Request for Propo

For: Consulting Se Consulting Se

Event

Bidder’s Electronic Question Due D(Refer to RFP Section 1.3.1 for more informatio

Mandatory Pre-bid Conference

Mandatory Site Visit

Bid Submission Due Date (Refer to RFP Section 1.3.2 for more informatio

Dates are subject to change. All changesDivision of Purchase and Property websi

Small Business Set-Aside

(Refer to RFP Section 4.4.2.2 for more information.)

Not

Ent

Part

Sub

RFP Issued By State of New Jersey Department of the Treasury Division of Purchase and Property Trenton, New Jersey 08625-0230 Date: August 29, 2006

sal 07-x-38787

rvices: Energy rvices

Date Time

ate n.)

September 8, 2006 5:00 PM

N/A N/A

N/A

N/A

n.) October 6, 2006 2:00 PM

will be reflected in Addenda to the RFP posted on the te.

Status Applicable

ire Contract

ial Contract

contracting Only

Category I

II

III

Using Agency

State of New Jersey Department of the Treasury Division of Administration Trenton, New Jersey 08625-0230

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Table of Contents

NOTICE TO BIDDERS ......................................................................................................................................................................... 5 1.0 INFORMATION FOR BIDDERS..................................................................................................................................................... 6

1.1 PURPOSE AND INTENT .......................................................................................................................................................... 6 1.2 BACKGROUND......................................................................................................................................................................... 6

1.2.1 NJCESP PARTICIPANT / INTERESTED PARTIES ......................................................................................................... 7 1.3 KEY EVENTS ............................................................................................................................................................................ 7

1.3.1 ELECTRONIC QUESTION AND ANSWER PERIOD ....................................................................................................... 7 1.3.2 SUBMISSION OF BID PROPOSAL.................................................................................................................................. 8

1.4 ADDITIONAL INFORMATION................................................................................................................................................... 8 1.4.1 ADDENDA: REVISIONS TO THIS RFP............................................................................................................................ 8 1.4.2 BIDDER RESPONSIBILITY .............................................................................................................................................. 8 1.4.3 COST LIABILITY............................................................................................................................................................... 9 1.4.4 CONTENTS OF BID PROPOSAL..................................................................................................................................... 9 1.4.5 BID OPENING................................................................................................................................................................... 9 1.4.6 PRICE ALTERATION........................................................................................................................................................ 9 1.4.7 JOINT VENTURE.............................................................................................................................................................. 9

2.0 DEFINITIONS ............................................................................................................................................................................... 10 2.1 GENERAL DEFINITIONS........................................................................................................................................................ 10 2.2 CONTRACT SPECIFIC DEFINITIONS ................................................................................................................................... 12

3.0 SCOPE OF WORK....................................................................................................................................................................... 44 3.1 ADVISING AND ASSISTING THE STATE IN CONSOLIDATION ACTIVITIES...................................................................... 44 3.2 GENERAL SERVICES ............................................................................................................................................................ 44 3.3 FIRM AND INTERUPTIBLE NATURAL GAS CONSULTING SERVICES .............................................................................. 45

3.3.1 ADVISING THE STATE ON NATURAL GAS MARKET CONDITIONS.......................................................................... 45 3.3.2 ADVISING THE STATE ON NATURAL GAS DEMAND LOAD MANAGEMENT ........................................................... 45 3.3.3 ADVISING THE STATE ON PROCUREMENT STRATEGIES FOR NATURAL GAS SUPPLIES ................................. 46 3.3.4 COMPILING (SUPPLIER) NATURAL GAS LOAD DATA FROM NJCESP ACCOUNTS ............................................... 46

3.4 ELECTRICITY CONSULTING SERVICES ............................................................................................................................. 47 3.4.1 ADVISING THE STATE ON ELECTRONIC MARKET CONDITIONS ............................................................................ 47 3.4.2 ADVISING THE STATE ON ELECTRICITY DEMAND-SIDE MANAGEMENT............................................................... 48 3.4.3 ADVISING THE STATE ON PROCUREMENT STRATEGIES FOR ELECTRICITY SUPPLIES ................................... 48 3.4.4 ADVISING ON RENEWABLE ELECTRICITY SOURCES AND ENVIRONMENTAL CONCERNS................................ 49 3.4.5 COMPILING (SUPPLIER) ELECTRICITY LOAD DATA FROM NJCESP ACCOUNTS ................................................. 50

3.5 CONTRACT SINGLE POINT OF CONTACT .......................................................................................................................... 50 3.6 GENERAL CONTACT OPERATION....................................................................................................................................... 51 3.7 CONTRACTOR’S PROXIMITY TO TRENTON....................................................................................................................... 51

4.0 BID PROPOSAL PREPARATION AND SUBMISSION............................................................................................................... 52 4.1 GENERAL ............................................................................................................................................................................... 52 4.2 BID PROPOSAL DELIVERY AND IDENTIFICATION............................................................................................................. 52 4.3 NUMBER OF BID PROPOSAL COPIES................................................................................................................................. 52 4.4 BID PROPOSAL CONTENT ................................................................................................................................................... 52

4.4.1 FORMS THAT MUST BE SUBMITTED WITH BID PROPOSAL .................................................................................... 52 4.4.1.1 SIGNATORY PAGE................................................................................................................................................ 52 4.4.1.2 OWNERSHIP DISCLOSURE FORM...................................................................................................................... 52 4.4.1.3 DISCLOSURE OF INVESTIGATIONS/ACTIONS INVOLVING BIDDER ............................................................... 53 4.4.1.4 NOTICE OF INTENT TO SUBCONTRACT FORM................................................................................................. 53 4.4.1.5 SUBCONTRACTOR UTILIZATION FORM............................................................................................................. 53

4.4.2 PROOF OF REGISTRATIONS THAT MUST BE SUBMITTED WITH THE BID PROPOSAL........................................ 53 4.4.2.1 BUSINESS REGISTRATION CERTIFICATE FROM THE DIVISION OF REVENUE ............................................ 53 4.4.2.2 SMALL BUSINESS SET-ASIDE CONTRACTS...................................................................................................... 53

4.4.3 FORMS THAT MUST BE SUBMITTED BEFORE CONTRACT AWARD AND SHOULD BE SUBMITTED WITH THE BID PROPOSAL....................................................................................................................................................................... 53

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4.4.3.1 MACBRIDE PRINCIPLES CERTIFICATION .......................................................................................................... 53 4.4.3.2 AFFIRMATIVE ACTION.......................................................................................................................................... 54 4.4.3.3 SERVICES SOURCE DISCLOSURE FORM.......................................................................................................... 54

4.4.4 TECHNICAL PROPOSAL ............................................................................................................................................... 54 4.4.4.1 MANAGEMENT OVERVIEW.................................................................................................................................. 54 4.4.4.2 CONTRACT MANAGEMENT ................................................................................................................................. 54 4.4.4.3 CONTRACT SCHEDULE........................................................................................................................................ 54 4.4.4.4 MOBILIZATION AND IMPLEMENTATION PLAN................................................................................................... 55 4.4.4.5 POTENTIAL PROBLEMS ....................................................................................................................................... 55

4.4.5 ORGANIZATIONAL SUPPORT AND EXPERIENCE ..................................................................................................... 55 4.4.5.1 LOCATION.............................................................................................................................................................. 55 4.4.5.2 ORGANIZATION CHART (CONTRACT SPECIFIC) .............................................................................................. 55 4.4.5.3 REQUIRED POSITIONS AND RESUMES ............................................................................................................. 55 4.4.5.4 BACKUP STAFF..................................................................................................................................................... 57 4.4.5.5 ORGANIZATION CHART (ENTIRE FIRM) ............................................................................................................. 57 4.4.5.6 EXPERIENCE OF BIDDER ON CONTRACTS OF SIMILAR SIZE AND SCOPE.................................................. 57 4.4.5.7 FINANCIAL CAPABILITY OF THE BIDDER........................................................................................................... 57 4.4.5.8 SUBCONTRACTOR(S)........................................................................................................................................... 58

4.4.6 PRICE SCHEDULE......................................................................................................................................................... 58 5.0 SPECIAL CONTRACTUAL TERMS AND CONDITIONS............................................................................................................ 59

5.1 PRECEDENCE OF SPECIAL CONTRACTUAL TERMS AND CONDITIONS........................................................................ 59 5.2 CONTRACT TERM AND EXTENSION OPTION .................................................................................................................... 59 5.3 CONTRACT TRANSITION...................................................................................................................................................... 59 5.4 CONTRACT AMENDMENT .................................................................................................................................................... 59 5.5 CONTRACTOR RESPONSIBILITIES ..................................................................................................................................... 59 5.6 SUBSTITUTION OF STAFF.................................................................................................................................................... 60 5.7 SUBSTITUTION OR ADDITION OF SUBCONTRACTOR(S) ................................................................................................. 60 5.8 OWNERSHIP OF MATERIAL ................................................................................................................................................. 60 5.9 DATA CONFIDENTIALITY ...................................................................................................................................................... 61 5.10 NEWS RELEASES................................................................................................................................................................ 61 5.11 ADVERTISING ...................................................................................................................................................................... 61 5.12 LICENSES AND PERMITS ................................................................................................................................................... 61 5.13 CLAIMS AND REMEDIES..................................................................................................................................................... 62

5.13.1 CLAIMS......................................................................................................................................................................... 62 5.13.2 REMEDIES.................................................................................................................................................................... 62 5.13.3 REMEDIES FOR FAILURE TO COMPLY WITH MATERIAL CONTRACT REQUIREMENTS .................................... 62

5.14 LATE DELIVERY................................................................................................................................................................... 62 5.15 RETAINAGE.......................................................................................................................................................................... 62 5.16 STATE'S OPTION TO REDUCE SCOPE OF WORK ........................................................................................................... 62 5.17 SUSPENSION OF WORK..................................................................................................................................................... 62 5.18 CHANGE IN LAW.................................................................................................................................................................. 63 5.19 CONTRACT PRICE INCREASE (PREVAILING WAGE) ...................................................................................................... 63 5.20 ADDITIONAL WORK AND/OR SPECIAL PROJECTS ......................................................................................................... 63 5.21 FORM OF COMPENSATION AND PAYMENT..................................................................................................................... 64

5.21.1 PAYMENT TO CONTRACTOR - OPTIONAL METHOD............................................................................................... 64 5.22 MODIFICATIONS AND CHANGES TO THE NJ STANDARD TERMS AND CONDITIONS VERSION 05 09 06 ................ 64

5.22.1 PATENT AND COPYRIGHT INDEMNITY .................................................................................................................... 64 5.22.2 INDEMNIFICATION ...................................................................................................................................................... 65 5.22.3 INSURANCE - PROFESSIONAL LIABILITY INSURANCE .......................................................................................... 65

6.0 PROPOSAL EVALUATION ......................................................................................................................................................... 66 6.1 PROPOSAL EVALUATION COMMITTEE .............................................................................................................................. 66 6.2 ORAL PRESENTATION AND/OR CLARIFICATION OF BID PROPOSAL............................................................................. 66 6.3 EVALUATION CRITERIA ........................................................................................................................................................ 66

6.3.1 TECHNICAL EVALUATION CRITERIA .......................................................................................................................... 66 6.3.2 BIDDER’S PRICE SCHEDULE....................................................................................................................................... 67 6.3.3 BID DISCREPANCIES.................................................................................................................................................... 67 6.3.4 EVALUATION OF BID PROPOSAL................................................................................................................................ 67

6.4 NEGOTIATION AND BEST AND FINAL OFFER (BAFO)....................................................................................................... 67

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7.0 CONTRACT AWARD................................................................................................................................................................... 69 7.1 DOCUMENTS REQUIRED BEFORE CONTRACT AWARD .................................................................................................. 69

7.1.1 REQUIREMENTS OF N.J.S.A. 19:44A-20.13-25 (FORMERLY EXECUTIVE ORDER 134).......................................... 69 7.1.1.1 DEFINITIONS ......................................................................................................................................................... 69 7.1.1.2 BREACH OF TERMS OF THE LEGISLATION....................................................................................................... 69 7.1.1.3 CERTIFICATION AND DISCLOSURE REQUIREMENTS...................................................................................... 70 7.1.1.4 STATE TREASURER REVIEW .............................................................................................................................. 70 7.1.1.5 ADDITIONAL DISCLOSURE REQUIREMENT OF P.L. 2005, C. 271.................................................................... 70

7.1.2 SOURCE DISCLOSURE REQUIREMENTS................................................................................................................... 71 7.1.2.1 REQUIREMENTS OF N.J.S.A. 52:34-13.2............................................................................................................. 71 7.1.2.2 SOURCE DISCLOSURE REQUIREMENTS .......................................................................................................... 71 7.1.2.3 BREACH OF CONTRACT OF EXECUTIVE ORDER 129...................................................................................... 71

7.2 FINAL CONTRACT AWARD ................................................................................................................................................... 71 7.3 INSURANCE CERTIFICATES ................................................................................................................................................ 71 7.4 PERFORMANCE BOND ......................................................................................................................................................... 71

8.0 CONTRACT ADMINISTRATION.................................................................................................................................................. 72 8.1 CONTRACT MANAGER ......................................................................................................................................................... 72

8.1.1 STATE CONTRACT MANAGER RESPONSIBILITIES................................................................................................... 72 8.1.2 COORDINATION WITH THE STATE CONTRACT MANAGER ..................................................................................... 72

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NOTICE TO BIDDERS

SET-ASIDE CONTRACTS N.J.S.A 52:32-17, N.J.A.C. 17:13, 12A:10

Pursuant to the provisions of the New Jersey statute and administrative code cited above, this contract, or a portion thereof, has been designated as a set-aside contract for Small Business. As such, as indicated on page one of this document, eligibility to bid is limited to bidders (or subcontractors, as applicable) that meet statutory and regulatory requirements and have had their eligibility determined by the New Jersey Commerce and Economic Growth Commission (Commerce). The definitions of each Small Business set-aside category can be found at N.J.A.C. 17:13-1.2 or N.J.A.C. 12A:10-1.2. "Small Business" means a business that has its principal place of business in the state of New Jersey, is independently owned and operated, and has no more than 100 full-time employees. The new program places Small Business into the following categories: (I) those with gross revenues up to $500,000; (II) those with gross revenues of up to $5 million; and (III) those with gross revenues that do not exceed $12 million. While companies registered as having revenues below $500,000 can bid on any contract, those earning more than the $500,000 and $5 million amounts will not be permitted to bid on contracts designated for revenue classifications below their respective levels. Each business interested in bidding for this contract should provide, as part of its response to this solicitation, proof of its current registration as a qualifying Small Business with the New Jersey Commerce and Economic Growth Commission. Any business that seeks to register as a Small Business is required to submit a fee along with its application to Commerce. All necessary forms and any additional information concerning registration may be obtained by contacting Commerce's office of Small Business services, by telephone at the number below, or by mail, or in person between the hours of 9:00 am and 5:00 pm at the address below:

NEW JERSEY COMMERCE AND ECONOMIC GROWTH COMMISSION OFFICE OF SMALL BUSINESS SERVICES

20 WEST STATE STREET - 4TH FLOOR PO BOX 820, TRENTON, NJ 08625-0820

TELEPHONE: 609-292-2146

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1.0 INFORMATION FOR BIDDERS 1.1 PURPOSE AND INTENT This Request for Proposal (RFP) is issued by the Purchase Bureau, Division of Purchase and Property, Department of the Treasury on behalf of Division of Administration, Department of the Treasury. The purpose of this RFP is to solicit bid proposals for energy consulting services needed by the State Energy Office when it attempts to obtain energy-related cost savings for the State of New Jersey and participating agencies, and especially for state facilities, and to promote available programs and services in the areas of clean energy, fuel efficiency and energy conservation. The office also helps facilitate an organization formed in Treasury called the New Jersey Consolidated Energy Savings Program (NJCESP), a consortium of governmental agencies concerned about the cost of buying energy for themselves and about those costs passed on to the general public whom they serve. The intent of this RFP is to award a contract to that responsible bidder whose bid proposals, conforming to this RFP is most advantageous to the State, price and other factors considered. However, the State reserves the right to separately procure individual requirements that are the subject of the contract during the contract term, when deemed by the Director to be in the State’s best interest. The NJ Standard Terms & Conditions version 05 09 06 will apply to all contracts or purchase agreements made with the State of New Jersey. These terms are in addition to the terms and conditions set forth in this RFP and should be read in conjunction with them unless the RFP specifically indicates otherwise. 1.2 BACKGROUND The energy consulting services contractor will advise the Energy Office on matters related to energy usage and energy procurements. The Energy Office services state government in all areas of energy involvement at the operational level: assisting in development of energy budgets, developing energy savings projects among state agencies, developing and recommending energy conservation measures and facilities improvements, recommending funding sources for projects, and educating state agencies about energy savings related measures. The Energy Office now finds itself in a position to concentrate also on necessary state-owned building infrastructure improvements to energy resources, HVAC and building command systems, among other facilities related improvements or decreases in energy usage. Since early 1999 the NJCESP, an Affinity Group, and participating governmental agencies have been seeking an efficient means of aggregating its energy (natural gas and electricity) needs and entering into mutually beneficial cost-effective contracts with energy suppliers. These efforts have been largely successful with long term contract cost avoidance savings accruing. In 2003, the NJCESP bid its Fixed Price (FP) electricity supply accounts, for a volume of roughly 300 million kWhs, but prices were not favorable and no award was made. Good market prices for FP accounts have lagged ever since. The NJCESP was successful in acquiring 91 million kWh of Green Power (a Green-e certified product), annually on April 1, 2005, but at a premium price; this contract expiration date is April 30, 2006 (this contract will temporarily lapse until new funding is found; the next RFP is scheduled to use Renewable Energy Certificates). In November 2005 the NJCESP acquired 25 million therms annually from a third party supplier for a four year term. Starting in June 2006 the NJCESP will have a one-year contract for its CIEP electricity accounts totaling over 626 million kWhs a year. The NJCESP feels that aggregation serves its best interests and is determined to leverage its energy needs in the open market to shop for the best price, consistent, if possible, with positive environmental attributes. The Energy Office is also very involved with demand side management (load management, energy conservation) of its many buildings (over 24 mostly office buildings in the Trenton area

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alone). Most of the Trenton buildings are heated and cooled though the operation of a downtown Trenton cogeneration plant owned by Trigen District Energy Company. The State manages numerous prisons, homes for the aged, and health and welfare institutional buildings as well, located throughout the state. Building audits and energy savings review projects such as evaluating new boiler plans, or renovating HVAC systems, or implementing direct digital building control systems, will be needed. Possibilities for lighting retrofits, or developing energy conservation measures will also be required. 1.2.1 NJCESP PARTICIPANT / INTERESTED PARTIES The NJCESP is coordinated through the resources of the Energy Office. Some participants in the NJCESP aggregation and background information on each follows: The State of New Jersey, made up of dozens of agencies primarily of business offices with normal business hours, and prisons and healthcare institutions which operate 24 hours a day, seven days a week (24/7), also with street lighting and numerous field locations; New Jersey Transit, with electric traction for trains, numerous bus garages, a number of train stations, and maintenance facilities; four State colleges and universities of varying sizes, each operating on extended business hours nine months of the year, and partially during the summer months; the New Jersey Turnpike Authority operates the Garden State Parkway which runs from Montvale in the north, along the east coast of the state, to Cape May in the south and its facilities operate 24/7 with 29 toll plazas and branch lines, nine maintenance yards with a central maintenance complex located at Telegraph Hill in Holmdel, and four New Jersey State Police Barracks using electricity for lighting along the roadway and power for a variety of facilities including a three story administrative building in Woodbridge and the Vietnam Veterans Memorial and Museum located at Telegraph Hill; the New Jersey Turnpike Authority also owns and operates the NJ Turnpike with 26 interchanges, ten maintenance districts, an Administration Building, all operating 24/7; The NJ Institute of Technology; the New Jersey Water Supply Authority with numerous pumping stations, small satellite offices, an Administration building and Annex; the South Jersey Transportation Authority owns and operates the Atlantic City Expressway, the A. C. International Airport, and a parking garage facility in Atlantic City with all services, road lighting and toll booths operating 24/7 – The A.C. International Airport services include terminal and maintenance facilities, airfield lighting, parking lots, roadways and a fire house; and, potentially, the Port Authority of New York and New Jersey which operates tunnels, bridges, three airports and the Path, along with an office building. These are the major participants in the aggregation effort. Other interested governmental parties may be added. This is a reprocurement of the Consulting Services: Energy Consulting Services term contract, presently due to expire on November 15, 2006. Bidders who are interested in the current contract specifications and pricing information may review the current contract (Enter T 2000) at http://www.state.nj.us/treasury/purchase/contracts.htm. 1.3 KEY EVENTS 1.3.1 ELECTRONIC QUESTION AND ANSWER PERIOD The Purchase Bureau will accept questions and inquiries from all potential bidders electronically via web form. To submit a question, please go to Current Bid Opportunities webpage or to http://ebid.nj.gov/QA.aspx Questions should be directly tied to the RFP and asked in consecutive order, from beginning to end, following the organization of the RFP. Each question should begin by referencing the RFP page number and section number to which it relates.

