ofthe Act and Commission rules;
(ii) Be in the public interest taking into consideration:
(A) whether they are reasonably designed to lead to the acquisition, production,
and delivery of electricity at the lowest reasonable cost to the retail customers of the
Soliciting Utilty located in this state;
(B) long-term and short-term impacts;
(C) risk;
http://www.rules.utah.gov/publicatJcode/r746/r746-420.htm 1113/2010
UT Admin Code R746-420. Requests for Approval of a Solicitation Process. September 1.. Page 3 of 13
(D) reliabilty;
(E) financial impacts on the Soliciting Utilty; and
(F) other factors determined by the Commission to be relevant;
(ii) Be suffciently flexible to permit the evaluation and selection of those
resources or combination of resources determined by the Commission to be in the
public interest;
(iv) Be designed to solicit a robust set of bids to the extent practicable; and
(v) Be commenced suffciently in advance of the time of the projected resource
need to permit and faciltate compliance with the Act and the Commission rules and
a reasonable evaluation of resource options that can be available to fill the projected
need and that will satisfy the criteria contained within Section 54-17-302(3)(c). The
utilty may request an expedited review of the proposed Solicitation and Solicitation
Process if changed circumstances or new information require a different acquisition
timeline. The Soliciting Utility must demonstrate to the Commission that the timing
of the Solicitation Process will neverteless satisfy the criteria established in the Act
and in Commission rules.
(2) Screening Criteria - Screening in A Solicitation Process.
(a) In preparing a Solicitation and in evaluating bids, the Soliciting Utility shall
develop and utilze, in consultation with the Independent Evaluator (if then under
contract) and the Division of Public Utilities, screening and evaluation criteria,
ranking factors and evaluation methodologies that are reasonably designed to ensure
that the Solicitation Process is fair, reasonable and in the public interest.
(b) Reasonable initial screening criteria may include, but are not necessarily
limited to, reasonable and nondiscriminatory evaluation of and initial rankings
based upon the following factors:
(i) Cost to utilty ratepayers;
(ii) Timing of deliveries;
(iii) Point of delivery;
(iv) Dispatchabilty ¡flexibilty;
(v) Credit requirements;
(vi) Level of change to pro forma contract included in an approved Solicitation
Process;
(vii) Transmission, Interconnection and Integration costs and benefits;
(viii) Commission-approved consideration of impacts of direct or inferred debt;
(ix) Feasibilty, including project timing and the process for obtaining necessary
rights and permits;
(x) Adequacy and flexibilty of fuel supplies;
(xi) Choice of cooling technology and adequacy of water resources;
(xii) Systemwide benefits of transmission infrastructure investments associated
with a project;
(xii) Allocation of project development risks, including capital cost overrns, fuel
price risk and environmental regulatory risk among project developer, utility and
ratepayers; and
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(xiv) Environmental impacts.
(c) In developing the initial screening and evaluation criteria, the Soliciting
Utilty, in consultation with the Independent Evaluator (if then under contract) and
the Division of Public Utilties, shall consider the assumptions included in the
Soliciting Utilty's most recent Integrated Resource Plan (IRP), any recently fied IRP
Update, any Commission order on the IRP or IRP Update and in its Benchmark
Option.
(d) TheSoliciting Utility may but is not required to consider non-conforming bids
to the Request For Qualifications (RFQ) or Request For Proposals (RFP). The
Soliciting Utilty win provide advance notice to the Independent Evaluator of its
decision consider a non-conforming bid.
(3) Screening Criteria - Request for Qualifications and Request of Proposals.
(a) Prior to the deadline for responding to the RFP, the Soliciting Utilty may
utilze a RFQ.
(b) The Independent Evaluator win provide each of the bidders with a Bid
number once the Soliciting Utility, in consultation with the Independent Evaluator,
has determined that the bidder has met the criteria under the RFQ.
