1 LONG ISLAND PSEG LONG ISLAND LONG ISLAND 2015 Renewable RFP WebEx JANUARY 20, 2016

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PSEG LONG ISLAND

LONGISLAND

2015 Renewable RFP WebEx

J A N U A R Y 2 0 , 2 0 1 6

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Session is being recorded

Agenda• PSEG Long Island Team Introductions• Disclaimer• 2015 Renewable RFP Background and Goals• Selected RFP Discussion Topics– Communications– Product Definition– Contract– Pricing– Submittal Fees– Evaluation Process– Post-selection Process– Other

• Keys to a Successful Proposal• Schedule

2015 Renewable RFP WebEx – January 20, 2016

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Session is being recordedPSEG Long Island Team Introductions

• James Parmelee, Senior Manager of Power Resources and Contracts

• Ed Petrocelli, Manager of Power Projects

• Steve Cantore, Manager of Power Asset Management

• Lucyna Khazanovich, Manager of Fuel and Power Planning

• Susan Manessis, Engineer - Transmission Planning

• Robert Binder, Engineer – Efficiency and Renewables Planning and Evaluation


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Session is being recordedDisclaimer

This WebEx is being conducted for informational purposes only and information, data, or comments provided by PSEG Long Island during the WebEx are not to be construed as altering, modifying or replacing the requirements or contents of the 2015 Renewable RFP. PSEG Long Island’s agreement to make material or non-material changes to the RFP arising from WebEx discussions should not be considered binding unless and until such changes appear in an addendum to the RFP. RFP Respondents are encouraged to carefully read and adhere to the Proposal requirements as articulated in the RFP and in written addendums thereto.


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Session is being recorded2015 Renewable RFP Background and Goals

• By resolution dated October 25, 2012, the LIPA Board of Trustees authorized a plan to add 400 MW of new renewable energy generation to its resource portfolio through:

– An expanded feed-in-tariff program and– A competitive procurement

• In 2013 and 2014, this plan was implemented through the issuance of the Clean Solar Initiative II, the Clean Renewable Energy Initiative and the 280 MW RFP

– These procurements achieved a portion of the 400 MW goal• It is now anticipated that approximately 210 MW of

additional renewable capacity will be required to meet the goal

– However, more than 210 MW may be required if some of the projects from the 2013-2014 initiatives do not come to fruition


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Session is being recorded2015 Renewable RFP Background and Goals (con’t)

• To fill the gap, three procurement initiatives are planned. Responses to all three procurements are anticipated to be evaluated concurrently–Part 1 - 2015 Renewable RFP - Open to any renewable

resource 1 MW or larger using one point of interconnection and offering a fixed price–Part 2 - Fuel Cell Feed-in Tariff - The proposed tariff language

is targeted for release for public comment during the 1st quarter of 2016. Solicitation will be for up to 40 MWs–Part 3 - Commercial Solar Feed-in Tariff - The proposed tariff

language is targeted for release for public comment during the 1st quarter of 2016. This solicitation is targeted to rooftop solar and carport solar projects greater than 200 kw but less than 1 MW in size. Up to 20 MW of projects may be selected

• Renewable resources selected from the South Fork RFP and the soon-to-be issued Western Nassau RFP may also help fill the gap


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Session is being recordedSelected RFP Discussion Topics: Communications

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

• All questions and clarifications unrelated to interconnection inquiries concerning the RFP Documents may be electronically submitted through the RFP website at http://www.pseglirenrfp.com/QandA.html. – Answers along with the questions will be available on an

anonymous basis to all registered users. – The request for proprietary treatment will be evaluated and

dispositioned by the Company.

• Prior to any interconnection inquiries or discussions a non-disclosure agreement must be executed between Respondent and PSEG Long Island. The NDA is located on the RFP website.

• PSEG Long Island contact information is provided in the RFP.2015 Renewable RFP WebEx – January 20, 2016

http://www.pseglirenrfp.com/QandA.html

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Session is being recordedSelected RFP Discussion Topics: Product Definition

• Technology must produce electric power for injection into Long Island electric system from new “renewable” energy sources– Technology must be proven and commercially available– Applicable renewable energy sources include:• Solar, on and offshore wind, hydropower, tidal, and geothermal resources• Fuel cells that use 100% renewable energy sources and offer a fixed price

(All other fuel cells should apply to the Fuel Cell Feed-in Tariff)• Direct-fired generators using a biomass fuel• Storage systems paired with the above renewable technologies provided

that the associated energy is delivered to the same interconnection point• Projects must be > 1 MW (AC measured at the revenue meter)

and newly constructed (a COD on or after the date of contract execution)

• Projects may be located off of Long Island– Power must be delivered via a new dedicated transmission line– Current and future costs associated with firm transmission and

transmission upgrades for all systems other than Long Island electric system borne by Respondent2015 Renewable RFP WebEx – January 20,

2016

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Session is being recordedSelected RFP Discussion Topics: Contract

• Long term PPA with proposed term of 10-30 years (5-year increments)– Standard form PPA with options for different resource types

will be available on the RFP website– Each Proposal shall provide a “red-line” mark-up to the form

of PPA with any comments, insertions, deletions, or other proposed changes, which must include proposed text, as applicable. Alternatively, the proposer may accept the terms and conditions of the PPA.