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Bidders are not to contact the Using Agency directly, in person, by telephone or by email, concerning this RFP. The cut-off date for electronic questions and inquiries relating to this RFP is indicated on the cover sheet. Addenda to this RFP, if any, will be posted on the Purchase Bureau website after the cut-off date (see Section 1.4.1. of this RFP for further information.) 1.3.2 SUBMISSION OF BID PROPOSAL In order to be considered for award, the bid proposal must be received by the Purchase Bureau of the Division of Purchase and Property at the appropriate location by the required time. ANY BID PROPOSAL NOT RECEIVED ON TIME AT THE LOCATION INDICATED BELOW WILL BE REJECTED. THE DATE AND TIME IS INDICATED ON THE COVER SHEET. THE LOCATION IS AS FOLLOWS: BID RECEIVING ROOM - 9TH FLOOR PURCHASE BUREAU DIVISION OF PURCHASE AND PROPERTY DEPARTMENT OF THE TREASURY 33 WEST STATE STREET, P.O. BOX 230 TRENTON, NJ 08625-0230 Directions to the Purchase Bureau can be found at the following web address: http://www.state.nj.us/treasury/purchase/directions.shtml Note: Bidders using USPS Regular or Express mail services should allow additional time since USPS mail deliveries are not delivered directly to the Purchase Bureau. 1.4 ADDITIONAL INFORMATION 1.4.1 ADDENDA: REVISIONS TO THIS RFP In the event that it becomes necessary to clarify or revise this RFP, such clarification or revision will be by addendum. Any addendum to this RFP will become part of this RFP and part of any contract awarded as a result of this RFP. ALL RFP ADDENDA WILL BE ISSUED ON THE DIVISION OF PURCHASE AND PROPERTY WEB SITE. TO ACCESS ADDENDA, SELECT THE BID NUMBER ON THE BIDDING OPPORTUNITIES WEB PAGE AT THE FOLLOWING ADDRESS: HTTP://WWW.STATE.NJ.US/TREASURY/PURCHASE/BID/SUMMARY/BID.SHTML. There are no designated dates for release of addenda. Therefore interested bidders should check the Purchase Bureau "Bidding Opportunities" website on a daily basis from time of RFP issuance through bid opening. It is the sole responsibility of the bidder to be knowledgeable of all addenda related to this procurement. 1.4.2 BIDDER RESPONSIBILITY The bidder assumes sole responsibility for the complete effort required in submitting a bid proposal in response to this RFP. No special consideration will be given after bid proposals are opened because of a bidder's failure to be knowledgeable as to all of the requirements of this RFP.

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1.4.3 COST LIABILITY The State assumes no responsibility and bears no liability for costs incurred by a bidder in the preparation and submittal of a bid proposal in response to this RFP. 1.4.4 CONTENTS OF BID PROPOSAL Subsequent to bid opening, all information submitted by bidders in response to the bid solicitation is considered public information, except as may be exempted from public disclosure by the Open Public Records Act, N.J.S.A. 47:1A-1 et seq., and the common law. Because the State proposes to negotiate and/or pursue a Best and Final Offer, bid proposals will not be made public until the Letter of Intent to Award is issued. A bidder may designate specific information as not subject to disclosure when the bidder has a good faith legal/factual basis for such assertion. The State reserves the right to make the determination and will advise the bidder accordingly. The location in the bid proposal of any such designation should be clearly stated in a cover letter. The State will not honor any attempt by a bidder either to designate its entire bid proposal as proprietary and/or to claim copyright protection for its entire proposal. All bid proposals, with the exception of information determined by the State or the Court to be proprietary, are available for public inspection after the Letter of Intent to Award is issued. At such time, interested parties can make an appointment with the Purchase Bureau to inspect bid proposals received in response to this RFP. 1.4.5 BID OPENING On the date and time bid proposals are due under the RFP, only the names of the bidders submitting bid proposals will be publicly announced. The contents of the bid proposals shall remain confidential until the Notice of Intent to Award is issued by the Director. 1.4.6 PRICE ALTERATION Bid prices must be typed or written in ink. Any price change (including "white-outs") must be initialed. Failure to initial price changes shall preclude a contract award from being made to the bidder. 1.4.7 JOINT VENTURE If a joint venture is submitting a bid proposal, the agreement between the parties relating to such joint venture should be submitted with the joint venture’s bid proposal. Authorized signatories from each party comprising the joint venture must sign the bid proposal. A separate Ownership Disclosure Form, Disclosure of Investigations and Actions Involving Bidder, Affirmative Action Employee Information Report, MacBride Principles Certification, and Business Registration or Interim Registration must be supplied for each party to a joint venture.

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2.0 DEFINITIONS 2.1 GENERAL DEFINITIONS The following definitions will be part of any contract awarded or order placed as result of this RFP. Addendum – Written clarification or revision to this RFP issued by the Purchase Bureau. All-Inclusive Hourly Rate – An hourly rate comprised of all direct and indirect costs including, but not limited to: overhead, fee or profit, clerical support, travel expenses, per diem, safety equipment, materials, supplies, managerial support and all documents, forms, and reproductions thereof. This rate also includes portal-to-portal expenses as well as per diem expenses such as food. Amendment – A change in the scope of work to be performed by the contractor. An amendment is not effective until it is signed by the Director, Division of Purchase and Property. Bidder – An individual or business entity submitting a bid proposal in response to this RFP. Contract – This RFP, any addendum to this RFP, and the bidder’s proposal submitted in response to this RFP, as accepted by the State. Contractor – The bidder awarded a contract resulting from this RFP. Also referred to as the Implementation Contractor. Director – Director, Division of Purchase and Property, Department of the Treasury. By statutory authority, the Director is the chief contracting officer for the State of New Jersey. Division – The Division of Purchase and Property Evaluation Committee – A committee established by the Director to review and evaluate bid proposals submitted in response to this RFP and to recommend a contract award to the Director. Firm Fixed Price – A price that is all-inclusive of direct cost and indirect costs, including, but not limited to, direct labor costs, overhead, fee or profit, clerical support, equipment, materials, supplies, managerial (administrative) support, all documents, reports, forms, travel, reproduction and any other costs. No additional fees or costs shall be paid by the State unless there is a change in the scope of work. Joint Venture – A business undertaking by two or more entities to share risk and responsibility for a specific project. May – Denotes that which is permissible, not mandatory. Project – The undertaking or services that are the subject of this RFP. Request for Proposal (RFP) – This document which establishes the bidding and contract requirements and solicits bid proposals to meet the purchase needs of the using Agencies as identified herein. Shall or Must – Denotes that which is a mandatory requirement. Failure to meet a mandatory requirement will result in the rejection of a bid proposal as materially non-responsive.

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Should – Denotes that which is recommended, not mandatory. State Contract Manager – The individual responsible for the approval of all deliverables, i.e., tasks, sub-tasks or other work elements in the Scope of Work as set forth in Sections 8.1, 8.1.1 and 8.1.2. Subtasks – Detailed activities that comprise the actual performance of a task. State – State of New Jersey. Subcontractor – An entity having an arrangement with a State contractor, where the State contractor uses the products and/or services of that entity to fulfill some of its obligations under its State contract, while retaining full responsibility for the performance of all of its [the contractor's] obligations under the contract, including payment to the subcontractor. The subcontractor has no legal relationship with the State, only with the contractor. Task – A discrete unit of work to be performed. Using Agency[ies] – The entity[ies] for which the Division has issued this RFP and will enter into a contract.

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2.2 CONTRACT SPECIFIC DEFINITIONS Above-market Cost - The cost of a good or service that is in excess of the price of comparable goods and services in the market. Typically refers to the cost of a public good or stranded benefit that exceeds or would increase the short-term marginal cost of delivered electricity alone or lacking such public good characteristics. Access Charge - A charge levied on a power supplier, or its customer, for access to a utility's transmission or distribution system, ostensibly covering that system owner's costs (plus profits) to send someone else's electricity over his wires. Affinity Group - Any organization of similar energy customers that have a pre-existing relationship that is used to foster aggregated purchasing of energy (e.g., BOMA chapter, Dry Cleaners Association, industrial development group, etc.) Aggregator - An entity that assembles customers into a buying group for the purchase of a commodity service. The vertically integrated investor-owned utility, municipal utilities and rural electric cooperatives perform this function in today's power market, and others, such as buyer cooperatives, power marketers, affinity groups, or brokers are performing this function in restructured power markets. This is opposed to Marketer (see below) which will be defined as an entity that represents different suppliers. See also Value-driven Aggregator. Ampere - The unit of measurement of electrical current produced in a circuit by 1 volt acting through a resistance of 1 ohm. AMR (Automated Meter Reading) - AMR is a form of advanced (or enhanced) metering that uses communications devices to communicate data from the meter to the utility or (in an unbundled metering services environment) the meter reading or meter data management provider. AMR may be used to transmit simple energy usage data from the meter, or to transmit more complex measures of energy recorded in the meter, or to implement advanced functionality such as outage detection, remote programming of meters by an authorized party, or other functionality. See also NMR (Network Meter Reading). Ancillary Services - Interconnected Operations Services identified by the U.S. Federal Energy Regulatory Commission (Order No. 888 issued April 24, 1996) as necessary to ensure the reliable operation of the transmission system and facilitate power transfers. Some of these services include: scheduling, system control and dispatch; reactive power supply, voltage support and voltage control; regulation and frequency control; energy imbalance (short-term load following); standby generation; operating reserves, including spinning and supplemental reserves; compensation for real power or transmission losses; dynamic scheduling of generation in response to fluctuations in specific loads; and restoration of generation service or black start capabilities. Transmission Providers must include such additional services in an open access transmission tariff. Ask - The lowest price offered at which a security or commodity is available for sale. Ask Size - The number of contracts offered at the ask price (e.g., 150 MW that is being offered in the form of standard 50 MW contracts translates to an ask size of 3 contracts) . Asset - An economic resource, tangible or intangible, which is expected to provide benefits to a business. Automatic Meter Reading Association (AMRA) - Industry organization for utility metering firms.

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Available but not Needed Capability - Net capability of main generating units that are operable but not considered necessary to carry load, and cannot be connected to load within 30 minutes. Available Transfer Capability (ATC) - A measure of the transfer capability remaining in the physical transmission network for further commercial activity over and above already committed uses. ATC is defined as the Total Transfer Capability (TTC), less the Transmission Reliability Margin (TRM), less the sum of existing transmission commitments (which includes retail customer service) and the Capacity Benefit Margin (CBM). Availability - A measure of time a generating unit, transmission line, or other facility is capable of providing service, whether or not it actually is in service. Typically, this measure is expressed as a percent available for the period under consideration, e.g., an availability of 80% typically means that a plant could have produced power for about 7,000 hours during a year (80% x 8,760 hr/yr = 7,008) had requests been made for such service. Average Revenue per Kilowatt-hour - The average revenue per kilowatt-hour of electricity sold by sector (residential, commercial, industrial, or other) and geographic area (State, Census division, and National), is calculated by dividing the total monthly revenue by the corresponding total monthly sales for each sector and geographic area. Avoided Cost - The cost the utility would incur but for the existence of an independent generator or other energy service option. Avoided cost rates have been used as the power purchase price utilities offer independent suppliers known as qualifying facilities. See Qualifying Facility. Back Out Rate - A credit on an electric bill that purports to represent the cost of electric supply (meaning production, but not transmission or distribution) from the utility. Sometimes also called Supply Credit or Shopping Credit, such numbers are used as a benchmark against which customers seek prices below the credit. That difference is then the amount saved (relative to continued purchasing from the utility) by buying power from a competitive supplier. Backup Power - Power provided by contract to a customer when that customer's normal source of power is not available. Backup Supply Service - See Interconnected Operations Services. Balancing and Settlement - A process of reconciling the total kWh (including Losses during delivery) provided to the system on behalf of a customer (or group of customers) to the amount of power used by that customer during a given time period. Settlement will be completed when the cost of the imbalance between scheduled delivery and aggregated customer usage is assessed. The settlement process relies on readings from interval meters, readings from billing meters, and load profiles to calculate the customer's usage. Barrel - A volumetric unit of measure for crude oil and petroleum products equivalent to 42 U.S. gallons. Base Bill - A charge calculated through multiplication of the rate from the appropriate electric rate schedule by the level of consumption. Baseload - The minimum amount of electric power delivered or required over a given period of time at a constant rate. On an hourly or monthly load profile, this is the level of demand or usage that is seen as a minimum on most hours, including evenings, thereby forming the "base" that peaks rest on.

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Baseload Capacity - The generating equipment normally operated to serve loads on an around-the-clock basis. Bbl - The abbreviation for barrel. Bcf - The abbreviation for 1 billion cubic feet, usually applied to natural gas. BGS (Basic Generation Service) - Electric generation service that is provided, pursuant to section 9 of the Electric Discount and Energy Competition Act (EDECA), to any customer that has not chosen an alternative electric power supplier, whether or not the customer has received offers as to competitive supply options, including but not limited to, any customer that cannot obtain such service for any reason, including non-payment of service. BGS is not a competitive service and shall be fully regulated by the BPU. BGS-FP Customer or Account - A small or medium-sized commercial account or customer who would be served under any of the LDC’s BGS – Fixed Price tariffs effective August 1, 2003 and as established through the time of this RFP. BGS-CIEP Customer or Account - A medium or large commercial or industrial account or customer who would be interval-metered and served under any of the LDC’s BGS –Commercial and Industrial Energy Pricing hourly tariffs as of August 1, 2003 and as established through the time of this RFP. Bid - The highest price a prospective buyer is prepared to pay for a security or commodity at a particular time. Bid Size - The number of contracts offered at the bid price. Bilateral Contract - A direct contract between the power producer and user or broker outside of a centralized power pool. Boiler - A device for generating steam for power, processing, or heating purposes or for producing hot water for heating purposes or hot water supply. Heat from a contained combustion source (typically called the "burner") is transferred to a fluid circulating inside the boiler. Bottom-up - An approach taken when unbundling utility rates, and the opposite of a top-down approach. Bottom-up implies consideration of all components of a utility rate for possible competition, including transmission, distribution, customer service, metering, marketing, taxes, etc. as well as the energy component (which is generally considered the "top" of the rate). A top-down approach involves an examination in the reverse order and typically results in only the energy component becoming subject to competition, instead of all aspects of the utility rate. BPU - The New Jersey Board of Public Utilities. Broker - A third party who establishes a transaction between a seller and a purchaser without taking title to the power. Such an agent may also aggregate customers and arrange for transmission, firming and other ancillary services as needed. BTU (British Thermal Unit) - A standard unit for measuring the quantity of heat energy equal to the quantity of heat required to raise the temperature of 1 pound of water by 1 degree Fahrenheit. Bulk Electric System - A term commonly applied to the portion of an electric utility system that encompasses the electrical generation resources and bulk transmission system.

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Bulk Power Supply - Often this term is used interchangeably with wholesale power supply. In broader terms, it refers to the aggregate of electric generating plants, transmission lines, and related equipment. The term may refer to those facilities within one electric utility, or within a group of utilities in which the transmission lines are interconnected. Buy Through - An agreement between utility and customer to import power when the customer's service would otherwise be interrupted and to price such power at prevailing spot market rates. Bypass - A situation that allows a customer to get full or partial electricity or natural gas service from a non-utility supplier instead of a utility, typically by connecting to a main transmission line instead of using the local utility's distribution system. Capacity Charge - An element in a two-part pricing method used in capacity transactions (energy charge is the other element). The capacity charge, sometimes called Demand Charge, is assessed on the amount of capacity being purchased. Captive Customer - A customer who does not have realistic alternatives to buying power from the local utility, even if that customer had the legal right to buy from competitors. CAVEE (Customer Association, Validation, Editing and Estimation) - CAVEE is the process in which meter data, which has been translated into a common format, is processed and readied for bill generation and other operations that require validated usage data. In CAVEE meter data are associated with the correct customer through reference to the service provider's database. The data are then subjected to a number of tests for reasonableness, compared to stored usage history and transmitted to billing and other appropriate functions. If data are missing, usage estimations are made according to fixed rules. If anomalies are found error reports are generated. Certification - The process of granting permission to do business or to sell a particular product. A device states can use to enforce standards of conduct and quality on competitive suppliers, on pain of penalties including civil fines, suspension of certification, and revocation of certification to do business. Similar to licensor. Contrast registration, which requires providing information, including perhaps proof of financial and technical capability to the state, but does not provide for penalties or revocation of the right to do business upon violation of the norms of conduct. Circuit - A conductor or a system of conductors through which electric current flows. C/I - Abbreviation for "Commercial and Industrial" customers; also C&I. CIS - See Customer Information System. City Gate - The point where the systems of an interstate pipeline and a local gas distribution company meet. Pricing for natural gas bought from a marketer is often set at a City Gate, to which local distribution (and possibly balancing) charges must be added. Class I renewable energy - Electric energy produced from solar technologies, photovoltaic technologies, wind energy, fuel cells, geothermal technologies, wave or tidal action, and methane gas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainable manner.” Class II renewable energy - Electric energy produced at a resource recovery facility or hydropower facility, provided that such facility is located where retail competition is permitted and provided further that the Commissioner of Environmental Protection has determined that such facility meets the highest environmental standards and minimizes any impacts to the environment and local communities.