(c) Reasonable RFQ screening criteria may include, but are not necessarily
limited to, reasonable and nondiscriminatory evaluation of the following factors:
(i) Credit requirements and risk;
(ii) Non-performance risk;
(iii) Technical experience;
(iv) Technical and financial feasibilty; and
(v) Other reasonable screening criteria that are applied in a fair, reasonable and
nondiscriminatory manner.
(d) The RFQ should instruct each potential bidder to state in its RFQ response
whether it is an affliate of the Soliciting Utilty or win contract with an affliate of the
Soliciting Utilty.
(4) Disclosures. If a Solicitation includes a Benchmark Option, the Solicitation
shall include at least the following information and disclosures:
(a) Whether the Benchmark Option wil or may consist of a Soliciting Utility self-
build or owned option (Owed Benchmark Resource) or if it is a purchase option
(Market Benchmark Resource);
(b) If an Owed Benchmark Option is used, a description of the facilty, fuel tye,
technology, effciency, location, projected life, transmission requirements and
operating and dispatch characteristics of the Owned Benchmark Option. If a Market
Benchmark Option is used, the Soliciting Utilty must disclose that a market option
will be utilzed and any inputs that will be utilzed in the evaluation;
(c) A description and examples of the manner in which resources of differing
characteristics or lengths will be evaluated;
(d) That bids will receive Bid numbers from the Independent Evaluator. The
blinded personnel will not have access to any information concerning the
relationship between the Bid numbers and the Blinded bids until after selection of
the final short list;
(e) Assurances that resource evaluations win be conducted in a fair and non-
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preferential manner in comparison to the Benchmark Option;
(f) Assurances that the Benchmark Option will be validated by the Independent
Evaluator and that no changes to any aspect of the Benchmark Option will be
permitted after the validation of the Benchmark Option by the Independent
Evaluator and prior to the receipt of bids under the RFP and that the Benchmark
Option will not be subject to change unless updates to other bids are permitted; and
(g) Assurances that the non-blinded personnel will not share any non-blinded
information about the bidders with employees or agents of a Soliciting Utility or its
afliates who are or may be involved in the development of a Solicitation, the
evaluation of bids, or the selections of resources (Evaluation Team) until after
selection of the final shortist.
(5) Disclosures Regarding Evaluation Methodology. A Solicitation shal include a
clear and complete description and explanation of the methodologies to be used in
the evaluation and ranking of bids, including a complete description of:
(a) All evaluation procedures, factors and weights to be considered in the RFQ,
initial screening and final evaluation of bids;
(b) Credit and security requirements;
(c) Pro forma power purchase and other agreements; and
(d) The Solicitation schedule.
(6) Disclosures Regarding Independent Evaluator. The Solicitation shall describe
the Independent Evaluator's role in a manner consistent with Section 54-17-203,
including:
(a) An explanation of the role of the Independent Evaluator;
(b) Contact information for the Independent Evaluator; and
(c) Directions and encouragement for potential bidders to contact the
Independent Evaluator with any questions, comments, information or suggestions.