• Bids will only be accepted that offer a bundled product of electric energy, environmental attributes (RECs), and capacity


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Session is being recordedSelected RFP Discussion Topics: Pricing

• All proposed contract pricing must be firm and all terms and conditions must be open for acceptance through May 1, 2018

• Respondents must offer a PPA with a flat Base Energy price (as described in section 6.11.1 of the RFP) for contract term with option to extend at reduced price

• In addition, Respondents must offer one or both of the following options– PPA with a flat Base Energy price with option to purchase at end of

term. The price will be the fair market value of the Project at the time the option is exercised, as agreed upon by the parties

– PPA with a flat Base Energy price with option to purchase after 6 years. The price will be the fair market value of the project at the time the option is exercised, as agreed upon by the parties

• Purchase Option - If the Project owner decides to sell the Project at any time during the contract term, LIPA will be given right of first refusal to purchase the facility at the same price offered from the presumed purchaser2015 Renewable RFP WebEx – January 20,

2016

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Session is being recordedSelected RFP Discussion Topics: Pricing (con’t)

• Respondents will provide a price that will be paid for Base Energy (energy produced in all hours)– Production is encouraged on weekdays from 2 to 6 pm. A separate

additional payment for Peak Energy will be paid during these peak hours

• Respondents proposing Projects affected by future PTC or ITC modifications must: – Provide pricing that assumes the PTC and ITC rules in effect as of

April 15, 2016– Provide alternative pricing that assumes the PTC or ITC is

extended – In the event the PTC or ITC is extended or modified, Respondents

shall pass through these benefits to PSEG Long Island


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Session is being recordedSelected RFP Discussion Topics: Submittal Fees

• Submittal fee - $1/kW per Proposal– Respondents who submit more than one Proposal for the

same interconnection point or project site must pay a separate fee for each Proposal

– Submittal fees will be returned if Proposals are • Not submitted in timely manner• Incomplete or non-responsive• Not selected and approved by the Trustees• Proposal fees will be returned in a timely manner shortly after

the completion of each evaluation phase described in Section 7.1.6 and no interest will be paid on refunded amounts


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Session is being recordedSelected RFP Discussion Topics: Submittal Fees (con’t)

• Unrecovered Proposal evaluation costs will be recovered from Respondents with executed contracts via lump sum payments at the start of each contract

― Payments associated with individual contracts will be in proportion to the MW size of the contract relative to the total MWs procured via the RFP

• Each Project contract will be allowed an adder for the first five years of the contract to recover the lump sum payment

― The adder will be calculated as a lump sum payment divided by the projected MWh of the unit’s output over the 5-year period. Once the projected amount of energy has been produced, payment for the adder will cease


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Session is being recordedSelected RFP Discussion Topics: Evaluation Process

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

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

– Phase 2: Consists of an initial qualitative review of all of the criteria in the RFP as well as a levelized cost analysis of each individual proposal or proposal option.

– Phase 3: Consists of all-in cost quantitative analysis, enhanced qualitative analysis and cost of system upgrades for portfolios of projects.

• Those proposals that are found to be superior in Phase III are submitted to the LIPA Board of Trustees as PSEG Long Island’s suggestions for proposals that should proceed to contract negotiations


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Session is being recordedSelected RFP Discussion Topics: Post-Selection Process

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

• Negotiated PPAs shall not be binding until approved by LIPA’s Board of Trustees, the NY State Attorney General and the NY State Comptroller

• Contracts may not be executed until the LIPA Board of Trustees authorizes execution– For projects requiring SEQRA approval, Trustees may not vote to

authorize execution until such approval has been received and documented

– For projects subject to Article 10 of the New York Public Service Law, under the jurisdiction of the New York State Board on Electric Generation Siting and the Environment, a condition precedent to the PPA becoming effective is that the Respondent must receive a certificate of environmental compatibility and public need.


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Session is being recordedSelected RFP Discussion Topics: Other

• LIPA is not offering property for sale or use for any project with the exception of substation property that is required for the interconnection of those projects in accordance with the LGIP or the SGIP.

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

• A link to a list of County/Town/City officials’ titles and names will be provided on the RFP website to facilitate communication between municipalities and Proposers.


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Session is being recordedKeys to a Successful Proposal

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

• Proposal delivered with required submittal fee as a certified check or bank check made payable to PSEG Long Island

• All required documents and forms supplied with proposal

• No material changes after submittal of the proposal

• Firm pricing through May 1, 2018

• Prompt response to clarifying questions posed by PSEG Long Island

• Initial power delivery must be no later than May 1, 2022


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Session is being recordedKeys to Successful Proposal (con’t)

• Community acceptance – Documented evidence of local outreach and support from the local

community, including elected officials and civic groups– Required permits in hand or demonstration with a reasonable degree

of confidence that such permits can be obtained

• Competitively priced• Experienced team– Respondent has demonstrated experience in developing projects of

similar size, technology and scope

• Ability to implement


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Session is being recordedSchedule

ACTIVITY DATERelease of RFP December 22, 2015Question Submittal Deadline May 4, 2016Notice of Intent to Bid Deadline May 18, 2016Proposal Submittal Deadline June 1, 2016, 3 PM EDTProposal Selection(s) (planned) January, 2017

Execution of Contract(s) (planned) 3rd and 4th Quarter of 20171

Firm Pricing Required Through May 1, 2018Latest COD2 May 1, 20223

1 If required, SEQRA must be completed prior to contract execution. 2 Staggered startup will be allowed to occur in blocks no smaller than 25% of

Project size with a minimum of 1 month between block startup with total Project capacity installed within two years. Power delivery from the first block shall be no later than May 1, 2022.

3 First of the month CODs are required.2015 Renewable RFP WebEx – January 20, 2016