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Close - The price of the last transaction completed for the commodity trading session. CMR - See Customer Relationship Management. Cogeneration - Production of electricity from steam, heat, or other forms of energy produced as a by-product of another process. Also called Combined Heat and Power (CHP). Cogenerator - A generating facility that produces electricity and another form of useful thermal energy (such as heat or steam) used for industrial, commercial, heating, or cooling purposes. Many cogeneration systems are also Qualifying Facilities (QF). To receive status as a qualifying facility (QF) under the Public Utility Regulatory Policies Act (PURPA), the facility must produce electric energy and "another form of useful thermal energy through the sequential use of energy," and meet certain ownership, operating, and efficiency criteria established by the Federal Energy Regulatory Commission (FERC). (See the code of Federal Regulations, Title 18, Part 292.) Combined Cycle Unit - An electric generating unit that consists of one or more combustion turbines and one or more boilers with a portion of the required energy input to the boiler(s) provided by the exhaust gas of the combustion turbine(s). Combined Pumped-Storage Plant - A pumped-storage hydroelectric power plant that uses both pumped water and natural stream flow to produce electricity. Combined Heat and Power (CHP) - see Cogeneration. Combustion Turbine - Any of several types of high speed (usually gas-fired) generators using principles and designs of jet engines to produce low cost, high efficiency power. Commercial - The commercial sector is generally defined as non-manufacturing business establishments, including hotels, motels, restaurants, wholesale businesses, retail stores, and health, social, and educational institutions. A utility may also classify the commercial sector as all consumers whose demand or annual use exceeds some specified limit. The limit may be set by the utility based on the rate schedule of the utility. Commercial Information - Information that can be used in the marketplace. Commission - The Federal Energy Regulatory Commission (FERC) or a local (usually state) regulatory commission, typically called a Public Utility Commission or PUC. See Federal Energy Regulatory Commission and Public Utility Commission. Commodity - A standardized product for sale, generally not very differentiable by vendor. Commodity Cost - The cost of a commodity (natural gas or electricity) and related charges to deliver it to the marketplace. Commonly Owned Unit - A generating unit whose capacity is owned or leased and divided among two or more entities. Synonym: Jointly Owned Unit. Competitive Market - An environment that allows many sellers and buyers to buy and sell goods or services from each other, unfettered by heavy regulation. Competitive Transition Charge (CTC) - A nonbypassable charge generally placed on distribution services to recover utility costs incurred as a result of restructuring (stranded costs -

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usually associated with generation facilities and services) and not recoverable in other ways. See also Non-by-passable Charge. Congestion Management System (CMS) - Any of several methods to control the cost of transmission congestion. Connection - The physical contact point (e.g. transmission lines, transformers, switch gear, etc.) between two electric systems permitting the transfer of electric energy in one or both directions. Construction Work In Progress (CWIP) - The charge shown on a utility's balance sheet for construction work not yet completed but in process. This balance line item may or may not be included in the rate base. Consumption - The amount of fuel used for gross generation, providing standby service, start-up and/or flame stabilization. The quantity of electricity or natural gas consumed during a utility billing period. Contingency - The unexpected failure or outage of a system component, such as a generator, transmission line, circuit breaker, switch, or other electrical element. A contingency also may include multiple components, which are related by situations leading to simultaneous component outages. Contract Documents - Documents that comprise an agreement between two parties to deliver and/or accept a product or service. Contract Expiration Date - The last date on which the contract can be exercised. Contract High - The highest intra-day price within the life of the contract. Contract Low - The lowest intra-day price within the life of the contract Contract Price - Price of fuels marketed on a contract basis covering a period of 1 or more years. Contract prices reflect market conditions at the time the contract was negotiated and therefore remain constant throughout the life of the contract or are adjusted through escalation clauses. Generally, contract prices do not fluctuate widely. Convergence - The allying and/or merging of electric and natural gas suppliers/marketers due to common goals and business interests. Core Customer - A customer who depends on a utility for the delivery of energy or services. This customer generally does not have alternatives to buy energy from a non-utility supplier. Cost-Based Pricing - Prices controlled by the fees charged by a provider, as versus market-based pricing. Cost-Based Regulation - Adjustment of rates based on costs rather than market prices. Cost of Service - The cost claimed by a utility to provide service to its customers. CT - Abbreviation for Combustion Turbine or Current Transformers. Current (Electric) - A flow of electrons in an electrical conductor. The strength or rate of movement of the electricity is measured in amperes.

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Current Transformers - Small doughnut-shaped units that fit around power conduits to assist the measurement of the current passing through such power lines. Curtailability - The right of a transmission provider to interrupt all or part of a transmission service due to constraints that reduce the capability of the transmission network to provide that transmission service. Transmission service is to be curtailed only in cases where system reliability is threatened or emergency conditions exist. May also be called Interruptibility. Curtailable - A type of service that allows a power provider to request, but not demand, that a customer reduce his load in exchange for a defined payment that is proportional to the accomplished reduction. Curtailment - A reduction in the scheduled capacity or energy delivery. Customer Obligations - The responsibilities that a customer has, such as paying bills, maintaining safety of a natural gas or electric hookup, and preventing theft of service. Daily Limit - Maximum price variation that commodities and options markets are allowed to experience in one day. Date of Contract High - The date of the lifetime contract high. Date of Contract Low - The date of the lifetime contract low. Deliverability - The amount of natural gas that a well, production field, pipeline, or distribution system can deliver in a given period. Delivering Party - The entity supplying the capacity and/or energy to be transmitted at Point(s) of Receipt. Delivery of Natural Gas and Electric Service Economy - Energy provided at a lower price when a supplier has excess available capacity. Firm - Energy provided to customers on a continuous basis without interruption. Interruptible - Energy provided to customers with a provision that permits curtailment or cessation of service at the discretion of the distributing company under certain circumstances, as specified in the service contract. Off-Peak - Energy provided to customers in accordance with contractual arrangements to interrupt consumer load at times of peak load by direct control of the utility system operator or by action of the consumer at the direct request of the system operator. Seasonal - Energy provided to customers in accordance with contractual arrangements to interrupt consumer load at times of seasonal (i.e., summer and winter) peak load by direct control of the utility system operator or by action of the consumer at the direct request of the system operator. Delivery Point - See Point(s) of Delivery. Demand - The rate at which electric energy is delivered to or by a system or part of a system, generally expressed in kilowatts or megawatts, at a given instant or averaged over any designated interval of time. Demand should not be confused with Load. Types of Demand include:

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Instantaneous Demand - The rate of energy delivered at a given instant. Average Demand - The electric energy delivered over any interval of time as determined by dividing the total energy by the units of time in the interval. Interruptible Demand - The magnitude of customer demand that, in accordance with contractual arrangements, can be interrupted by direct control of the system operator or by action of the customer at the direct request of the system operator. In some instances, the demand reduction may be initiated by the direct action of the system operator (remote tripping) with or without notice to the customer in accordance with contractual provisions. Interruptible Demand as defined here does not include Direct Control Load Management. Demand Interval - The time period during which electric energy is measured, usually in 15-, 30-, or 60-minute increments; peak demand is then the kWh during that interval divided by the length of that interval in hours (e.g., for billing purposes, the peak demand seen in a 15-minute interval in which 100 kWh is consumed could be found by dividing 100 kWh by 1/4 hour, yielding a peak billable demand of $00 kW). Peak Demand - The highest electric requirement occurring in a given period (e.g., an hour, a day, month, season, or year). For an electric system, it is equal to the sum of the metered net outputs of all generators within a system and the metered line flows into the system, less the metered line flows out of the system. Contract Demand - The amount of capacity that a supplier agrees to make available for delivery to a particular entity and which the entity agrees to purchase. Firm Demand - That portion of the Contract Demand that a power supplier is obligated to provide except when system reliability is threatened or during emergency conditions. Billing Demand - The demand upon which customer billing is based as specified in a rate schedule or contract. It may be based on the contract year, a contract minimum, or a previous maximum and, therefore, does not necessarily coincide with the actual measured demand of the billing period. Demand Charge - A fee based on the peak amount of electricity used during the billing cycle. Residential customers are generally not levied a demand charge. Demand-Side Management - Often abbreviated DSM, it refers to the planning, implementation, and monitoring of activities designed to encourage consumers to modify patterns of electricity usage, including the timing and level of electricity demand. DSM covers the complete range of load-shape objectives, including strategic conservation and load management, as well as strategic load growth. Indirect Demand-Side Management includes such programs as conservation, improvements in efficiency of electrical energy use, rate incentives, rebates, and other similar activities to influence electricity use. Demand-Side Management Costs - When applied to a utility, they are the costs incurred to achieve the capacity and energy savings from a Demand-Side Management Program. When applied to a customer, they may include all costs to control demand, especially peak demand. DEP - New Jersey Department of Environmental Protection. Deregulation - The elimination of regulation from a previously regulated industry or sector of an industry.

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Direct Access - The ability of a retail customer to purchase commodity electricity directly from the wholesale market rather than through a local distribution utility. See also Retail Competition. Direct Control Load Management - The customer demand that can be interrupted by direct control of the system operator controlling the electric supply to individual appliances or equipment on customer premises. This type of control, when used by utilities, usually involves residential customers. Direct Control Load Management as defined here does not include Interruptible Demand. Direct Load Control - Refers to program activities that can interrupt consumer load at the time of annual peak load by direct control of the utility system operator by interrupting power supply to individual appliances or equipment on consumer premises. This type of control usually involves residential consumers. Direct Load Control excludes Interruptible Load and Other Load Management effects. One of the most common control methods involves the cycling or temporary shutdown of electric domestic hot water heaters through automatic remote control. Distillate Fuel Oil - A general classification for one of the petroleum fractions produced in conventional distillation operations. It is used primarily for space heating, on-and-off-highway diesel engine fuel (including railroad engine fuel and fuel for agriculture machinery), and electric power generation. Included are Fuel Oils No. 1, No. 2, and No. 4; and Diesel Fuels No. 1, No. 2, and No. 4. Heavier oils are commonly referred to as No. 5, No.6, and/or Bunker C. Distributed Generation - A system utilizing small generators located on a utility's distribution system for the purpose of meeting local (substation level) peak loads and/or displacing the need to build additional (or upgrade) local distribution lines. With the advent of small (< 100 kW) microturbine generators, distributed generation is beginning to include customer and/or marketer-owned capacity feeding single loads (e.g., a chiller plant), customers or small groups of customers. Distribution - The delivery of electricity to the retail customer's home or business through low voltage distribution lines (typically in the 120 volt to 69,000 volt range). Distribution System - The portion of an electric system that is dedicated to delivering electric energy directly to an end user. Distribution Utility (Disco) - The regulated electric utility entity that constructs and maintains the distribution wires connecting the transmission grid to the final customer. The Disco can also perform other services such as aggregating customers, purchasing power supply and transmission services for customers, billing customers and reimbursing suppliers, and offering other regulated or non-regulated energy services to retail customers. The "wires" and "customer service" functions provided by a distribution utility could be split so that two totally separate entities are used to supply these two types of distribution services. Disturbance - An unplanned event that produces an abnormal system condition. Divestiture - The stripping off of one utility function from the others by selling (spinning-off) or in some other way changing the ownership of the assets related to that function. Most commonly associated with spinning-off generation assets so they are no longer owned by the shareholders that own the transmission and distribution assets. See also Disaggregation. DSM - See Demand-Side Management. Dynamic Rating - The process that allows a system element rating to vary with the changing environmental conditions in which the element is located.

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Economic Dispatch - The allocation of demand to individual generating units on line to effect the most economical production of electricity. Economic Efficiency - A term that refers to the optimal production and consumption of goods and services. This generally occurs when prices of products and services reflect their marginal costs. Economic efficiency gains can be achieved through cost reduction, but it is better to think of the concept as actions that promote an increase in overall net value (which includes, but is not limited to, cost reductions). Economies of Scale - Advantages realized when combining of loads or services results in decreased average long-run costs. EDECA – the 1999 Electric Discount and Energy Competition Act instituted by New Jersey as a move towards deregulation of its energy markets. Also see BPU. Electrical Energy - The generation or use of electric power by a device over a period of time, expressed in kilowatt-hours (kWh), megawatt hours (MWh), or gigawatt hours (Gwh). Some ways of buying/supplying energy are: Firm Energy - Electrical Energy backed by capacity, interruptible only on conditions as agreed upon by contract, system reliability constraints, or emergency conditions and where the supporting reserve is supplied by the seller. Nonfirm Energy - Electrical Energy that may be interrupted by either the provider or the receiver of the energy by giving advance notice to the other party to the transaction. This advance notice period is equal to or greater than the minimum period agreed to in the contract. Nonfirm Energy may also be interrupted to maintain system reliability of third- party Transmission Providers. Nonfirm Energy must be backed up by reserves. Off-Peak Energy - Electrical Energy supplied during a period of relatively low system demands as specified by the supplier. On-Peak Energy - Electrical Energy supplied during a period of relatively high system demands as specified by the supplier. Electric Plant (Physical) - A facility containing prime movers, electric generators, and auxiliary equipment for converting mechanical, chemical, and/or fission energy into electric energy. Electric Power Supply - Electricity required to meet the customers' needs, including energy, operating capacity, losses, Ancillary Services, and installed capacity including installed reserves. Electric Rate Schedule - Also often called a tariff, a statement of the electric rate and the terms and conditions governing its application, including attendant contract terms and conditions that have been accepted by a regulatory body with appropriate oversight authority. See also tariff. Electric System Losses - Total electric energy losses in the electric system. The losses consist of transmission, transformation, and distribution losses between supply sources and delivery points. Electric energy is lost primarily due to heating of transmission and distribution elements. Electric Utility - A corporation, person, agency, authority, or other legal entity or instrumentality that owns or operates facilities for the generation, transmission, distribution, or sale of electric energy primarily for use by retail customers and is defined as a utility under the statutes and rules by which it is regulated. Types of Electric Utilities include investor-owned, cooperatively owned,

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and government-owned (federal agency, crown corporation, state, provincials, municipals, and public power districts). This term includes the Tennessee Valley Authority, but does not include other Federal power marketing agency (from EPAct). Element - Any electric device with terminals that may be connected to other electric devices, such as a generator, transformer, circuit, circuit breaker, or bus section. Emergency - Any abnormal system condition that requires automatic or immediate manual action to prevent or limit loss of transmission facilities or generation supply that could adversely affect the reliability of the electric system. End User - A retail customer of a natural gas or electricity product or service. End-use Services - The provision of energy, power and related services, such as energy efficiency or on-site generation, to the ultimate consumer. Energy - The capacity for doing work. Electrical energy is usually measured in kilowatt-hours, while heat energy is usually measured in British thermal units. Energy Charge - That portion of the charge for electric service based upon the electric energy (kWh) consumed or billed. Energy Efficiency - The act of using less energy/electricity to perform a given function, as distinguished from conservation, which implies accepting less. Energy efficiency efforts differ from DSM programs in that the latter are focused on impacting the peak rate of usage, as versus the quantity of energy used to perform a function. Many people use these terms interchangeably, which is often incorrect. Energy Imbalance Service - Provides energy correction for any hourly mismatch between a transmission customer's energy supply and the demand served. Energy Service Company - While initially applied to those firms performing energy efficiency upgrades, now (in some states) defined to include those who merely supply retail energy. Often abbreviated as ESCo or ESCO. See also ESCo. Energy Source - The primary source that provides the power that is converted to electricity through chemical, mechanical, or other means. Energy sources include coal, petroleum and petroleum products, gas, water, uranium, wind, sunlight, and geothermal heat. EPA - The Environmental Protection Agency. A federal agency charged with protecting the environment. EPAct - The Energy Policy Act of 2005 addresses a wide variety of energy issues. This federal legislation creates a new class of power generators, exempt wholesale generators (EWGs), that are exempt from the provisions of the Public Utilities Holding Company Act of 1935 and grants the authority to FERC to order and condition access by eligible parties to the interconnected transmission grid. It also mandated efficiency standards for various devices (such as light bulbs) and reductions in energy use in federal facilities. ESCo (Energy Service Company) - A company that offers to reduce a client's energy cost, often by taking a share of such reduced costs as repayment for installing and financing such upgrades. In some states, ESCos are also suppliers of energy. Estimated Usage - Customer usage based on history rather than meter readings.

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Expenditure - The incurrence of a liability to obtain an asset or service. Facility - An existing or planned location or site at which prime movers, electric generators, and/or equipment for converting mechanical, chemical, and/or nuclear energy into electric energy are situated, or will be situated. A facility may contain more than one generator of either the same or different prime mover type. For a cogenerator, the facility includes the industrial or commercial process. Fault - An event occurring on an electric system such as a short circuit, a broken wire, or an intermittent connection. Federal Energy Regulatory Commission (FERC) - The federal agency regulating price, terms and conditions of power sold in interstate commerce and that of all transmission services. FERC is the federal counterpart to state utility regulatory commissions (often called PUCs). FERC - See Federal Energy Regulatory Commission. Fire Wall - The line of demarcation separating residential and small commercial customers from all other customers preventing the shifting of costs between customer classes as a result of special rate discounts or other restructuring activities. Firm Gas - Gas sold on a continuous and generally long-term contract. Firm Power - Power or power producing capacity intended to be available at all times during the period covered by a guaranteed commitment to deliver, even under adverse conditions. Firm Purchase - A purchase of electricity or natural gas by one utility from another under contract, arranged in advance of delivery. Firm Transmission Rights (FTR) - PJM Interconnection (ISO) term for transmission congestion contract; also called fixed transmission rights (FTR) or financial congestion rights (FCR) by some. Firm Transmission Service - Point-to-point transmission service that is reserved and/or scheduled for a term of one year or more and that is of the same priority as that of the Transmission Provider's firm use of the transmission system. Firm Transmission service that is reserved and/or scheduled for a term of less than one year shall be considered Short-Term Firm Transmission Service for the purposes of service liability. First Notice Day - The first day on which a notice of intent to deliver the actual commodity or security can be given to the clearinghouse by the party that sold the contract. Fixed Cost - A set cost, under terms of contract, even if no energy was produced. Fixed Transmission Rights (FTR) - The PJM Interconnection (ISO) name for transmission congestion contracts (TCC). Forecast - Predicted demand for electric power. A forecast may be short term (e.g., 15 minutes) for system operation purposes, long-term (e.g., five to 20 years) for generation planning purposes, or for any range in between. Forward Price Curve - A set of commodity prices typically based on the market prices for futures available at a given point in time.