(7) General Requirements. The Solicitation Process must:
(a) Satisfy all applicable requirements of the Act and Commission rules and be
fair, reasonable and in the public interest;
(b) Clearly describe the nature and all relevant attributes of the requested
resources;
(c) Include clear descriptions ofthe amounts aIld tyes of resources requested,
the required timing of deliveries, acceptable places of delivery, pricing options,
transmission constraints, requirements and costs that are known at the time,
scheduling requirements, qualification requirements, bid and selection formats and
procedures, price and non-price factors and weights, credit and security
requirements and all other information reasonably necessary to faciltate a
Solicitation Process in compliance with the Act and Commission rules;
(d) Utilze an evaluation methodology for resources of different tyes and lengths
which is fair, reasonable and in the public interest and which is validated by the
Independent Evaluator;
(e) Ensure that bidders wil timely receive the data and information determined
by the Soliciting Utilty, in consultation with the Independent Evaluator or as
directed by the Commission, to be necessary to faciltate a fair and reasonable
competitive bidding process and all information reasonably requested by bidders;
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(t) Impose credit requirements and other partcipation and bidding requirements
that are non- discriminatory, fair, reasonable, and in the public interest;
(g) Permit a range of commercially reasonable alternatives to satisfy credit and
security requirements;
(h) Permit and encourage negotiation with final short-list bidders for the beneft
of ratepayers taking into account increased value but also not unreasonably
increasing risks to ratepayers;
(i) Provide reasonable protections for confidential information of bidders; subject
to disclosure pursuant to appropriate protective order to the Independent Evaluator
and otherwse as required by the Commission;
(j) Provide reasonable protections for confidential information of the SolicitingUtilty, subject to disclosure pursuant to appropriate protective order to the
Independent Evaluator and otherwse as required by the Commission;
(k) Ensure that if any information that may afect the Solicitation Process is to be
shared by the Soliciting Utilty with any bidder or with the employees or agents of a
Soliciting Utilty or its affliates who may be involved in the development or
submission of a Benchmark Option used in a Solicitation (Bid Team), excluding
confidential, proprietary or competitively sensitive Benchmark- or bid-specific
information or negotiations, that the same information is shared with all bidders in
the same manner and at the same time.
(8) Process Requirements for Benchmark Option. In a Solicitation Process
involving the possibilty of a Benchmark Option:
(a) The Evaluation Team, including non-blinded personnel, may not be members
of the Bid Team, nor communicate with members of the Bid Team during the
Solicitation Process about any aspect of the Solicitation Process, except as authorized
herein.
(b) The names and titles of each member of the Bid Team, the non-blinded
personnel and Evaluation Team shall be provided in wrting to the Independent
Evaluator.
(c) The Evaluation Team may solicit wrtten comments on matters of technical
expertse from the members of the Bid Team. All such communications to or from
the Bid Team must be in writing. The Independent Evaluator must partcipate in all
such communications between members of the Bid Team and Evaluation Team and
must retain a copy of all such correspondence to be made available in future
Commission proceedings. The Independent Evaluator must also make available to
the bidder about whose bid the Bid Team's technical expertise was sought a wrtten
copy of the correspondence between the Evaluation and Bid Teams. Any response to
such correspondence from the bidder must be in wrting to the Independent
Evaluator and must be conveyed to the Evaluation Team. The Independent Evaluator
must provide its own or third part verification of the reasonableness of any .
technical information solicited from the Bid Team or bidder before it may be used in
any evaluation.
(d) There shall be no communications regarding blinded bid information, either
directly or indirectly, between the non-blinded personnel and other Evaluation Team
members until the final shortlist is determined except as authorized herein, which
communications shall be done in the presence of the Independent Evaluator. The
non- blinded personnel must not reveal to other Evaluation Team members, either
directly or indirectly in any form, any blinded information regarding the identity of
any of the bidders.
(e) The Evaluation Team shall have no direct or indirect contact or
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communication with any bidder other than through the Independent Evaluator
until such time as a final shortlist is selected by the Soliciting Utilty.
(t) Each member of the Bid Team and Evaluation Team, including non-blinded
personnel, shall promptly execute a commitment and acknowledgment that he or she
agrees to abide by all of the restrictions and conditions contained in these
Commission rules. These acknowledgments shall be fied with the Commission
within 10 days of their execution.
(g) Should any bidder or a member of the Bid Team attempt to contact a member
of the Evaluation Team, such bidder or member of the Bid Team shall be directed to
the Independent Evaluator for al information and such communication shall be
reported to the Independent Evaluator by the Evaluation Team within seven
business days.
(h) All relevant costs and characteristics of the Benchmark Option must be
audited and validated by the Independent Evaluator prior to receiving any of the bids
and are not subject to change during the Solicitation except as provided herein.