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Forwards - A forward is a commodity bought and sold for delivery at some specific time in the future. It is differentiated from futures markets by the fact that a forward contract is customized, non-exchange traded, and a non-regulated hedging mechanism. Fossil Fuel - Any naturally occurring organic fuel, such as petroleum, coal, and natural gas. Fossil-Fuel Plant - A plant using coal, petroleum, or gas as its source of energy. FPA Federal Power Act of 1935 - Established guidelines for federal regulation of interstate energy sales. It is the primary statute governing FERC regulation of the electric sector. Frequency - Rate of variation of voltage and current, typically 60.0 Hertz (i.e., cycles per second), except during a time correction. FTR - Fixed transmission rights; the PJM name for transmission congestion contracts (TCC) Fuel - Any substance that can be burned to produce heat; also, materials that can be fissioned in a chain reaction to produce heat. Fuel Expenses - These costs include the fuel used in the production of steam or driving another prime mover for the generation of electricity. Other associated expenses include unloading the shipped fuel and all handling of the fuel up to the point where it enters the first bunker, hopper, bucket, tank, or holder in the boiler house structure. Functional Unbundling - The functional separation of generation, transmission, and distribution transactions within a vertically integrated utility without selling or spinning off these functions into separate companies. See also divestiture. Futures Contract - A standardized financial agreement for the purchase or sale of a commodity or product at a specified price that is traded in an open auction under the rules of an exchange and that requires delivery on or settlement through the sale or purchase of an offsetting contract by a specified future date. Futures Market - Arrangement through a contract for the delivery of a commodity at a future time, place, and price specified at the time of purchase. The price is based on an auction or market basis. Futures are a standardized, exchange-traded, and government-regulated hedging tool. Gas - Typically natural gas (which consists primarily of methane); a fuel burned by boilers and by internal combustion engines for electric generation. May also include manufactured, waste and coal gas. Gas Turbine Plant - A plant in which the prime mover is a gas turbine. A gas turbine consists typically of an axial-flow air compressor, one or more combustion chambers, where liquid or gaseous fuel is burned and the hot gases are passed to the turbine and where the hot gases expand to drive the generator and are then used to run the compressor. Generating Unit - Any combination of physically connected generator(s), reactor(s), boiler(s), combustion turbine(s), or other prime mover(s) operated together to produce electric power. Generation (Electricity) - The process of producing electrical energy from other forms of energy; also, the amount of electric energy produced, usually expressed in kilowatt-hours (kWh) or megawatt hours (MWh).

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Generation, Gross - The electrical output at the terminals of the generator, usually expressed in megawatts (MW). Generation, Net - Gross generation minus station service or unit service power requirements, usually expressed in megawatts (MW). Generation Dispatch and Control - Aggregating and dispatching (i.e., directing to specific locations and/or loads) generation from various generating facilities, providing backup and reliability services. Generator - A machine that converts mechanical energy into electrical energy. Geothermal Plant - A plant using heat generated from within the earth in which the prime mover is a steam turbine. The turbine is driven either by steam produced from hot water or by natural steam found at various depths beneath the earth's surface. The energy is extracted by drilling into pressurized areas and/or pumping fluids that transfer such heat to the turbine. Gigawatt (GW) - One billion watts. Gigawatt-hour (Gwh) - One billion watt-hours. Greenhouse Effect - The increasing mean global surface temperature of the earth caused by gases in the atmosphere (including carbon dioxide, methane, nitrous oxide, ozone, and chlorofluorocarbon). The greenhouse effect allows solar radiation to penetrate but absorbs the infrared radiation returning to space. Green Markets/Marketing - Sales and purchases of power from renewable or otherwise environmentally desirable resources and efficiency services. Grid - A system of interconnected power lines and generators that is managed so that the generators are dispatched as needed to meet the requirements of the customers connected to the grid at various points. Heating, Ventilating and Air Conditioning (HVAC) - The major components of any building construction and occupancy conditions for the ambient air. Hedging Contracts - Contracts which establish future prices and quantities of electricity independent of the short-term market. Derivatives may be used for this purpose. See Contracts for Differences, Forwards, Futures Market, and Options. High - The highest price of the day of trading for a particular stock or commodity. Host Control Area (HCA) - A Control Area that confirms and implements scheduled Interchange for a Transmission Customer that operates generation or serves customers directly within the Control Area's metered boundaries. The Control Area within whose metered boundaries a commonly owned unit or terminal is physically located. Hourly Metering - A type of interval metering where the measurement or recording of customer usage is collected in 60 minute intervals. The competitive metering model is based upon the implementation of hourly metering of customers or the application of load profiles, which average customer use over hourly periods. Hourly Non-Firm Transmission Service - Point-to-point transmission that is scheduled and paid for on an as-available basis and is subject to interruption.

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Hub - Point at which gas or electricity may be re-routed into major interstate pipelines or transmission lines; pricing for either commodity is typically based at a hub, with transportation to the customer's utility being an additional charge. Hydroelectric Plant - A plant in which the turbine generators are driven by falling water. Imbalance - A condition where the generation and interchange schedules do not match demand.. Incremental Energy Cost - The additional cost that would be incurred by producing or purchasing the next available unit of electrical energy above the current base cost. Independent Power Producers (IPP) - As used in NERC reference documents and reports, any entity that owns or operates an electricity generating facility that is not included in an electric utility's rate base. This term includes, but is not limited to, cogenerators and small power producers and all other non-utility electricity producers, such as exempt wholesale generators who sell electricity. Independent System Operator (ISO) - A neutral, independent, and (typically non-profit) organization with no financial interest in generating facilities that administers the operation and use of the transmission system. ISOs exercise final authority over the dispatch of generation to preserve reliability and facilitate efficiency, ensure non-discriminatory access, administer transmission tariffs, ensure the availability of ancillary services, and provide information about the status of the transmission system and available transmission capacity. Under some proposals, an ISO may make some transmission investment decisions. New Jersey is covered by the PJM ISO. Backup Supply Service - Provides capacity and energy to a transmission customer, as needed, to replace the loss of its generation sources and to cover that portion of demand that exceeds the generation supply for more than a short time. Dynamic Scheduling Service - Provides the metering, telemetering, computer software, hardware, communications, engineering, and administration required to electronically move a transmission customer's generation or demand out of the Control Area to which it is physically connected and into a different Control Area. Real Power Loss Service - Compensates for losses incurred by the Host Control Area(s) as a result of the interchange transaction for a transmission customer. Federal Energy Regulatory Commission's Order No. 888 requires that the transmission customer's service agreement with the Transmission Provider identify the entity responsible for supplying real power loss. Restoration Service - Provides an offsite source of power to enable a Host Control Area to restore its system and a transmission customer to start its generating units or restore service to its customers if local power is not available. Interconnected System - A system consisting of two or more individual electric systems that normally operate in synchronism and have connecting tie lines. Interconnection - When capitalized, any one of the five major electric system networks in North America: Eastern, Western, ERCOT, Quebec, and Alaska. When not capitalized, the facilities that connect two systems or Control Areas. Additionally, an interconnection refers to the facilities that connect a non-utility generator to a Control Area or system.

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Interdepartmental Service (Electric) - Interdepartmental service includes amounts charged by the electric department at tariff or other specified rates for electricity supplied by it to other utility departments. Interface - The specific set of transmission elements between two areas or between two areas comprising one or more electrical systems. Intermediate Load (Electric System) - The range from base load to a point between base load and peak. This point may be the midpoint, a percent of the peak load, or the load over a specified time period. Internal Combustion Plant - A plant in which the prime mover is an internal combustion engine. An internal combustion engine has one or more cylinders in which the process of combustion takes place, converting energy released from the rapid burning of a fuel-air mixture into mechanical energy. Diesel or gas-fired engines are the principal types used in electric plants. The plant is usually operated during periods of high demand for electricity. Interruptibility - The right of a utility to interrupt power delivery to a customer based on an existing contract, tariff, or agreement, typically during a system emergency or when wholesale market prices exceed a defined level. Interruptible Gas - Gas sold to customers with a provision that permits curtailment or cessation of service at the discretion of the distributing company under certain circumstances, as specified in the service contract. Interruptible Load - Refers to program activities that, in accordance with contractual arrangements, can interrupt consumer load at times of seasonal peak load by direct control of the utility system operator or by action of the consumer at the direct request of the system operator. It usually involves commercial and industrial consumers. In some instances the load reduction may be affected by direct action of the system operator (remote tripping) after notice to the consumer in accordance with contractual provisions. Interval Meter - A meter that measures usage in time increments shorter than those used in billing (e.g., a month). Often synonymous with "hourly meter," "hourly interval meter," or "time-differentiated meter." Interval Metering - Interval metering is the measurement of customer energy usage by fixed time periods or intervals. Typically, the interval time period is 15 minutes, but can vary according to the customer and/or T&D system needs. Today, interval metering is provided to commercial and industrial customers and some residential customers. In the future, in an unbundled environment, the residential market may require more frequent interval measurements. Invitation to Bid (ITB) - Much like a Request for Proposals (RFP) except that the only item generally requested is a price, not a statement of services involving negotiation. IOU (investor owned utility) - A company, owned by stockholders for profit, that provides utility services. A designation used to differentiate a utility owned and operated for the benefit of shareholders from municipally owned and operated utilities and rural electric cooperatives. IPP (Independent Power Producer) - A private entity that operates a generation facility and sells power to electric utilities for resale to retail customers.

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ISO (Independent System Operator) - A neutral operator responsible for maintaining instantaneous balance of the grid system. The ISO performs its function by controlling the dispatch of flexible plants to ensure that loads match resources available to the system. Jurisdictional - Utilities, ratepayers and regulators (and impacts on those parties) that are subject to state regulation in a state considering restructuring. kW (Kilowatt) - One thousand watts KWh (kilowatt-hour) – The basic unit of electric energy equal to one kilowatt of power supplied to, or taken from, an electric circuit steadily, for one hour. Also known as consumption. Kirchhoff's Law - A description regarding how power moves among multiple electric paths (such as transmission lines) based on their equivalent resistance, regardless of any contractual or other theoretical arrangement. Such movement may result in parallel loop flows that can hinder or complicate the transfer of power from one location to another. kVar (kilovar) – The unit of measure of reactive power – the power supplied to most types of electromagnetic equipment, such as motors. Lambda - Also called "system lambda," a term describing the cost of the next kilowatt hour that could be produced from dispatchable units on an electric supply system. LBMP - See Locational Market Pricing. LDC (Local Distribution Company) - One of the following local electric distribution companies serving New Jersey: PSE&G, Conectiv (Atlantic City Electric Co. - ACE), or JCP&L (GPU). Liability - An amount payable in dollars or by future services to be rendered. Liquidity - How easily assets (such as forward contracts) may be converted to cash. LMP - See Locational Market Pricing. Load (Electric) - The amount of electric power delivered or required at any specific point or points on a system, as demanded by an electricity-consuming system, or systems. Load Cycle - The normal pattern of demand over a specified time period associated with a device or circuit. Load Data - Electric power consumption (kWh) as measured in one-hour intervals. Load Duration Curve - A non-chronological, graphical summary of demand levels with corresponding time durations using a curve, which plots demand magnitude (power) on one axis and percent of time that the magnitude occurs on the other axis. Often called a histogram. Load Factor - A measure of the degree of uniformity of demand over a period of time, equivalent to the ratio of average demand to peak demand expressed as a percentage. It is calculated by dividing the total energy provided by a system during the period by the product of the peak demand during the period and the number of hours in the period. Load Following - An electric system's process of regulating its generation to follow the changes in its customers' demand.

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Load Forecast - An estimate of the level of future energy needs. Load Management - Utility activities designed to influence the timing and amount of electricity that customers may use. Load Profile - Electric power consumption (kWh) as measured in one-hour intervals. Load Serving Entity (LSE) - See Local Distribution Company. Load Shedding - The process of deliberately removing (either manually or automatically) pre-selected customer demand from a power system in response to an abnormal condition to maintain the integrity of the system and minimize overall customer outages. Load Shifting - Demand-side management programs designed to encourage consumers to move their use of electricity from on-peak times to off-peak times. Local Distribution Company (LDC) - The utility company (perhaps, in the future, including power marketers) that provides the distribution, customer, and energy services for natural gas and electricity. Also called Utility Distribution Company (UDC), or Load Serving Entity (LSE). Locational Market Pricing - Often abbreviated LMP, it is the same as Locational-Based Market Pricing (LBMP), which is a pricing mechanism for equalizing the cost of power in an area limited by transmission constraints by charging more for transmission to customers receiving power from a lower cost provider. The goal is to avoid major price differentials due purely to access to limited transmission. Very high LMP sends a price signal that transmission capacity, and/or local generating capacity should be expanded. Low - The lowest price of the day of trading for a particular stock or commodity. LSE - See Load Serving Entity and Local Distribution Company.

Margin - The difference between net capacity resources and net internal demand. Margin is usually expressed in megawatts (MW). Marginal Cost - In the utility context, the cost to the utility of providing the next (marginal) kilowatt-hour of electricity, irrespective of sunk costs. Market-Based Price - A price set by the mutual decisions of many buyers and sellers in a competitive market. Marketer - An entity that has the authority to take title to electrical power generated by itself or another entity and re-sell that power at market-based rates. Also, an agent for generation projects who markets power on behalf of the generator. The marketer may also arrange transmission, firming or other ancillary services as needed. Though a marketer may perform many of the same functions as a broker, the difference is that a marketer represents the generator while a broker acts as a middleman. Maximum Demand - The greatest of all demands of the load that has occurred within a specified period of time. Mcf - One thousand cubic feet. MDSP (Meter Data Service Providers) - In the competitive metering model, an MDSP is an entity that collects, translates and/or analyzes meter data for billing and related purposes.

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Megawatt (MW) - One million watts. Megawatt hour (MWH) - One million watt-hours.. Metering - The methods of applying devices that measure and register the amount and direction of electrical quantities with respect to time. Mmcf - One million cubic feet. Monitoring & Verification (M&V) - A series of processes for determining the usage and savings resulting from installation and operation of energy efficiency measures. Monte Carlo technique - Mathematical method for assessing risk probabilities. MSP (Meter Service Providers) - MSPs are entities that physically handle meters for purposes such as installation, maintenance, setting and upgrading internal parameters and removal. Municipal Utility (MUNI) - A provider of utility services owned and operated by a municipal government. A MUNI may or may not own generation, transmission, or distribution facilities. NAERO (North American Electric Reliability Organization) - Concept that NERC could be given legal control as a non-regulated entity to formulate and enforce transmission rules, chartered by FERC. NARUC (The National Association of Regulatory Utility Commissioners) - An advisory council composed of governmental agencies of the fifty States, the District of Columbia, Puerto Rico and the Virgin Islands engaged in the regulation of utilities and carriers. "The chief objective is to serve the consumer interest by seeking to improve the quality and effectiveness of public regulation in America." Natural Gas - A naturally occurring mixture of hydrocarbon and nonhydrocarbon gases found in porous geological formations beneath the earth's surface, often in association with petroleum. The principal constituent is methane. Natural Gas Act (NGA) - Federal law enacted in 1938 that established FERC's authority to regulate interstate pipelines. Natural Gas Policy Act (NGPA) - Federal law that updated the NGA and set guidelines for deregulation of new gas supplies and continued regulation of old supplies. NERC - See North American Electric Reliability Council. Net Capacity Resource - The total owned capacity, plus capacity available from independent power producers, plus the net of total capacity purchases and sales, less the sum of inoperable capacity, and less planned outages. Net Generation - Gross generation minus plant use from all electric utility owned plants. The energy required for pumping at a pumped storage plant is regarded as plant use and must be deducted from the gross generation. See also Gross generation. Net Internal Demand - The metered net outputs of all generators within a system, plus the metered line flows into the system, less the metered line flows out of the system, less Direct Control Load Management and, less Interruptible Demand.

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Net Summer Capability - The steady hourly output, which generating equipment is expected to supply to system load exclusive of auxiliary power, as demonstrated by tests at the time of summer peak load. Net Winter Capability - The steady hourly output which generating equipment is expected to supply to system load exclusive of auxiliary power, as demonstrated by tests at the time of winter peak load. Network Service - Ability to move power anywhere within a given region (typically a NERC region or ISO) without regard to exact origin or end point. New Jersey BPU – The NJ Board of Public Utilities charged with overseeing energy regulation and deregulation in the state. New Gas - Gas produced from new formations and fields or drilling after April 1977. NMR (Network Meter Reading) - NMR is a type of AMR in which a network is used to collect, transmit and analyze meter data. Some advanced meter functions may be implemented in the network rather than in the meter at the Service End Point. See also AMR (Automatic Meter Reading). Nonbypassable Charge - Any of a number of charges that would apply to all end-users of electricity, and could not be bypassed except by totally disconnecting from the grid. Includes systems benefits charges, public goods charges, wires charges, access charges, and the like. Typically is a fee of some kind for use of the wires or access to the grid. Non-Core Customer - A customer who has several fuel choices and does not rely only on a utility as a resource for continued heat and other energy services Non-Firm Power - Power or power producing capacity supplied or available under a commitment having limited or no assured availability. Non-Firm Transmission Service - Point-to-point transmission service that is reserved and/or scheduled on an as-available basis and is subject to interruption. Non-firm Transmission Service is available on a stand-alone basis as either Hourly Non-firm Transmission Service or Short-Term Non-firm Transmission Service. NOPR (Notice of Proposed Rulemaking) - A designation used by the FERC for some of its dockets. North American Electric Reliability Council (NERC) - A council formed in 1968 by the electric utility industry to promote the reliability and adequacy of bulk power supply in the electric utility systems of North America. NERC consists of eleven regional reliability councils and encompasses essentially all the power regions of the contiguous United States, Canada, and Mexico. The NERC Regions are: ASCC - Alaskan System Coordination Council ECAR - East Central Area Reliability Coordination Agreement ERCOT - Electric Reliability Council of Texas MAIN - Mid-America Interconnected Network MAAC - Mid-Atlantic Area Council MAPP - Mid-Continent Area Power Pool NPCC - Northeast Power Coordinating Council SERC - Southeastern Electric Reliability Council SPP - Southwest Power Pool WSCC - Western Systems Coordinating CouncilFPCC - Florida Power Coordinating Council Nuclear Fuel - Fissionable materials that have been enriched to such a composition that, when placed in a nuclear reactor, will support a self-sustaining fission chain reaction, producing heat in a controlled manner for process use.

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Nuclear Power Plant - A facility in which heat produced in a reactor by the fissioning of nuclear fuel is used to drive a steam turbine. NUG (non-utility generator) - A generation facility owned and operated by an entity who is not defined as a utility in that jurisdictional area. Obligation to Serve - The obligation of a utility to provide electric service to any customer who seeks that service and is willing to pay the rates set for that service. Traditionally, utilities have assumed the obligation to serve in return for an exclusive monopoly franchise. Off Peak - Those hours or other periods defined by contract or other agreements or guides as periods of lower electrical demand. Off-Peak Gas - Gas that is to be delivered and taken on demand when demand is not at its peak. Ohm - The unit of measurement of electrical resistance. The resistance of a circuit in which a potential difference of 1 volt produces a current of 1 ampere. On Peak - Those hours or other periods defined by contract or other agreements or guides as periods of higher electrical demand. Open - The price at which the commodity or security starts a trading day. Open Architecture – Standardization, documentation, and publication of meter system parameters that allow data to be exchanged among authorized parties from an access point to the point at which data are of billing quality. Generally used in discussions of meter standards that allow any supplier of power to accept data from any meter that follows an "open architecture" specification, thus avoiding proprietary meter standards that could obsolete a customer's metering should he wish to switch to a provider using a different meter spec. Operating Criteria - The fundamental principles of reliable interconnected systems operation. Opt Out - A right of an individual end-use customer to decide not to buy from a given aggregator. Typically used in situations where one or more aggregators are identified as the primary suppliers in an area, as in the case of a standard offer, a competition for a competitive franchise, a community access entity, or a co-op. Outage - The period during which a generating unit, transmission line, or other facility is out of service. Forced Outage The removal from service availability of a generating unit, transmission line, or other facility for emergency reasons or a condition in which the equipment is unavailable due to unanticipated failure. Forced Outage Rate - The hours a generating unit, transmission line, or other facility is removed from service, divided by the sum of the hours it is removed from service, plus the total number of hours the facility was connected to the electricity system expressed as a percent. Maintenance Outage - The removal of equipment from service availability to perform work on specific components that can be deferred beyond the end of the next weekend, but requires the equipment be removed from service before the next planned outage. Typically, a Maintenance Outage may occur anytime during the year, have a flexible start date, and may or may not have a predetermined duration.

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Planned Outage - Removing the equipment from service availability for inspection and/or general overhaul of one or more major equipment groups. This outage usually is scheduled well in advance.

Pancake - The addition of multiple transmission charges ("pancaking") to the cost of power as it passes through many control areas. Parallel Path Flow - As defined by NERC, this refers to the flow of electric power on an electric system's transmission facilities resulting from scheduled electric power transfers between two other electric systems. (Electric power flows on all interconnected parallel paths in amounts inversely proportional to each path's resistance.) Peaking Capacity - Capacity of generating equipment normally reserved for operation during the hours of highest daily, weekly, or seasonal loads. Some generating equipment may be operated at certain times as peaking capacity and at other times to serve loads on an around-the-clock basis. Peak Load Plant - A plant usually housing old, low-efficiency steam units, gas turbines, diesels, or pumped storage hydroelectric equipment normally used during the peak-load periods. Petroleum - A mixture of hydrocarbons existing in the liquid state found in natural underground reservoirs often associated with gas. Petroleum includes fuel oil No. 2, No. 4, No. 5, No. 6; topped crude; kerosene; and jet fuel. Phasor Diagrams – Diagrams that show all vectors for three phase current and voltage. PJM - Name of wholesale power pool that serves most of Pennsylvania, Maryland, Delaware, and New Jersey; the PJM Interconnection is the official name of the ISO covering that region. Planned Generator - A proposal by a company to install electric generating equipment at an existing or planned facility or site. The proposal is based on the owner having obtained (1) all environmental and regulatory approvals, (2) a signed contract for the electric energy, or (3) financial closure for the facility. Planning (System) - The process by which the performance of the electric system is evaluated and future changes and additions to the bulk electric systems are determined. Planning Guides Good planning practices and considerations that Regions, subregions, power pools, or individual systems should follow. The application of Planning Guides may vary to match local conditions and individual system requirements. Plant - A facility at which are located prime movers, electric generators, and auxiliary equipment for converting mechanical, chemical, and/or nuclear energy into electric energy. A plant may contain more than one type of prime mover. Electric utility plants exclude facilities that satisfy the definition of a Qualifying Facility under the Public Utility Regulatory Policies Act of 1978. Point(s) of Delivery - Point(s) of interconnection on the transmission or distribution system where capacity and/or energy will be made available to the Receiving Party. The Point(s) of Delivery shall be specified in the Customer's Service Agreement. Point(s) of Receipt - Point(s) of interconnection on the Transmission Provider's Transmission System where capacity and/or energy will be made available to the Transmission Provider by the Delivering Party. This point could include an interconnection with another system or generator bus bar. The Point(s) of Delivery shall be specified in the Service Agreement.

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Point-to-Point Transmission Service - The reservation and/or transmission of energy on either a firm basis and/or a non-firm basis from Point(s) of Receipt to Point(s) of Delivery, including any Ancillary Services that are provided by the Transmission Provider in conjunction with such service. Point-to-Point Transmission Service Tariff - The Transmission Provider's Point-to-Point Transmission Service Tariff as such tariff may be amended and/or superseded from time to time. POLR (Provider of Last Resort) – Provider of electric service that is required to serve any customer requesting service in accordance with the Commission's consumer protection rules and statutes. The POLR provides service to customers that do not choose an ESCO, customer that choose to leave service from a ESCO, and customers to whom an ESCO will not or can not provide service. Power - The rate at which energy is transferred. Electrical energy is usually measured in watts. Also used for a measurement of capacity. Apparent Power - The product of the volts and amperes. It comprises both real and reactive power, usually expressed in kilovolt-ampere (kVA) or megavoltamperes (MVA). Reactive Power - The portion of electricity that establishes and sustains the electric and magnetic fields of alternating-current equipment. Reactive power must be supplied to most types of magnetic equipment, such as motors and transformers. It also must supply the reactive losses on transmission facilities. Reactive power is provided by generators, synchronous condensers, or electrostatic equipment such as capacitors and directly influences electric system voltage. It is usually expressed in kilovars (kvar) or megavars (Mvar). Real Power - The rate of producing, transferring, or using electrical energy, usually expressed in kilowatts (kW) or megawatts (MW). Power Authorities - Quasi-governmental agencies that perform all or some of the functions of a public utility. Power Marketers - Business entities engaged in buying and selling electricity, but do not own generating or transmission facilities. Power marketers, as opposed to brokers, take ownership of the electricity and are involved in interstate trade. These entities file with FERC for status as a power marketer. Power Pool - An entity established to coordinate short-term operations to maintain system stability and achieve least-cost dispatch for two or more utilities. The dispatch provides backup supplies, short-term excess sales, reactive power support, and spinning reserve. Historically, some of these services were provided on an unpriced basis as part of the members' utility franchise obligations. Coordinating short-term operations includes the aggregation and firming of power from various generators, arranging exchanges between generators, and establishing (or enforcing) the rules of conduct for wholesale transactions. The pool may own, manage and/or operate the transmission lines ("wires") or be an independent entity that manages the transactions between entities. Often, the power pool is not meant to provide transmission access and pricing, or settlement mechanisms if differences between contracted volumes among buyers and sellers exist. Power pools are expected to be converted to, or supplanted by, ISOs and/or transcos. Prepayment Meters - Prepayment meters are electric meters that allow the customer to pay a specified amount of money in advance of service to guarantee some level of minimum service while allowing low-income customers to keep within their budget. Such meters may be

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accompanied by a discount reflecting the lower level of service and reduced collection costs to the utility. Price - The amount of money or consideration-in-kind for which a service is bought, sold, or offered for sale. Price Sensitive Load - Load that will curtail usage in real-time in response to high prices or in exchange for a payment. Prime Mover - The engine, turbine, water wheel, or similar machine that drives an electric generator; or, for reporting purposes, a device that converts energy to electricity directly (e.g., photovoltaic solar and fuel cells). Profit - The income remaining after all business expenses are paid. Public Authority Service to Public Authorities - Public authority service includes electricity supplied and services rendered to municipalities or divisions or agencies of State or Federal governments, under special contracts or agreements or service classifications applicable only to public authorities. Public Good - A good (or a service) that will not be produced and delivered if we rely solely on the free market. These are called public goods by economists because they are consumed by the public, and their use cannot be restricted to the benefit of a single buyer or group of buyers. Economists call this characteristic "non-excludability." There is no way to produce a public good without producing a value to society at large. This in turn makes it all the more unlikely that an individual would pay out of his own pocket to see that the good is produced. Public Interest Goals - Public interest goals of electric utility regulation include: 1) inter-and intra-class and intergenerational equity); 2) the equal treatment of equals (horizontal equity); 3) balancing long- and short-term goals that have the potential to affect intergenerational balance; 4) protecting against the abuse of monopoly power; and 5) general protection of the health and welfare of the citizens of the state, nation, and world. Environmental and other types of social costs are subsumed under the equity and health and welfare responsibilities. Publicly Owned Utilities (POU) - Municipal utilities (utilities owned by branches of local government) and/or co-ops (utilities owned cooperatively by customers). Public Utility - Utility operated by a non-profit governmental or quasi-governmental entity. Public utilities include municipal utilities, cooperatives, and power marketing authorities. Public Utility Commission (PUC) - Generic term for a state agency holding regulatory power over energy pricing, and issues related thereto. Purchased Power Adjustment - A clause in a rate schedule that provides for adjustments to the bill when energy from another electric system is acquired and it varies from a specified unit base amount. PURPA - The Public Utility Regulatory Policy Act of 1978. Among other things, this federal legislation requires utilities to buy electric power from private qualifying facilities, at an avoided cost rate. This avoided cost rate is equivalent to what it would have otherwise cost the utility to generate or purchase that power themselves. Utilities must further provide customers who choose to self-generate a reasonably priced back-up supply of electricity.

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Rate Base - The value of property upon which a utility is permitted to earn a specified rate of return as established by a regulatory authority. The rate base generally represents the book value of property used by the utility in providing service and may be calculated by any one or a combination of the following accounting methods: fair value, prudent investment, reproduction cost, or original cost. Depending on which method is used, the rate base includes cash, working capital, materials and supplies, and deductions for accumulated provisions for depreciation, contributions in aid of construction, customer advances for construction, accumulated deferred income taxes, and accumulated deferred investment tax credits. Ratemaking Authority - A utility commission's legal authority to fix, modify, approve, or disapprove rates, as determined by the powers given the commission by a State or Federal legislature. Rating - The operational limits of an electric system, facility, or element under a set of specified conditions. Real-Time Pricing - Often abbreviated as RTP, it is the pricing of electricity based on the cost of the electricity available for use at the time the electricity is demanded by the customer. As distinguished from market-based pricing, RTP is usually applied to that power demand above a defined base usage for a given customer, and not to all power consumed by that customer. RTP may also encompass charges for transmission and distribution whereas market-based rates cover only the energy (and possibly capacity) portion of an electric bill. Recallability - The right of a transmission provider to interrupt all or part of a transmission service for any reason, including economic, that is consistent with Federal Energy Regulatory Commission policy and the transmission provider's transmission service tariffs or contract provisions. Receipts - Purchases of fuel. Receiving Party - The entity receiving the capacity and/or energy transmitted by the Transmission Provider to the Point(s) of Delivery. Region - One of the NERC Regional Reliability Councils or Affiliate. Regional Reliability Council - One of eleven Electric Reliability Councils that form the North American Electric Reliability Council (NERC). Regional Transmission Group (RTG) - Voluntary organization (chartered by FERC) of transmission owners, transmission users, and other entities interested in coordinating transmission planning and expansion and use on a regional and interregional basis. ISOs are considered RTGs, but RTG as a term is being supplanted by Regional Transmission Organization (RTO) as a generic name that includes ISOs and transcos. Regional Transmission Organization - Term coined by FERC Chairman Hoecker in 1998 to describe any of several types of transmission overseers, including ISOs, ISAs, RTGs, and transcos. Regulation - The government function of controlling or directing economic entities through the process of rulemaking and adjudication. Reliability - The degree of performance of the elements of the bulk electric system that results in electricity being delivered to customers within accepted standards and in the amount desired. Reliability may be measured by the frequency, duration, and magnitude of adverse effects on the

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electric supply. Electric system reliability can be addressed by considering two basic and functional aspects of the electric system, Adequacy and Security. Reliability Criteria - Principles used to design, plan, operate, and assess the actual or projected reliability of an electric system. Renewable Energy Certificates (REC) –Renewable Energy Certificates are tradable units that represent the commodity formed by unbundling the environmental attributes of a unit of renewable energy from the underlying electricity. Under most programs, one renewable energy certificate would be equivalent to the environmental attributes of one (1) mWh of electricity from a renewable generation source. These can also be in lots of 150,000 kWhs each. Renewable Portfolio Standards - The standards for renewable energy that must be met pursuant to the provisions of the Electric Discount and Energy Competition Act (N.J.S.A. 48:3 - 49 et seq.). Pursuant to these standards, each electric power supplier or basic generation service provider serving retail customers in the State of New Jersey shall include in its power portfolio electricity generated from renewable energy sources. The standards are designed to encourage the development of renewable sources of electricity and new, cleaner generation technology; minimize the environmental impact of emissions from electric generation; reduce possible transport of emissions and minimize any adverse environmental impact from deregulation of energy generation. Renewable Resources - Renewable energy resources are naturally replenishable, but flow-limited. They are virtually inexhaustible in duration but limited in the amount of energy that is available per unit of time. Some (such as geothermal and biomass) may be stock-limited in that stocks are depleted by use, but on a time scale of decades, or perhaps centuries, they can probably be replenished. Renewable energy resources include: biomass, hydro, geothermal, solar and wind and others. In the future they could also include the use of ocean thermal, wave, and tidal action technologies. Utility renewable resource applications include bulk electricity generation, on-site electricity generation, distributed electricity generation, non-grid-connected generation, and demand-reduction (energy efficiency) technologies. Request for Information (RFI) - See Request for Qualifications. Request for Proposal (RFP) - Document distributed by a customer seeking offerings and bids from suppliers of services. Sometimes also known as a Request for Quotes (RFQ). Request for Qualifications (RFQ) - Document distributed by a customer seeking delineation of credentials for suppliers of specific types of services. Sometimes also known as a Request for Information (RFI). Request for Quote - See Request for Proposal. Reregulation - The design and implementation of regulatory practices to be applied to the remaining regulated entities after restructuring of the vertically-integrated electric utility. The remaining regulated entities would be those that continue to exhibit characteristics of a natural monopoly, where imperfections in the market prevent the realization of more competitive results, and where, in light of other policy considerations, competitive results are unsatisfactory in one or more respects. Reregulation could employ the same or different regulatory practices as those used before restructuring. Residential - The residential sector is defined as private household establishments which consume energy primarily for space heating, water heating, air conditioning, lighting, refrigeration,

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cooking, and clothes drying. The classification of an individual consumer's account, where the use is both residential and commercial, is based on principal use. Residual Fuel Oil - The topped crude of refinery operation, includes No. 5 and No. 6 fuel oils as defined in ASTM Specification D396 and Federal Specification VV-F-815C; Navy Special fuel oil as defined in Military Specification MIL-F-859E including Amendment 2 (NATO Symbol F-77); and Bunker C fuel oil. Residual fuel oil is used for the production of electric power, space heating, vessel bunkering, and various industrial purposes. Imports of residual fuel oil include imported crude oil burned as fuel. Resource Efficiency - The use of smaller amounts of physical resources to produce the same product or service. Resource efficiency involves a concern for the use of all physical resources and materials used in the production and use cycle, not just the energy input. Response Rate: Restructuring - The reconfiguration of the vertically-integrated electric utility. Restructuring usually refers to separation of the various utility functions into individually-operated and -owned entities. Retail - Sales covering electrical energy supplied for residential, commercial, and industrial end-use purposes. Other small classes, such as agriculture and street lighting, also are included in this category. Retail Competition - A system under which more than one electric provider can sell to retail customers, and retail customers are allowed to buy from more than one provider. See also Direct Access. Retail Customer - Any customer receiving power for end usage on his side of the meter, and not for redistribution/resale to others. Retail Market - A market in which electricity and other energy services are sold directly to the end-use customer. Retail Service Company - A company that provides the ultimate consumer of electricity with end-use services such as power, energy efficiency services, metering and billing, on-site generation, and other unbundled services. Retail Supplier - An entity, other than the LDC, that can perform energy and customer service functions in a competitive environment, including provision of energy and assistance in the efficiency of its use. Revenue - The total amount of money received by a firm from sales of its products and/or services, gains from the sales or exchange of assets, interest and dividends earned on investments, and other increases in the owner's equity except those arising from capital adjustments. RTG - See Regional Transmission Group. RTO - See Regional Transmission Organization. Sales Customer - A customer who buys natural gas or electricity with a package of other services from a utility.

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Sales for Resale - Energy supplied to other electric utilities, cooperatives, municipalities, and Federal and State electric agencies for resale to ultimate consumers. Scheduled Losses - The scheduled power transfer to a transmission provider for compensation of losses incurred on that provider's transmission system due to a transfer of power between purchasing and selling entities. Scheduled Outage - The shutdown of a generating unit, transmission line, or other facility, for inspection or maintenance, in accordance with an advance schedule. Seasonal Gaming - Scheme to take advantage of a seasonal differential between market-based power pricing that remains low during a portion of the year and regulated utility pricing that is lower during the remainder of the year by switching between these two types of suppliers. Securitization - One method to handle stranded costs through the issuance of government-sponsored securities to pay utilities for such costs at an interest rate below that available to utilities, thereby possibly decreasing the overall cost to consumers. Payoff for such securities would come from transition charges attached to all electric bills stretched out over a longer period than if utilities were charging off stranded costs, thus potentially reducing the impact seen on individual electric bills. Self-Generation - A generation facility dedicated to serving a particular retail customer, usually located on the customer's premises. The facility may either be owned directly by the retail customer or owned by a third party with a contractual arrangement to provide electricity to meet some or all of the customer's load. SEP (Service End Points) – Destination points for electric service most often at the meter level, but that could be higher in the chain. Service Agreement - The initial agreement and any supplements thereto entered into by the a generation or transmission customer and the energy services provider. Short Ton - A unit of weight equal to 2,000 pounds (as versus a long ton, or tonne, which is 1,000 kilograms, or about 2,206 pounds). Slamming - The unauthorized switch of a Retail Supplier, or a change in supplier without the customer's knowledge or consent. Small Power Producer (SPP) - Under the Public Utility Regulatory Policies Act (PURPA), a small power production facility (or small power producer) generates electricity using waste, renewable (water, wind, and solar), or geothermal energy as a primary energy source. Fossil fuels can be used, but renewable resource must provide at least 75 percent of the total energy input. (See Code of Federal Regulations, Title 18, Part 292.) Special Contracts - Any contract that provides a utility service under terms and conditions other than those listed in the utility's tariffs. For example, an electric utility may enter into an agreement with a large customer to provide electricity at a rate below the tariffed rate in order to prevent the customer from taking advantage of some other option that would result in the loss of the customer's load (such as cogeneration or transmission bypass). This generally allows that customer to compete more effectively in their product market. Spot Markets or Spot Purchases - Any of a number of venues in which purchases and sales, as of electricity, are made by a large number of buyers and sellers, with new transactions being made continuously or at very frequent intervals. Typically, the phrase refers to a lightly or non-

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regulated market in which the prices, amounts, duration and firmness of the purchases and sales is publicly known, at least shortly after the transaction is completed, if not simultaneously. Spot purchases are often made by a user to fulfill a certain portion of energy requirements, to meet unanticipated energy needs, or to take advantage of low prices. Stable Prices - Prices that do not vary greatly over short time periods. Different customers value stability in different ways. Residential and small business customers typically prefer to have prices that do not vary more frequently than annually, or at most quarterly. Very large customers may find changing hourly spot prices to be "stable" enough for their uses. See also Variable Prices. Stability - The ability of an electric system to maintain a state of equilibrium during normal and abnormal system conditions or disturbances. Standby Facility - A facility that supports a utility system and is generally running under no load. It is available to replace or supplement a facility normally in service. Standby Service - Support service that is available, as needed, to supplement a consumer, a utility system, or to another utility if a schedule or an agreement authorizes the transaction. The service is not regularly used. Stocks - A supply of fuel accumulated for future use. This includes coal and fuel oil stocks at the plant site, in coal cars, tanks, or barges at the plant site, or at separate storage sites. Storage - Energy transferred from one entity to another entity that has the ability to conserve the energy (i.e., stored as water in a reservoir, coal in a pile, etc.) with the intent that the energy will be returned at a time when such energy is more usable to the original supplying entity. A common synonym for Storage is Energy Banking. See also Banking; Energy Exchange. Stranded Benefits - Public interest programs and goals which could be compromised or abandoned by a restructured electric industry. These potential stranded benefits might include environmental protection, fuel diversity, energy efficiency, low-income ratepayer assistance, and other types of socially beneficial programs. Substation - A facility for switching electrical elements, transforming voltage, regulating power, or metering. Supervisory Control - A form of remote control comprising an arrangement for the selective control of remotely located facilities by an electrical means over one or more communications media. Supplier - See Retail Supplier. Supply-Side - Activities conducted on the utility's side of the customer meter. Activities designed to supply electric power to customers, rather than meeting load though energy efficiency measures or on-site generation on the customer side of the meter. Surge - A transient variation of current, voltage, or power flow in an electric circuit or across an electric system. System - An interconnected combination of generation, transmission, and distribution components comprising an electric utility, an electric utility and independent power producer(s) (IPP), or group of utilities and IPP(s).