(i) All bids must be considered and evaluated against the Benchmark Option on a
fair and comparable basis.
G) Environmental risks and weight factors must be applied consistently and
comparably to all bid responses and the Benchmark Option.
(k) The Solicitation must allow power purchase contract terms equivalent to the
projected facilty life of the Benchmark Option. The Commission may waive this
requirement during review of the draft Solicitation and Solicitation Process for good
cause shown.
(I) If the Soliciting Utility is subject to regulation in more than one state
concerning the acquisition, construction, or cost recovery of a significant energy
resource, the Soliciting Utilty shall explain the degree to which it has taken into
account the likelihood of resource approval and cost recovery in other jurisdictions
in exercising its judgment in selectng the Benchmark Option.
(9) Issuance of A Solicitation.
(a) The Soliciting Utilty shall issue the approved Solicitation promptly after
Commission approval of the Solicitation and Solicitation Process.
(b) Bidders shall be directed to submit bids directly to the Independent Evaluator
in accordance with the schedule contained in the Solicitation.
(c) The Soliciting Utilty shall hold a pre-Bid conference in Utah, with both in-
person and conference call paricipation available, at least 30 days before the
deadline for submitting responsive bids.
(10) Evaluation of Bids.
(a) The Independent Evaluator shall "blind" all bids and supply blinded bids to
the Soliciting Utilty and make blinded bids available to the Division of Public
Utilties subject to the proviions of an appropriate Commission-issued protective
order.
(b) The Independent Evaluator shall supply such information regarding bidders
and bids to non~blinded personnel as is necessary to enable such personnel to
complete required credit and legal evaluations.
(c) The Soliciting Utilty must cooperate fully with the Independent Evaluator.
(d) Subject to an appropriate confidentiality agreement approved by the
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Commission, the Soliciting Utilty shall timely provide to the Independent
Evaluator and the Division of Public Utilities full access to all relevant personnel of
the Soliciting Utilty, together with all data, materials, models and other information,
including confidential information and forward pricing curves, used or to be used in
developing the proposed Solicitation, preparing the Benchmark Option, or screening,
evaluating or selecting bids.
(e) The Soliciting Utility, monitored by the Independent Evaluator, shall conduct
a thorough evaluation of all bids in a manner consistent with the Act, Commission
Rules and the Solicitation.
(t) The Independent Evaluator shall pursue a reasonable combination of auditing
the Soliciting Utilty's evaluation and conducting its own independent evaluation, in
consultation with the Division of Public Utilties, such that the Independent
Evaluator can fulfill its duties and obligations as set fort in the Act and in
Commission Rules.
(g) The Soliciting Utilty, the Division of Public Utilities and the Independent
Evaluator may request further information from any bidder. Any communications
with bidders in this regard shall be conducted only through the Independent
Evaluator. The Soliciting Utilty shall be informed in a timely manner of the content
of any communications between the Independent Evaluator and a bidder, but
communications shall be conducted on a confidential or blinded basis.
(h) In order to faciltate both an independent evaluation function and an auditing
function, the Independent Evaluator shall have access to all information and
resources utilzed by the Soliciting Utility in conducting its analyses. The Soliciting
Utilty shall provide the Independent Evaluator with complete and open access to all
documents, information, data and models utilzed by the Soliciting Utilty in its
analyses. The Independent Evaluator shall be allowed to actively and
contemporaneously monitor all aspects of the Soliciting Utilty's evaluation process
in the manner it deems appropriate so that the Soliciting Utilty's evaluation process
is transparent to the Independent Evaluator. The Soliciting Utilty shall have an
affrmative responsibilty to respond promptly and fully to any request for
reasonable access or information made by the Division of Public Utilties or the
Independent Evaluator. To the extent the Independent Evaluator determines
through its audit or independent evaluation that its evaluation and the Soliciting
Utilty's yield different results, the Independent Evaluator shall notify the Soliciting
Utilty and the Division of Public Utilties and attempt to identify reasons for the
differences as early as practicable. Where practicable, the Soliciting Utility, the
Division of Public Utilities and the Independent Evaluator shall attempt to reconcile
such differences. If the differences cannot be reconciled to the Independent
Evaluator's satisfaction, the Independent Evaluator will promptly notify the
Commission.