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System Benefits Charge - Any of a number of non-by-passable charges imposed to collect funds to cover the above-market costs of providing public goods (system benefits) that otherwise would be stranded. System Integration (of new technologies) - The successful integration of a new technology into the electric utility system by analyzing the technology's system effects and resolving any negative impacts that might result from its broader use. System Operator - An individual at an electric system control center whose responsibility it is to monitor and control that electric system in real time. Take a Position - Marketing term meaning purchasing and offering of a commodity for resale. Taking - Reducing the value of someone's property through government action without just compensation. Tariff - A document, approved by the responsible regulatory agency, listing the terms and conditions, including a schedule of prices, under which utility services will be provided. Telemetering - The process by which measurable electrical quantities from substations and generating stations are instantaneously transmitted using telecommunication techniques. Thermal Rating - The maximum amount of electrical current that a transmission line or electrical facility can conduct over a specified time period before it sustains permanent damage by overheating or before it violates public safety requirements. Time-of-Use (TOU) Rates - The pricing of electricity based on the estimated cost of electricity during a particular time block. Time-of-use rates are usually divided into three or four time blocks per twenty-four hour period (on-peak, mid-peak, off-peak and sometimes super off-peak) and by seasons of the year (summer and winter). Real-time pricing differs from TOU rates in that it is based on actual (as opposed to forecasted) prices which may fluctuate many times a day and are weather-sensitive, rather than varying with a fixed schedule. Top-down - Typical approach taken when unbundling rates, and the opposite of a bottom-up approach. Top-down implies examination of initially only the energy component of a utility rate, exclusive of transmission, distribution, customer service, metering, marketing, taxes, etc. The net result is that only the energy component is subjected to competition, instead of all aspects of the utility rate. A bottom-up approach involves an examination in the reverse order and should therefore be more comprehensive. Transco - See Transmission Company. Transmission - An interconnected group of lines and associated equipment for the movement or transfer of electric energy between points of supply and points at which it is transformed for delivery to customers or is delivered to other electric systems. Transmission Company - A privately owned firm whose primary asset and focus is the high-voltage transmission of power. Some ISOs may eventually become transcos in order to create a financial incentive to expand and better control transmission. Often called a transco. Transmission Constraints - Limitations on a transmission line or element that may be reached during normal or contingency system operations.

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Transmission-Dependent Utility - A utility that relies on its neighboring utilities to transmit to it the power it buys from its suppliers. A utility without its own generation sources, dependent on another utility's transmission system to get its purchased power supplies. Transmission Provider - Any public utility that owns, operates, or controls facilities used for the transmission of electric energy in interstate commerce. Transmission System (Electric) - An interconnected group of electric transmission lines and associated equipment for moving or transferring electric energy in bulk between points of supply and points at which it is transformed for delivery over the distribution system lines to consumers, or is delivered to other electric systems. Transmitting Utility (Transco) - This is a regulated entity which owns, and may construct and maintain, wires used to transmit wholesale power. It may or may not handle the power dispatch and coordination functions. It is regulated to provide non-discriminatory connections, comparable service and cost recovery. According to EPAct, any electric utility, qualifying cogeneration facility, qualifying small power production facility, or Federal power marketing agency which owns or operates electric power transmission facilities which are used for the sale of electric energy at wholesale. See also Generation Dispatch & Control; Power Pool. Transportation Customer - A customer who uses a utility's pipeline and distribution system but buys natural gas from a different supplier. Turbine - A machine for generating rotary mechanical power from the energy of a stream of fluid (such as water, steam, or hot gas). Turbines convert the kinetic energy of fluids to mechanical energy through the principles of impulse and reaction, or a mixture of the two. Unbundling - Disaggregating electric utility service into its basic components and offering each component separately for sale with separate rates for each component. For example, generation, transmission and distribution could be unbundled and offered as discrete services. Universal Service - Electric service sufficient for basic needs (an evolving bundle of basic services) available to virtually all members of the population regardless of income. Uplift - British term now adopted in the US; a charge to adjust for differences between forecasted an actual demand and to cover costs for additional ancillary services needed to cope with that difference. Useful Thermal Output - The thermal energy made available for use in any industrial or commercial process, or used in any heating or cooling application, i.e., total thermal energy made available for processes and applications other than electrical generation. Utility - A regulated entity which exhibits the characteristics of a natural monopoly. For the purposes of electric industry restructuring, "utility" refers to the regulated, vertically-integrated electric company. Transmission utility refers to the regulated owner/operator of the transmission system only. Distribution utility refers to the regulated owner/operator of the distribution system which serves retail customers. Variable Prices - Prices that vary frequently. Prices that are not stable. See Stable Prices. Vertical Integration - An arrangement whereby the same company owns all the different aspects of making, selling, and delivering a product or service. In the electric industry, it refers to the historically common arrangement whereby a utility would own its own generating plants, transmission system, and distribution lines to provide all aspects of electric service.

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Volatility Index - The standard deviation of hourly power prices on a monthly basis. Voltage Collapse - An event that occurs when an electric system does not have adequate reactive support to maintain voltage stability. Voltage Collapse may result in outage of system elements and may include interruption in service to customers. Voltage Limits - The operating voltage range on the interconnected systems that is acceptable on a sustained basis. Volumetric Wires Charge - A type of charge for using the transmission and/or distribution system that is based on the volume of electricity that is transmitted. Watt-hour (Wh) - An electrical energy unit of measure equal to 1watt of power supplied to, or taken from, an electric circuit steadily for 1 hour. Watts – The basic unit of electrical demand or power, equal to the rate of energy transfer equal to one ampere flowing due to an electrical force, or pressure, of one volt at unity power factor. Wholesale Competition - A system whereby a distributor of power would have the option to buy its power from a variety of power producers, and the power producers would be able to compete to sell their power to a variety of distribution companies. Wholesale Customer - Any entity eligible under FERC (and some state) regulations to receive power directly from producers for redistribution to retail customers. Wholesale Power Market - The purchase and sale of electricity from generators to resellers (who sell to retail customers) along with the ancillary services needed to maintain reliability and power quality at the transmission level. Wholesale Sales Energy supplied to other electric utilities, cooperatives, municipals, and Federal and State electric agencies for resale to ultimate consumers. Wires Charge - A broad term which refers to charges levied on power suppliers or their customers for the use of the transmission or distribution wires.

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3.0 SCOPE OF WORK 3.1 ADVISING AND ASSISTING THE STATE IN CONSOLIDATION ACTIVITIES The State has the ability to aggregate its buying needs into consolidated multi-agency (participants) contracts. Depending on applicable price discounts for single payment, the State has the ability to debit participating agencies and consolidate payments (monthly or otherwise) into one lump sum payment to the contractor. The contractor shall perform the following:

a) advising the State on internal consolidation procedures conducive to producing more effective billing between and among participating agencies and the State, when applicable;

b) assisting the State in developing effective and efficient spreadsheet data to capture billing and usage data on a monthly basis from all sources; and

c) assisting the State in the development of effective administrative procedures between and among the agencies and the supplier(s).

Minimum deliverables are as follows:

a) consolidating the State’s participant data into meaningful reports with continuity between month to month data changes;

b) developing spreadsheets, databases or other administrative tools to assist agencies and the State in tracking data and cost histories;

c) recommending to the State a variety of options for automating the State’s data, data collection, reporting or payment processing functions; and

d) proposing viable procedures for the administration of the consolidated accounts. Assumptions:

a) The accounts would total no more than 600 per database or energy type using approximately 25 million therms per year for natural gas;

b) no more than 250 accounts for Green Power electricity supply (or Renewable Energy Certificates) for up to 90 million kWhs per year;

c) no more than 120 accounts for aggregated electricity supply for CIEP accounts about 626 million kWhs per year; and

d) no more than 2000 accounts for Fixed Price (FP) electricity supply, when suitable circumstance arise to bid.

3.2 GENERAL SERVICES The Contractor shall provide:

a) on-call consulting services, weekly status reports and other reports as directed by the State Contract Manager;

b) monitoring program performance; c) attending and assisting in all meetings required to inform and coordinate work with the

State, relevant agencies, and public groups; d) making available all documents, records and other evidence pertaining to service provision

and the costs thereof for a period of two (2) years from the final payment of the contract. e) data reports in Microsoft Access or equivalent database product and shall show relevant

project data in multiple views and groupings, with customized reports available. f) cost reports in Microsoft Excel (97 or better), or equivalent spreadsheet product in multiple

views and groupings, with customized reports available. Word processing reports shall be

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in Microsoft Word (97 or better), with customized reports available. Use of the Internet as a data site for showing both the State and participants relevant data is included in the provision of reports. The State can host the site.

3.3 FIRM AND INTERUPTIBLE NATURAL GAS CONSULTING SERVICES The State has just entered into a four year term contract (through December 31, 2009) for the supply of natural gas to NJCESP participants. Over 400 accounts were included and over 25 million therms annually. However, consulting advice and reports will be needed for the re-bid of these accounts, or for any interim bid if new accounts gathered warrant it. 3.3.1 ADVISING THE STATE ON NATURAL GAS MARKET CONDITIONS The contractor shall perform the following:

a) conducting New Jersey natural gas supply and market availability research before and during the contract period and beyond;

b) exploring alternative natural gas acquisition purchases by nearby states or other large entities in the region; and

c) developing an overall strategic plan, including: 1) when best to go to market, how best to go to market, actions the NJCESP shall

take, and how to optimize the NJCESP’s leverage in the market (short 1 –2 years or long 3 – 5 years);

2) assisting in implementation of the strategic plan; 3) assessing present suppliers and their stability; and 4) performing cost/benefit analysis of proposed strategies and other related duties.

Minimum deliverables are as follows:

a) report on Natural gas market research including pricing for the pre-Request for Proposals (RFP) and post contract award periods;

b) report on other aggregations in the region, especially government, their methodologies and successes;

c) a Strategic Plan, encompassing short, medium and long term strategies for natural gas procurement;

d) assistance in implementing the Strategic Plan; e) report on status and stability of potential suppliers in the NJ market, i.e. Pennsylvania

Jersey Maryland (PJM) region; and f) report of cost/benefit analysis of strategic procurement plans proposed.

3.3.2 ADVISING THE STATE ON NATURAL GAS DEMAND LOAD MANAGEMENT The contractor shall perform the following:

a) advising on managing NJCESP needs through third party suppliers or Local Distribution Companies (LDC);

b) knowing New Jersey Board of Public Utilities (BPU) regulatory history, present proceedings, standards and metering services;

c) assisting in setting and achieving manageable natural gas demand load management objectives, such as fuel switching;

d) identifying basic, alternative and innovative strategies for reducing natural gas costs; e) evaluating strategies for achieving plan objectives; f) identifying less expensive tariffs for accounts; g) identifying potential alternative suppliers and other related duties.

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Minimum deliverables are as follows:

a) report on managing NJCESP natural gas needs through third party suppliers and LDCs; b) report and recommendations for reducing NJCESP natural gas costs through load

management techniques; c) report on tariff recommendations; d) report on identification of other potential regional suppliers to the NJCESP participants,

and an analysis of their operating condition; and e) insight into using load management systems and products and reports recommending

same. 3.3.3 ADVISING THE STATE ON PROCUREMENT STRATEGIES FOR NATURAL GAS SUPPLIES The contractor shall perform the following:

a) preparing economic analysis of cost avoidance/savings potential for all contract year plans;

b) assisting with budget projections; c) researching and proposing at least three acquisition alternatives; d) developing technical specifications, exhibits and attachments; e) attending any bidders conference and participant meetings; f) assisting in evaluation of bids and other related duties.

Minimum deliverables are as follows:

a) report showing economic analysis of contract cost avoidance potential for 1 – 3 years, and up to 5 years;

b) proposal detailing a minimum of three natural gas acquisition sources, benefits and costs and risks of each (e.g. standard, collar, cap etc);

c) detailed and technical assistance in: 1) writing the natural gas acquisition RFP; and 2) developing specifications, tables, appendices and the like; and

d) attend and assist the NJCESP in any Bidder’s Conference, questions and answers, assistance with evaluation of bids, and assistance answering protests.

Assumptions:

a) The accounts would total no more than 600 per database or energy type using approximately 25 million therms per year for natural gas.

3.3.4 COMPILING (SUPPLIER) NATURAL GAS LOAD DATA FROM NJCESP ACCOUNTS The contractor shall perform the following:

a) interfacing with LDCs through Electronic Data Interchange (EDI) and NJCESP participants for account data;

b) fashioning load data (whether from participants, LDCs or through EDI or other resources), into useable reports by variable parameters and bidding classes;

c) analyzing demand and consumption costs; d) determining usage patterns and base consumption levels; e) identifying non-operational accounts; f) analyzing data to determine seasonal consumption patterns; g) determining if accounts are being served by the most favorable utility tariffs;

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h) compiling and analyzing load profiles and other related duties. Minimum deliverables are as follows:

a) ability to use Electronic Data Interchange (EDI) when obtaining NJCESP account data from LDCs;

b) building a database suitable for bidding including account name, number, LDC, location, Tariff class, and usage;

c) reports showing load analysis results of monthly usage for a twelve month period, minimally;

d) reports or data on usage and cost by account or group of accounts; e) reports on non-operational accounts or accounts in incorrect tariff groupings and

recommended actions to correct them. 3.4 ELECTRICITY CONSULTING SERVICES There are approximately 100 NJCESP accounts being bid for CIEP class tariff groupings through the current New Jersey LDC's. The most current bid included over 626 million kWhs of electricity supply for this group of accounts. These numbers reflect estimated NJCESP contracting supply usage needs for a contract start date of June 1, 2006 and ending June 30, 2007. However, the State NJCESP as a consolidator may have additional contracts during this term. The NJCESP also is developing a contract for the supply of green power renewable energy certificates or supply; up to 100 million kWh a year of Green-e electricity. 3.4.1 ADVISING THE STATE ON ELECTRONIC MARKET CONDITIONS The contractor shall perform the following:

a) conducting and offering New Jersey electricity market research over the term of the contract;

b) exploring alternative electricity acquisition purchases by nearby states or other large entities in the region;

c) understanding and analyzing the New Jersey Board of Public Utilities (BPU) Basic Generation Services (BGS) auction and other (BPU) auctions and impacts;

d) developing an overall strategic plan, including: when best to go to market, how best to go to market, actions the NJCESP shall take, and how to optimize the NJCESP’s leverage in the market (short 1 –2 years, medium 3 – 5 years, long 5 years +);

e) assisting in implementation of the strategic plan; f) assessing present power suppliers and their stability; and g) performing cost/benefit analysis of proposed strategies and other related duties.

Minimum deliverables are as follows:

a) report on electricity market research for the pre-, current and post-contract periods; b) report on other aggregations in the region, especially government, their methodologies

and successes; c) a Strategic Plan, encompassing short, medium and long term strategies for electricity

procurement during dips in the market; d) assistance in implementing the Strategic Plan; e) report on status and stability of present suppliers in NJ market; and f) report of cost/benefit analysis of strategic procurement plans proposed.

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3.4.2 ADVISING THE STATE ON ELECTRICITY DEMAND-SIDE MANAGEMENT The contractor shall perform the following:

a) providing techniques for decreasing peak loads and energy consumption; b) identifying and analyzing potential energy conservation measures through audits of State

owned facilities for heating, ventilation, and air conditioning (HVAC), lighting, lighting controls, variable frequency drives and other energy conservation measures;

c) providing energy efficiency options and areas of potential for energy efficiencies; d) providing analysis and recommendations for energy saving equipment and costs vs.

payback or breakeven; e) assisting in setting and achieving manageable electricity demand-side management

objectives; f) identifying basic, alternative and innovative strategies for reducing electricity load costs

including equipment; g) evaluating strategies for achieving plan objectives and other related duties.

Minimum deliverables are as follows:

a) report on managing NJCESP electricity needs through third party suppliers and LDCs; b) reports recommending electricity load management techniques for the State; c) reports and recommendations from energy audits of state-owned buildings; d) reports and recommendations for tariff cost reductions; e) reports and recommendations on reducing State electricity costs through demand-side

management techniques; f) reports and recommendations on equipment costs for potential energy savings projects; g) report on identification of other potential regional suppliers to the NJCESP participants,

and an analysis of their operating condition.

Assumption:

a) The State owns over 35 office and mixed-use buildings (including two garages) in the Trenton area alone totaling over 5.4 million sq. ft., plus prison campuses and healthcare institutions and homes for the aged, among others. Colleges could also be included.

3.4.3 ADVISING THE STATE ON PROCUREMENT STRATEGIES FOR ELECTRICITY SUPPLIES The contractor shall perform the following:

a) advising on managing NJCESP needs through third party suppliers or LDCs and identifying potential alternative suppliers;

b) knowing New Jersey BPU regulatory history, present proceedings, standards and metering services;

c) analyzing the State's Electricity Discount and Energy Competition Act (EDECA); d) preparing economic analysis of cost avoidance/savings potential for 1-3 year plans; e) researching and proposing at least three acquisition alternatives; providing a +/- 15%

renewable sources energy purchase, using bundled or unbundled supply (including Renewable Tradeable Certificates or RECs);

f) developing technical specifications, exhibits and attachments; g) attending any bidders conference and participant meetings; h) assisting in evaluation of bids, protests and other related duties.

Minimum deliverables are as follows:

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a) report showing economic analysis of cost avoidance/savings potential for 1 – 3 years, and

up to 5 years; b) report identifying potential suppliers; c) detailed and technical assistance in:

1) writing the electricity acquisition RFP and developing specifications; 2) including analyzing appropriate trigger prices for award purposes; 3) developing tables and the like; 4) attending and assisting the NJCESP in any Bidder’s Conference; 5) responding to questions and answers; and 6) assistance with evaluation of bids and protests.

Assumptions:

a) No more than 120 accounts for aggregated electricity supply for CIEP accounts about 626 million kWhs per year; and

b) no more than 2500 accounts for Fixed Price (FP) electricity supply, when suitable circumstance arise to bid (roughly 300 million kWhs)

. 3.4.4 ADVISING ON RENEWABLE ELECTRICITY SOURCES AND ENVIRONMENTAL CONCERNS The contractor shall perform the following:

a) conducting New Jersey and regional renewables electricity market research over the term of the contract, including availability of renewable energy sources and comparable costs and methods;

b) developing an RFP for full or partial renewables electricity supply, bundled supply or for renewable energy certificates;

c) understanding the BPU's Clean Energy Program and its Clean Power Choice program and its other activities and programs, policies and regulations, including:

1) renewable portfolio standards; 2) identifying and understanding the application of industry independent green

electricity certifications, such as Green-e from the Center for Resource Solutions; 3) identifying and assisting in obtaining emissions reduction credits where feasible

and researching banking and trading opportunities for those credits; 4) evaluating environmental disclosure labels for emission impacts; 5) evaluating renewable electricity resources and prices; 6) understanding the State's Department of Environmental Protection's (DEP)

renewables standards, policies and programs; 7) advising on the degree of mixes of renewable resources (Class 1 and Class 2

renewable) in commercially available products, renewable energy marketing and price trends;

8) identifying rebates through the Societal Benefits Charge elements of the EDECA statute, and the application of those funds;

9) identifying and assisting in obtaining savings opportunities in the NJ BPU’s Comprehensive Resource Analysis (CRA) program (at the State’s option); and other related duties.

Minimum deliverables are as follows:

a) report identifying emission reduction credits and assistance in obtaining them for NJCESP participants;

b) report on banking and trading emission credits to benefit the NJCESP; c) report on emission impacts of potential supply sources;

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d) report on composition of renewable sources, available products and price trends; e) report on available rebates through BPU or DEP, and fund application; f) report identifying savings opportunities in the Comprehensive Resource Analysis (CRA)

and assistance in obtaining them for participants; g) development and assistance with RFP's for green power supply or renewable energy

certificates, including data gathering, trigger pricing and evaluation assistance. Assumptions:

a) No more than 250 accounts for Green Power electricity supply (or Renewable Energy Certificates) per year.

3.4.5 COMPILING (SUPPLIER) ELECTRICITY LOAD DATA FROM NJCESP ACCOUNTS The contractor shall perform the following:

a) electronic Data Interchange (EDI) with the LDCs; b) interfacing with LDCs and NJCESP participants for account data; c) fashioning load data into useable reports by variable parameters and bidding classes; d) analyzing demand and consumption costs; consolidating accounts to reduce demand

charges where applicable; e) determining peak demand and base consumption levels; f) identifying non-operational accounts; g) analyzing data to determine hourly and seasonal consumption patterns; h) determining load factors and power factors; i) compiling and analyzing load profiles; j) determining more favorable tariff rates and other related duties.

Minimum deliverables are as follows:

a) obtaining NJCESP account data from LDCs through EDI; b) database and reports showing load analysis results, interval data such as peak and non-

peak usage by weekly or monthly usage for one year; and c) reports on non-operational accounts or accounts in incorrect tariff groupings and actions to

correct them. Assumption:

b) The State owns over 35 office and mixed-use buildings (including two garages) in the Trenton area alone totaling over 5.4 million sq. ft. plus prison campuses and healthcare institutions and homes for the aged, among others. Colleges could also be included.

3.5 CONTRACT SINGLE POINT OF CONTACT The Contractor's single-point-of-contact for these projects shall be the State Contract Manager. All deliverables and reports shall be approved by the State Contract Manager before payment will be made. It is preferable that the contractor’s Project Manager (PM) (see section 4.4.4.2) is the similar single--point-of-contact responsible for all activity coordination to be performed under the contract; however, it is not mandatory. The PM may be called by the State Contract Manager to report to regularly, meet with periodically, or share contract data with the NJCESP participants, which activities shall be included in the PM rate. All issues are to be referred to the State Contract Manager or his designee, who will have authority to resolve all contract performance issues. Any disputes or written complaints may be referred by the State Contract Manager to the

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Division of Purchase and Property's Contract Compliance and Administration Unit for final determination. The PM shall represent the entire team and be responsible for all communication with the State Contract Manager. It will be the responsibility of this PM to coordinate the efforts and activities to provide the State’s Contract Manager with completed deliverables within the designated time and cost schedule. Any changes to the PM and key personnel utilized on each assignment shall be approved by the State’s Contract Manager. The PM shall perform services for, attend and assist at all meetings required to inform and coordinate work with the State, relevant departments and participant agencies. Meeting minutes will be prepared by the PM and distributed to participants within three (3) calendar days of the meeting. The PM and/or other staff will attend meetings with expertise needed to act on the meeting agenda. It is not expected nor will the PM be paid for whole work days or work hours not required to work on the project(s). It is expected that the assigned PM may have other responsibilities and even duties to other, non-State, projects. The expectation of the State on the PM is that the PM is aware of all progress on the State’s project(s), manages the task deliverables and costs, meets with State representatives as required, produces meeting minutes, is available to answer project related questions, and is available to consult with the State Contract Manager on issues that come up. 3.6 GENERAL CONTACT OPERATION The State Contract Manager shall direct the contractor to initiate work on a specific deliverable through a written project request order. Prior to starting work on any deliverable, the contractor shall submit a written response to the project request order to the State Contract Manager, with an estimate of activities and costs, identifying hours by task and labor category required to complete the deliverable. Work on a deliverable should not commence until written approval from the State Contract Manager is received. 3.7 CONTRACTOR’S PROXIMITY TO TRENTON The Contractor shall maintain a full time office during the project period(s) and the Contractor’s PM shall be reachable through this office during regular working hours. The office need not be in the Trenton area, but a close proximity to Trenton is preferred. The Contractor's PM shall be available for meetings in Trenton with reasonable notice.

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4.0 BID PROPOSAL PREPARATION AND SUBMISSION 4.1 GENERAL The bidder is advised to thoroughly read and follow all instructions contained in this RFP, including the instructions on the RFP’s signatory page, in preparing and submitting its bid proposal. 4.2 BID PROPOSAL DELIVERY AND IDENTIFICATION In order to be considered, a bid proposal must arrive at the Purchase Bureau in accordance with the instructions on the RFP signatory page http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. Bidders are cautioned to allow adequate delivery time to ensure timely delivery of bid proposals. State regulation mandates that late bid proposals are ineligible for consideration. THE EXTERIOR OF ALL BID PROPOSAL PACKAGES ARE TO BE LABELED WITH THE BID IDENTIFICATION NUMBER AND THE FINAL BID OPENING DATE OR RISK NOT BEING RECEIVED IN TIME. 4.3 NUMBER OF BID PROPOSAL COPIES The bidder must submit one (1) complete ORIGINAL bid proposal, clearly marked as the “ORIGINAL” bid proposal. The bidder should submit seven (7) full, complete and exact copies of the original. The copies requested are necessary in the evaluation of the bid proposal. A bidder failing to provide the requested number of copies will be charged the cost incurred by the State in producing the requested number of copies. It is suggested that the bidder make and retain a copy of its bid proposal. 4.4 BID PROPOSAL CONTENT The bid proposal should be submitted in one volume and that volume divided into four (4) sections with tabs (separators), and the content of the material located behind each tab, as follows:

• Section 1 - Forms (Section 4.4.1 - 4.4.3.) • Section 2 - Technical Proposal (Section 4.4.4) • Section 3 - Organizational Support and Experience (Section 4.4.5) • Section 4 - Cost Proposal (Section 4.4.6)

4.4.1 FORMS THAT MUST BE SUBMITTED WITH BID PROPOSAL 4.4.1.1 SIGNATORY PAGE The bidder shall complete and submit the Signatory page provided on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. The Signatory page shall be signed by an authorized representative of the bidder. If the bidder is a limited partnership, the Signatory page must be signed by a general partner. If the bidder is a joint venture, the Signatory page must be signed by a principal of each party to the joint venture. Failure to comply will result in rejection of the bid proposal. 4.4.1.2 OWNERSHIP DISCLOSURE FORM In the event the bidder is a corporation, partnership or sole proprietorship, the bidder must complete the attached Ownership Disclosure Form. A current completed Ownership Disclosure Form must be received prior to or accompany the bid proposal. Failure to do so will preclude the award of a contract.

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The Ownership Disclosure Form is located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. 4.4.1.3 DISCLOSURE OF INVESTIGATIONS/ACTIONS INVOLVING BIDDER The bidder shall provide a detailed description of any investigation, litigation, including administrative complaints or other administrative proceedings, involving any public sector clients during the past five years including the nature and status of the investigation, and, for any litigation, the caption of the action, a brief description of the action, the date of inception, current status, and, if applicable, disposition. The bidder shall use the Disclosure of Investigations and Actions Involving Bidder form located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. 4.4.1.4 NOTICE OF INTENT TO SUBCONTRACT FORM All bidders shall complete the attached Notice of Intent to Subcontract Form http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml to advise the State as to whether or not a subcontractor will be utilized to provide any goods or services under the contract. If this is a Small Business Subcontracting set-aside contract, the bidder must comply with the Procedures for Small Business Participation as Subcontractors set forth in http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. 4.4.1.5 SUBCONTRACTOR UTILIZATION FORM If the bidder intends to utilize a subcontractor, the Subcontractor Utilization Form http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml must be completed and submitted with the bid proposal. 4.4.2 PROOF OF REGISTRATIONS THAT MUST BE SUBMITTED WITH THE BID PROPOSAL 4.4.2.1 BUSINESS REGISTRATION CERTIFICATE FROM THE DIVISION OF REVENUE FAILURE TO SUBMIT A COPY OF THE BIDDER’S BUSINESS REGISTRATION CERTIFICATE (OR INTERIM REGISTRATION) FROM THE DIVISION OF REVENUE WITH THE BID PROPOSAL MAY BE CAUSE FOR REJECTION OF THE BID PROPOSAL. The bidder may go to www.nj.gov/njbgs to register with the New Jersey Division of Revenue or to obtain a copy of an existing Business Registration Certificate. Refer to Section 1.1. of the NJ Standard Terms and Conditions version 05 09 06 located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml 4.4.2.2 SMALL BUSINESS SET-ASIDE CONTRACTS Not applicable to this procurement 4.4.3 FORMS THAT MUST BE SUBMITTED BEFORE CONTRACT AWARD AND SHOULD BE SUBMITTED WITH THE BID PROPOSAL. 4.4.3.1 MACBRIDE PRINCIPLES CERTIFICATION

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The bidder is required to complete the attached MacBride Principles Certification evidencing compliance with the MacBride Principles. The requirement is a precondition to entering into a State contract. The MacBride Principles Certification Form is located on the Advertised Solicitation, Current Bid Opportunities webpage: http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. 4.4.3.2 AFFIRMATIVE ACTION The bidder is required to complete the attached Affirmative Action Employee Information Report, or, in the alternative, supply either a New Jersey Affirmative Action Certificate or evidence that the bidder is operating under a federally approved or sanctioned affirmative action program. The requirement is a precondition to entering into a State contract. The Affirmative Action Forms are located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. 4.4.3.3 SERVICES SOURCE DISCLOSURE FORM Pursuant to N.J.S.A. 52:34-13.2, the bidder is required to submit with its bid proposal a completed source disclosure form. http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. Refer to section 7.1.2 of this RFP. 4.4.4 TECHNICAL PROPOSAL

In this Section, the bidder shall describe its approach and plans for accomplishing the work outlined in the Scope of Work Section, i.e., Section 3.0. The bidder must set forth its understanding of the requirements of this RFP and its ability to successfully complete the contract. This Section of the bid proposal should contain at least the following information:

4.4.4.1 MANAGEMENT OVERVIEW The bidder shall set forth its overall technical approach and plans to meet the requirements of the RFP in a narrative format. This narrative should convince the State that the bidder understands the objectives that the contract is intended to meet, the nature of the required work and the level of effort necessary to successfully complete the contract. This narrative should convince the State that the bidder’s general approach and plans to undertake and complete the contract are appropriate to the tasks and subtasks involved. Mere reiterations of RFP tasks and subtasks are strongly discouraged, as they do not provide insight into the bidder's ability to complete the contract. The bidder’s response to this section should be designed to convince the State that the bidder’s detailed plans and approach proposed to complete the Scope of Work are realistic, attainable and appropriate and that the bidder’s bid proposal will lead to successful contract completion.

4.4.4.2 CONTRACT MANAGEMENT

The bidder should describe its specific plans to manage, control and supervise the contract to ensure satisfactory contract completion according to the required schedule. The plan should include the bidder's approach to communicate with the State Contract Manager including, but not limited to, status meetings, status reports, etc. 4.4.4.3 CONTRACT SCHEDULE

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The bidder should include a contract schedule. If key dates are a part of this RFP, the bidder’s schedule should incorporate such key dates and should identify the completion date for each task and sub-task required by the Scope of Work. Such schedule should also identify the associated deliverable item(s) to be submitted as evidence of completion of each task and/or subtask. The bidder should identify the contract scheduling and control methodology to be used and should provide the rationale for choosing such methodology. The use of Gantt, PERT or other charts is at the option of the bidder. 4.4.4.4 MOBILIZATION AND IMPLEMENTATION PLAN Not Applicable to this Procurement

4.4.4.5 POTENTIAL PROBLEMS

The bidder should set forth a summary of any and all problems that the bidder anticipates during the term of the contract. For each problem identified, the bidder should provide its proposed solution. 4.4.5 ORGANIZATIONAL SUPPORT AND EXPERIENCE

The bidder should include information relating to its organization, personnel, and experience, including, but not limited to, references, together with contact names and telephone numbers, evidencing the bidder's qualifications, and capabilities to perform the services required by this RFP.

4.4.5.1 LOCATION

The bidder should include the location of the bidder's office that will be responsible for managing the contract. The bidder should include the telephone number and name of the individual to contact.

4.4.5.2 ORGANIZATION CHART (CONTRACT SPECIFIC)

The bidder should include a contract organization chart, with names showing management, supervisory and other key personnel (including sub-vendor's management, supervisory or other key personnel) to be assigned to the contract. The chart should include the labor category and title of each such individual.

4.4.5.3 REQUIRED POSITIONS AND RESUMES The bidder shall provide an organizational structure that addresses each project, controls the budget, scope, schedule, product quality, and expedites the successful completion of the project(s). The organizational structure shall include:

a) Project Manager (PM)

1) The bidder shall identify its Project Manager (PM) who will manage all efforts of every project task order and will serve as a focal point for contact between all parties affected in implementing the individual assignments. In addition:

The PM shall be very knowledgeable of the energy field and markets. He/she should have an engineering or business degree (BS, BA) and have a minimum

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of six years managing energy projects of similar size and scope as the NJCESP projects, who holds certification from the Association of Energy Engineers as a Certified Energy Manager (CEM) or Certified Energy Procurement Professional (CEPP), Professional Engineer or similar certifications.

The contractor’s PM shall be assisted by the following job title classifications:

a) Sr. Engineer/Sr. Analyst –

1) This person shall be responsible for the most complex tasks needed for the project. Intimate industry knowledge, use of special analytical tools and spreadsheets, databases, the internet and the like shall be conducted by or overseen by this person. He/she should be a licensed professional engineer (PE), or an individual with a mechanical or electrical engineering or business degree (BS, BA) who holds certification from the Association of Energy Engineers as a Certified Energy Manager (CEM) or Certified Energy Procurement Professional (CEP) or Professional Engineering License and six years experience in energy management.

b) Engineer/Analyst

1) This person shall perform many of the analytical tasks of the project under

direction of the Sr. Engineer/Analyst or the PM. Industry knowledge should be extensive as well as use of technical tools, databases, software programs, and the like. He/she should have a mechanical or electrical engineering license or business degree (BS, BA) and four or more years in all areas of energy management and control.

d) Technician

1) This person shall perform lower level analytical tasks, such as information

gathering, data verifications, reference material lookups, and perhaps writing and proofing reports. He/she should have two or more years experience in energy management, not necessarily possessing a college degree (e.g. an electrician, HVAC mechanic, energy auditor etc.).

e) Data Entry Person

1) This person shall be responsible for straight data entry tasks which do not

require engineering or analytical expertise, such as entering account data into spreadsheets or databases. He/she should be skilled in the use of computers for data manipulation such as Microsoft Access and Excel spreadsheets.

Detailed resumes should be submitted for all positions identified above and any other management, supervisory and key personnel to be assigned to the contract. Resumes should be structured to emphasize relevant qualifications and experience of these individuals in successfully completing contracts of a similar size and scope to those required by this RFP. Resumes should include the following:

• Clearly identifies the individual's qualifications to fill the assigned positions • Clearly identifies the individual's previous experience in completing similar contracts. • Beginning and ending dates should be given for each similar contract.

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• A description of the contract should be given and should demonstrate how the individual's work on the completed contract relates to the individual's ability to contribute to successfully providing the services required by this RFP.

• With respect to each similar contract, the bidder should include the name and address of each reference together with a person to contact for a reference check and a telephone number.

4.4.5.4 BACKUP STAFF

The bidder should include a list of backup staff that may be called upon to assist or replace primary individuals assigned. Backup staff must be clearly identified as backup staff. In the event the bidder must hire management, supervisory and/or key personnel if awarded the contract, the bidder should include, as part of its recruitment plan, a plan to secure backup staff in the event personnel initially recruited need assistance or need to be replaced during the contract term.

4.4.5.5 ORGANIZATION CHART (ENTIRE FIRM)

The bidder should include an organization chart showing the bidder’s entire organizational structure. This chart should show the relationship of the individuals assigned to the contract to the bidder's overall organizational structure.

4.4.5.6 EXPERIENCE OF BIDDER ON CONTRACTS OF SIMILAR SIZE AND SCOPE

The bidder should provide a comprehensive listing of contracts of similar size and scope that it has successfully completed, as evidence of the bidder’s ability to successfully complete the services required by this RFP. Emphasis should be placed on contracts that are similar in size and scope to the work required by this RFP. A description of all such contracts should be included and should show how such contracts relate to the ability of the firm to complete the services required by this RFP. For each such contract, the bidder should provide two names and telephone numbers of individuals for the other contract party. Beginning and ending dates should also be given for each contract.

4.4.5.7 FINANCIAL CAPABILITY OF THE BIDDER

In order to provide the State with the ability to judge the bidder’s financial capacity and capabilities to undertake and successfully complete the contract, the bidder should submit certified financial statements to include a balance sheet, income statement and statement of cash flow, and all applicable notes for the most recent calendar year or the bidder’s most recent fiscal year. If certified financial statements are not available, the bidder should provide either a reviewed or compiled statement from an independent accountant setting forth the same information required for the certified financial statements, together with a certification from the Chief Executive Officer and the Chief Financial Officer, that the financial statements and other information included in the statements fairly present in all material respects the financial condition, results of operations and cash flows of the bidder as of, and for, the periods presented in the statements. In addition, the bidder should submit a bank reference. If the information is not supplied with the bid proposal, the State may still require the bidder to submit it. If the bidder fails to comply with the request within seven (7) business days, the State may deem the proposal non-responsive. A bidder may designate specific financial information as not subject to disclosure when the bidder has a good faith legal/factual basis for such assertion. Bidder may submit specific

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financial documents in a separate, sealed package clearly marked “Confidential-Financial Information” along with the Bid Proposal. The State reserves the right to make the determination to accept the assertion and shall so advise the bidder. 4.4.5.8 SUBCONTRACTOR(S)

A. All bidders must complete the Notice of Intent to Subcontract Form whether or not they intend to utilize subcontractors in connection with the work set forth in this RFP. If the bidder intends to utilize subcontractor(s), then the Subcontractor Utilization Plan must also be submitted with the bid.