(i) The Independent Evaluator shall be responsible for unblinding all bids
included on the final short-list and providing relevant contact information to the
Soliciting Utilty for final negotiations with these short- listed bidders. The
Independent Evaluator shall monitor any negotiations with short-listed bidders.
(j) The Division of Public Utilties and the Independent Evaluator may, through
the Independent Evaluator, ask the PacifiCorp Transmission group to conduct
reasonable and necessary transmission analyses concerning bids received. Any such
analyses shall be provided to the Division of Public Utilities, the Independent
Evaluator and the Soliciting Utilty. The Soliciting Utilty may, in a general rate case
or other appropriate Commission proceeding, include and the Commission will
allow, recovery in the Soliciting Utility's retail rates of any reasonable amounts paid
by the Soliciting Utilty for those analyses.
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UT Admin Code R 746-420. Requests for Approval of a Solicitation Process. September 1.. Page 9 of 13
R146__4_20,,4-'QuaUfic:aUQ!Js J:lf1odep-'.lLdent EjfaluatQl-!
(1) An Independent Evaluator must:
(a) Demonstrate qualifications, expertise and experience to perform all of the
functions of the Independent Evaluator as contemplated by the Act and Commission
rues;
(b) Demonstrate independence from the Soliciting Utility and potential bidders
identified by the utilty or determined by the Commission;
(c) Be experienced and competent to facilitate necessary communications,
including operation and control of a website for all purposes contemplated by
Commission rules;
(d) Provide statements of interest to the Commission which disclose:
(i) any contracts or other economic arrangements of any kind between the
Soliciting Utilty or likely bidders and the Independent Evaluator or any affliates
that currently exist, that have existed within the past ten years, or that have been
promised or are expected in the future; and
(ii) memberships in trade organizations; and
(e) File with the Commission a full copy of any agreement of any tye between the
Independent Evaluator and the Soliciting Utilty or any likely bidder or any affliates.
(2) While performing servces related to the Solicitation, the Independent
Evaluator shall not accept employment from nor communicate with bidders and the
Soliciting Utilty regarding future employment or contract opportnities.
RZ46,,_42ll:oS.P_~ynientS__tQjldeR~tlJj:llnt_l;y_lll.JtOr.
(1) Payments to the Independent Evaluator selected by the Commission shall be
paid by the Soliciting Utility in accordance with terms and conditions specified by
the Commission.
(a) The Commission and the Independent Evaluator shall execute a contract
approved by the Commission with such terms and conditions as the Commission
may approve.
(b) Invoices for the Independent Evaluator's servces shall be sent as directed by
contract.
(c) Afer an invoice is reviewed and approved, it will be forwrded to the
Soliciting Utilty for payment to the Independent Evaluator.
(d) Unless the Commission directs otheIWse in connection with a Solicitation,
the expenses of the Independent Evaluator shall be reimbursed as follows:
(i) The Soliciting Utilty is authorized to collect bid fees that are reasonable. under
the circumstances of up to $10,000 per bid to defray costs of the Independent
Evaluator; and
(ii) The Soliciting Utilty may, in a general rate case or other appropriate
Commission proceeding, include and the Commission will allow, recovery in the
Soliciting Utilty's retail rates of any additional amounts paid by the Soliciting Utility
for the Independent Evaluator.
R746-420-6. Functions of Independent Evaluator.
(1) The Independent Evaluator shall peiform all functions contemplated by the
Act or Commission rules, in coordination with and under the contract with the
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UT Admin Code R 746-420. Requests for Approval of a Solicitation Process. Septembe... Page 10 of 13
Commission.
(2) The functions of the Independent Evaluator shal include the following:
(a) Faciltate and monitor communications between the Soliciting Utility and
bidders;
(b) Review and validate the assumptions and calculations of any Benchmark
Option;
(c) Analyze the Benchmark Option for reasonableness and consistency with the
Solicitation Process;
(d) Analyze, operate and validate all important models, modeling techniques,
assumptions and inputs utilzed by the Soliciting Utilty in the Solicitation Process,
including the evaluation of bids;
(e) Receive and "blind" bid responses;
(0 Provide input to the Soliciting Utility on:
(i) the development of screening and evaluation criteria, rankng factors and
evaluation methodologies that are reasonably designed to ensure that the Solicitation
Process is fair, reasonable and in the public interest in preparing a Solicitation and in
evaluating bids;
(ii) the development of initial screening and evaluation criteria that take into
consideration the assumptions included in the Soliciting Utilty's most recent IRP,
any recently fied IRP Update, any Commission order on the IRP or IRP Update and
in its Benchmark Option;
(iii) whether a bidder has met the criteria specified in any RFQ and whether to
reject or accept non- conforming RFQ responses;
(iv) whether and when data and information should be distributed to bidders
because it is necessary to faciltate a fair and reasonable competitive bidding process
or has been reasonably requested by bidders;
(v) negotiation of proposed contracts with successful bidders; and
(vi) other matters as appropriate in performing the duties of the Independent
Evaluator under the Act and Commission rules, or as directed by the Commission;
(g) Ensure that all bids are treated in a fair and non-discriminatory manner;
(h) Monitor, observe, validate and offer feedback to the Soliciting Utilty, the
Commission, and the Division of Public Utilties on all aspects of the Solicitation and
Solicitation Process, including:
(i) content of the Solicitation;
(ii) evaluation and ranking of bid responses;
(iii) creation of a short list(s) of bidders for more detailed analysis and
negotiation;
(iv) post-Bid discussions and negotiations with, and evaluations of, short list
bidders; and
(v) negotiation of proposed contracts with successful bidders;
(i) Offer feedback to the Soliciting Utilty on possible adjustments to the scope or
nature of the Solicitation or requested resources in light of bid responses;
(j) Solicit additional information on bids necessary for screening and evaluation
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UT Admin Code R746-420. Requests for Approval of a Solicitation Process. Septembe... Page i i of i 3
purposes;
(k) Advise the Commission at all stages of the process of any unresolved disputes
or other issues or concerns that could affect the integrity or outcome of the
Solicitation Process;
(I) Analyze and attempt to mediate disputes that arise in the Solicitation Process
with the Soliciting Utility and/or bidders, and present recommendations for
resolution of unresolved disputes to the Commission;
(m) Partcipate in and testify at Commission hearings on approval of the
Solicitation and Solicitation Process and/or approval of a Significant Energy
Resource Decision;
(n) Coordinate as appropriate and as directed by the Commission with staff or
evaluators designated by regulatory authorities from other states served by the
Soliciting Utilty;
(0) Perform such other evaluations and tasks as the Commission may direct;
(p) At the request of the Commission and subject to the existence or negotiation
of appropriate contractual arrangements, partcipate in the evaluation of a request
for an Order to Proceed under Section 54-17-304 and testify at any Commission
hearings regarding the same; and
(q) No part or provision of this rule shall prevent or preclude the Commission
from removing or dispensing with any functon, responsibilty, servce or task of the
Independent Evaluator in a particular case or proceeding as the Commission may
determine is appropriate in the circumstances of such case or proceeding.
(3) Communications
(a) Communications between a Soliciting Utility and potential or actual bidders
shall be conducted only through or in the presence of the Independent Evaluator.
Bidder questions and Soliciting Utilty or Independent Evaluator responses shall be
posted on an appropriate website. The Independent Evaluator shall protect or redact
competitively sensitive information from such questions or responses to the extent
necessary.
(b) The Soliciting Utility may not communicate with any bidder regarding the
Solicitation Process, the content of the Solicitation or Solicitation documents, or the
substance of any potential response by a bidder to the Solicitation, except through or
in the presence ofthe Independent Evaluator.
(c) The Soliciting Utility shall provide timely and accurate responses to any
request from the Independent Evaluator, including requests from bidders submitted
by the Independent Evaluator, for information regarding any aspect of the
Solicitation or the Solicitation Process.
(4) Reports
(a) The Independent Evaluator shall prepare at least the following confidential
report and provide them to the Commission, the Diviion of Public Utilties and the
Soliciting Utilty:
(i) Monthly progress report on all aspects of the Solicitation Process as it
progresses;
(ii) Final Reports as soon as possible following the completion of the Solicitation
Process. Final reports shall include analyses of the Solicitation, the Solicitation
Process, the Soliciting Utilty's evaluation and selection of bids and resources, the
final results and whether the selected resources are in the public interest;
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(ii) Oter report the Independent Evaluator deems appropriate; and
(iv) Other reports as the Commission may direct.
(b) The Independent Evaluator shal prepare at least the following public report
and provide them to the Commission and all Interested Partes:
(i) Final report, without confidential information, analying the Solicitation, the
Solicitation Process, the Soliciting Utilty's evaluation and selection of bids and
resources, the final results and whether the selected resources are in the public
interest;
(ii) Comments and recommendations with respect to changes or improvements
for a future Solicitation Process; and
(iii) Oter report as the Commission may direct.
(c) Upon advance notice to the Soliciting Utility, the Independent Evaluator may
conduct meetings with intervenors during the Solicitation Process to the extent
determined by the Independent Evaluator or as directed by the Commission.
(d) If at any time the Independent Evaluator becomes aware of any violation of
any requirements of the Solicitation Process or Commission rules, the Independent
Evaluator shall immediately notify the Soliciting Utility and the Commission. The
Independent Evaluator shall report any actons taken by the Soliciting Utilty and
any other recommended remedies to the Commission.
(e) The Independent Evaluator shall document all substantive correspondence
and communications with the Soliciting Utility and bidders, shall make such
documentation available to partes in any relevant proceedings upon proper request
and subject to the terms of a protective order if the request contains or pertains to
confidential information. Within six months after the end of the Solicitation Process,
the Independent Evaluator shall provide a copy of this documentation to the
Soliciting Utilty. The Soliciting Utilty shall maintain a complete record of its
analyses and evaluations, including spreadsheets and models materially relied upon
by the utilty, all materials submitted to the Commission and all materials submitted
in response to discovery requests. The Soliciting Utilty shall retain such
documentation for a period of at least 10 years. A part to a proceeding may petition
the Commission to require specified additional materials to be maintained for a
specified period.
KE)'
significant energy resource, solicitation process, order to proceed, filing requirements
Date of Enactment or Last Substantive Amendment
August 28, 2007
AYlhoriiio9J.JmplemenledJ....o.rJnlerpreled....La:w
54-17-100 et seq.
Rule converted into HTML by the Division of Administrative Rules.
For questions regarding the content or application of rules under Title R746, please
contact the promulgating agency (Public Service Commission, Administration). A list of
agencies with links to their homepages is available at
htlP.;LLWl.l.J¡;b.,9QYlgQyeJnm_enU~eDl4USl' htmJ or from
http://ww.rules.utah.gov/contactJagencycontacts.htm .
For questions about the rulemaking process, please contact the Division of
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DT Admin Code R 746-420. Requests for Approval of a Solicitation Process. Septembe... Page 13 of 13
Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules
is not able to answer questions about the content or application of these rules.
The HTML version of this rule is a convenience copy made available on the Internet as
a public service. Please see the State of Utah Ienns_øfJls_e.
2010 ~ Division of Administrative Rules
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