N.J.A.C. 17:13-4 and Executive Order 71 mandate that if the bidder proposes to utilize a subcontractor, the bidder must make a good faith effort to meet the set-aside subcontracting targets of awarding a total of twenty-five percent (25%) of the value of the contract to New Jersey-based, New Jersey Commerce, Economic Growth & Tourism Commission registered small businesses, with a minimum of five (5) percent awarded to each of the three categories set forth below, and the balance of ten (10) percent spread across the three annual gross revenue categories: Category I – $1 to $500,000; Category II - $500,001 to $5,000,000; Category III - $5,000,001 to $12,000,000.

B. Should the bidder choose to use subcontractors and fail to meet the Small

Business Subcontracting targets set forth above, the bidder must submit documentation demonstrating its good faith effort to meet the targets with its bid proposal or within seven (7) business days upon request.

C. Should the bidder propose to utilize a subcontractor(s) to fulfill any of its obligations, the

bidder shall be responsible for the subcontractor’s(s): (a) performance; (b) compliance with all of the terms and conditions of the contract; and (c) compliance with the requirements of all applicable laws.

D. The bidder must provide a detailed description of services to be provided by each

subcontractor, referencing the applicable Section or Subsection of this RFP. E. The bidder should provide detailed resumes for each subcontractor’s management,

supervisory and other key personnel that demonstrate knowledge, ability and experience relevant to that part of the work which the subcontractor is designated to perform.

F. The bidder should provide documented experience to demonstrate that each

subcontractor has successfully performed work on contracts of a similar size and scope to the work that the subcontractor is designated to perform in the bidder’s proposal.

4.4.6 PRICE SCHEDULE The bidder must submit its pricing using the format set forth in the State supplied price sheet(s) attached to this RFP. Failure to submit all information required will result in the bid being considered non-responsive. Each bidder is required to hold its prices firm through issuance of contract. Quantities are estimates only. There are no guarantees of minimums or maximums.

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5.0 SPECIAL CONTRACTUAL TERMS AND CONDITIONS 5.1 PRECEDENCE OF SPECIAL CONTRACTUAL TERMS AND CONDITIONS The contract awarded as a result of this RFP shall consist of this RFP, addendum to this RFP, the contractor's bid proposal and the Division's Notice of Award. Unless specifically stated within this RFP, the Special Contractual Terms and Conditions of the RFP take precedence over the NJ Standard Terms and Conditions version 05 09 06 located on the Advertised Solicitation, Current Bid Opportunities webpage: http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml.

In the event of a conflict between the provisions of this RFP, including the Special Contractual Terms and Conditions and the NJ Standard Terms and Conditions version 05 09 06, and any Addendum to this RFP, the Addendum shall govern. In the event of a conflict between the provisions of this RFP, including any Addendum to this RFP, and the bidder's bid proposal, the RFP and/or the Addendum shall govern. 5.2 CONTRACT TERM AND EXTENSION OPTION The term of the contract shall be for a period of three (3) years. The anticipated "Contract Effective Date" is provided on the signatory page of this RFP: http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. If delays in the procurement process result in a change to the anticipated Contract Effective Date, the bidder agrees to accept a contract for the full term of the contract. The contract may be extended for all or part of two (2), one-year periods, by the mutual written consent of the contractor and the Director. Purchase orders may be placed against the contract up to and including the end of business on the last day of the contract, for delivery no more than 45 days after contract expiration. 5.3 CONTRACT TRANSITION In the event that a new contract has not been awarded prior to the contract expiration date, as may be extended herein, it shall be incumbent upon the contractor to continue the contract under the same terms and conditions until a new contract can be completely operational. At no time shall this transition period extend more than ninety (90) days beyond the expiration date of the contract. 5.4 CONTRACT AMENDMENT Any changes or modifications to the terms of the contract shall be valid only when they have been reduced to writing and signed by the contractor and the Director. 5.5 CONTRACTOR RESPONSIBILITIES

The contractor shall have sole responsibility for the complete effort specified in the contract. Payment will be made only to the contractor. The contractor shall have sole responsibility for all payments due any subcontractor. The contractor is responsible for the professional quality, technical accuracy and timely completion and submission of all deliverables, services or commodities required to be provided under the contract. The contractor shall, without additional compensation, correct or revise any

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errors, omissions, or other deficiencies in its deliverables and other services. The approval of deliverables furnished under this contract shall not in any way relieve the contractor of responsibility for the technical adequacy of its work. The review, approval, acceptance or payment for any of the services shall not be construed as a waiver of any rights that the State may have arising out of the contractor’s performance of this contract.

5.6 SUBSTITUTION OF STAFF

If it becomes necessary for the contractor to substitute any management, supervisory or key personnel, the contractor will identify the substitute personnel and the work to be performed. The contractor must provide detailed justification documenting the necessity for the substitution. Resumes must be submitted evidencing that the individual(s) proposed as substitution(s) have qualifications and experience equal to or better than the individual(s) originally proposed or currently assigned. The contractor shall forward a request to substitute staff to the State Contract Manager for consideration and approval. No substitute personnel are authorized to begin work until the contractor has received written approval to proceed from the State Contract Manager.

5.7 SUBSTITUTION OR ADDITION OF SUBCONTRACTOR(S)

This Subsection serves to supplement but not to supersede Section 3.11 of the NJ Standard Terms and Conditions version 05 09 06 located on the Advertised Solicitation, Current Bid Opportunities webpage. If it becomes necessary for the contractor to substitute a subcontractor, add a subcontractor or substitute its own staff for a subcontractor, the contractor will identify the proposed new subcontractor or staff member(s) and the work to be performed. The contractor must provide detailed justification documenting the necessity for the substitution or addition. The contractor must provide detailed resumes of its proposed replacement staff or of the proposed subcontractor’s management, supervisory and other key personnel that demonstrate knowledge, ability and experience relevant to that part of the work which the subcontractor is to undertake. The qualifications and experience of the replacement(s) must equal or exceed those of similar personnel proposed by the contractor in its bid proposal. The contractor shall forward a written request to substitute or add a subcontractor or to substitute its own staff for a subcontractor to the State Contract Manager for consideration. If the State Contract Manager approves the request, the State Contract Manager will forward the request to the Director for final approval. No substituted or additional subcontractors are authorized to begin work until the contractor has received written approval from the Director. 5.8 OWNERSHIP OF MATERIAL All data, technical information, materials gathered, originated, developed, prepared, used or obtained in the performance of the contract, including, but not limited to, all reports, surveys, plans, charts, literature, brochures, mailings, recordings (video and/or audio), pictures, drawings, analyses, graphic representations, software computer programs and accompanying documentation and print-outs, notes and memoranda, written procedures and documents, regardless of the state of completion, which are prepared for or are a result of the services

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required under this contract shall be and remain the property of the State of New Jersey and shall be delivered to the State of New Jersey upon 30 days notice by the State. With respect to software computer programs and/or source codes developed for the State, the work shall be considered “work for hire”, i.e., the State, not the contractor or subcontractor, shall have full and complete ownership of all software computer programs and/or source codes developed. To the extent that any of such materials may not, by operation of the law, be a work made for hire in accordance with the terms of this Agreement, contractor or subcontractor hereby assigns to the State all right, title and interest in and to any such material, and the State shall have the right to obtain and hold in its own name and copyrights, registrations and any other proprietary rights that may be available. Should the bidder anticipate bringing pre-existing intellectual property into the project, the intellectual property must be identified in the bid proposal. Otherwise, the language in the first paragraph of this section prevails. If the bidder identifies such intellectual property ("Background IP") in its bid proposal, then the Background IP owned by the bidder on the date of the contract, as well as any modifications or adaptations thereto, remain the property of the bidder. Upon contract award, the bidder or contractor shall grant the State a non-exclusive, perpetual royalty free license to use any of the bidder/contractor's Background IP delivered to the State for the purposes contemplated by the Contract. 5.9 DATA CONFIDENTIALITY All financial, statistical, personnel and/or technical data supplied by the State to the contractor are confidential. The contractor is required to use reasonable care to protect the confidentiality of such data. Any use, sale or offering of this data in any form by the contractor, or any individual or entity in the contractor’s charge or employ, will be considered a violation of this contract and may result in contract termination and the contractor’s suspension or debarment from State contracting. In addition, such conduct may be reported to the State Attorney General for possible criminal prosecution. 5.10 NEWS RELEASES The contractor is not permitted to issue news releases pertaining to any aspect of the services being provided under this contract without the prior written consent of the Director. 5.11 ADVERTISING The contractor shall not use the State’s name, logos, images, or any data or results arising from this contract as a part of any commercial advertising without first obtaining the prior written consent of the Director. 5.12 LICENSES AND PERMITS The contractor shall obtain and maintain in full force and effect all required licenses, permits, and authorizations necessary to perform this contract. The contractor shall supply the State Contract Manager with evidence of all such licenses, permits and authorizations. This evidence shall be submitted subsequent to the contract award. All costs associated with any such licenses, permits and authorizations must be considered by the bidder in its bid proposal.

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5.13 CLAIMS AND REMEDIES 5.13.1 CLAIMS All claims asserted against the State by the contractor shall be subject to the New Jersey Tort Claims Act, N.J.S.A. 59:1-1, et seq., and/or the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1, et seq. 5.13.2 REMEDIES Nothing in the contract shall be construed to be a waiver by the State of any warranty, expressed or implied, of any remedy at law or equity, except as specifically and expressly stated in a writing executed by the Director. 5.13.3 REMEDIES FOR FAILURE TO COMPLY WITH MATERIAL CONTRACT REQUIREMENTS In the event that the contractor fails to comply with any material contract requirements, the Director may take steps to terminate the contract in accordance with the State administrative code and/or authorize the delivery of contract items by any available means, with the difference between the price paid and the defaulting contractor's price either being deducted from any monies due the defaulting contractor or being an obligation owed the State by the defaulting contractor. 5.14 LATE DELIVERY The contractor must immediately advise the State Contract Manager of any circumstance or event that could result in late completion of any task or subtask called for to be completed on a date certain. 5.15 RETAINAGE Not Applicable to this Procurement 5.16 STATE'S OPTION TO REDUCE SCOPE OF WORK The State has the option, in its sole discretion, to reduce the scope of work for any task or subtask called for under this contract. In such an event, the Director shall provide advance written notice to the contractor. Upon receipt of such written notice, the contractor will submit, within five (5) working days to the Director and the State Contract Manager, an itemization of the work effort already completed by task or subtask. The contractor shall be compensated for such work effort according to the applicable portions of its price schedule. 5.17 SUSPENSION OF WORK The State Contract Manager may, for valid reason, issue a stop order directing the contractor to suspend work under the contract for a specific time. The contractor shall be paid until the effective date of the stop order. The contractor shall resume work upon the date specified in the stop order, or upon such other date as the State Contract Manager may thereafter direct in writing. The period of suspension shall be deemed added to the contractor's approved schedule of performance. The Director and the contractor shall negotiate an equitable adjustment, if any, to the contract price.

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5.18 CHANGE IN LAW Whenever an unforeseen change in applicable law or regulation affects the services that are the subject of this contract, the contractor shall advise the State Contract Manager and the Director in writing and include in such written transmittal any estimated increase or decrease in the cost of its performance of the services as a result of such change in law or regulation. The Director and the contractor shall negotiate an equitable adjustment, if any, to the contract price. 5.19 CONTRACT PRICE INCREASE (PREVAILING WAGE) If the Prevailing Wage Act (N.J.S.A. 34:11-56 et seq.) is applicable to the contract, the contractor may apply to the Director, on the anniversary of the effective date of the contract, for a contract price increase. The contract price increase will be available only for an increase in the prevailing wages of trades and occupations covered under this contract during the prior year. The contractor must substantiate with documentation the need for the increase and submit it to the Director for review and determination of the amount, if any, of the requested increase, which shall be available for the upcoming contract year. No retroactive increases will be approved by the Director. 5.20 ADDITIONAL WORK AND/OR SPECIAL PROJECTS

The contractor shall not begin performing any additional work or special projects without first obtaining written approval from both the State Contract Manager and the Director. In the event of additional work and/or special projects, the contractor must present a written proposal to perform the additional work to the State Contract Manager. The proposal should provide justification for the necessity of the additional work. The relationship between the additional work and the base contract work must be clearly established by the contractor in its proposal. The contractor’s written proposal must provide a detailed description of the work to be performed broken down by task and subtask. The proposal should also contain details on the level of effort, including hours, labor categories, etc., necessary to complete the additional work. The written proposal must detail the cost necessary to complete the additional work in a manner consistent with the contract. The written price schedule must be based upon the hourly rates, unit costs or other cost elements submitted by the contractor in the contractor’s original bid proposal submitted in response to this RFP. Whenever possible, the price schedule should be a firm, fixed cost to perform the required work. The firm fixed price should specifically reference and be tied directly to costs submitted by the contractor in its original bid proposal. A payment schedule, tied to successful completion of tasks and subtasks, must be included. Upon receipt and approval of the contractor’s written proposal, the State Contract Manager shall forward same to the Director for the Director’s written approval. Complete documentation from the Using Agency, confirming the need for the additional work, must be submitted. Documentation forwarded by the State Contract Manager to the Director must include all other required State approvals, such as those that may be required from the State of New Jersey’s Office of Management and Budget (OMB) and Office of Information and Technology (OIT). No additional work and/or special project may commence without the Director’s written approval. In the event the contractor proceeds with additional work and/or special projects without the Director’s written approval, it shall be at the contractor’s sole risk. The State shall be under no obligation to pay for work performed without the Director’s written approval.

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5.21 FORM OF COMPENSATION AND PAYMENT This Section supplements Section 4.5 of the NJ Standard Terms and Conditions version 05 09 06, located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. The contractor must submit official State invoice forms to the Using Agency with supporting documentation evidencing that work for which payment is sought has been satisfactorily completed. Invoices must reference the tasks or subtasks detailed in the Scope of Work section of the RFP and must be in strict accordance with the firm, fixed prices submitted for each task or subtask on the RFP pricing sheets. When applicable, invoices should reference the appropriate RFP price sheet line number from the contractor’s bid proposal. All invoices must be approved by the State Contract Manager before payment will be authorized. In addition, primary contractors must provide, on a monthly and cumulative basis, a breakdown in accordance with the budget submitted, of all monies paid to any small business subcontractor(s). This breakdown shall be sent to the Purchase Bureau Business Unit, Set-Aside Coordinator. Invoices must also be submitted for any special projects, additional work or other items properly authorized and satisfactorily completed under the contract. Invoices shall be submitted according to the payment schedule agreed upon when the work was authorized and approved. Payment can only be made for work when it has received all required written approvals and has been satisfactorily completed. Work and subsequent payments to the contractor shall be based on the issuance of a Project Request Order (PRO), initiated by the State Contract Manager and agreed upon by the contractor. The projects, resulting from the PROs, are billed separately by the contractor and typically include lines items of work performed and any other ancillary expenditures. It is the responsibility of the contractor to submit the invoices related to the specific projects to the State Contract Manager for payment subsequent to project completion. 5.21.1 PAYMENT TO CONTRACTOR - OPTIONAL METHOD Not applicable to this procurement 5.22 MODIFICATIONS AND CHANGES TO THE NJ STANDARD TERMS AND CONDITIONS VERSION 05 09 06

NJ Standard Terms and Conditions version 05 09 06 are located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml 5.22.1 PATENT AND COPYRIGHT INDEMNITY Section 2.1 of the NJ Standard Terms and Conditions version 05 09 06 is deleted and replaced with the following: 2.1 Patent and Copyright Indemnity a. The Contractor shall hold and save the State of New Jersey, its officers, agents, servants and employees, harmless from liability of any nature or kind for or on account of the use of any copyrighted or uncopyrighted composition, secret process, patented or unpatented invention, article or appliance furnished or used in the performance of the contract.

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b. The State of New Jersey agrees: (1) to promptly notify the Contractor in writing of such claim or suit; (2) that the Contractor shall have control of the defense of settlement of such claim or suit; and (3) to cooperate with the Contractor in the defense of such claim or suit, to the extent that the interests of the Contractor and the State are consistent. c. In the event of such claim or suit, the Contractor, at its option, may: (1) procure for the State of New Jersey the legal right to continue the use of the product; (2) replace or modify the product to provide a non-infringing product that is the functional equivalent; or (3) refund the purchase price less a reasonable allowance for use that is agreed to by both parties.

5.22.2 INDEMNIFICATION Section 2.2 of the NJ Standard Terms and Conditions version 05 09 06, is deleted and replaced with the following: 2.2 Indemnification The contractor's liability to the State for actual, direct damages resulting from the contractor's performance or non-performance, or in any manner related to the contract, for any and all claims, shall be limited in the aggregate to 500 % of the value of the contract, except that such limitation of liability shall not apply to the following: 1. The contractor's obligation to indemnify the State of New Jersey and its employees from and against any claim, demand, loss, damage or expense relating to bodily injury or the death of any person or damage to real property or tangible personal property, incurred from the work or materials supplied by the contractor under the contract caused by negligence or willful misconduct of the contractor; 2. The contractor's breach of its obligations of confidentiality; and, 3. Contractor's liability with respect to copyright indemnification. The contractor's indemnification obligation is not limited by but is in addition to the insurance obligations contained in Section 2.3 of the NJ Standard Terms and Conditions version 05 09 06. The contractor shall not be liable for special, consequential, or incidental damages. 5.22.3 INSURANCE - PROFESSIONAL LIABILITY INSURANCE Section 2.3 of the NJ Standard Terms and Conditions version 05 09 06 regarding insurance is modified with the addition of the following section regarding Professional Liability Insurance. d) Professional Liability Insurance: The Contractor shall carry Errors and Omissions, Professional Liability Insurance and/or Professional Liability Malpractice Insurance sufficient to protect the Contractor from any liability arising out the professional obligations performed pursuant to the requirements of the Contract. The insurance shall be in the amount of not less than $500,000 and in such policy forms as shall be approved by the State. If the Contractor has claims-made coverage and subsequently changes carriers during the term of the Contract, it shall obtain from its new Errors and Omissions, Professional Liability Insurance and/or Professional Malpractice Insurance carrier an endorsement for retroactive coverage.

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6.0 PROPOSAL EVALUATION 6.1 PROPOSAL EVALUATION COMMITTEE Bid proposals may be evaluated by an Evaluation Committee composed of members of affected departments and agencies together with representative(s) from the Purchase Bureau. Representatives from other governmental agencies may also serve on the Evaluation Committee. On occasion, the Evaluation Committee may choose to make use of the expertise of outside consultant in an advisory role.

6.2 ORAL PRESENTATION AND/OR CLARIFICATION OF BID PROPOSAL After the submission of bid proposals, unless requested by the State, contact with the State is limited to status inquiries only and such inquiries are only to be directed to the buyer. Any further contact or information about the proposal to the buyer or any other State official connected with the solicitation will be considered an impermissible supplementation of the bidder's bid proposal. A bidder may be required to give an oral presentation to the Evaluation Committee concerning its bid proposal. The Evaluation Committee may also require a bidder to submit written responses to questions regarding its bid proposal. The purpose of such communication with a bidder, either through an oral presentation or a letter of clarification, is to provide an opportunity for the bidder to clarify or elaborate on its bid proposal. Original bid proposals submitted, however, cannot be supplemented, changed, or corrected in any way. No comments regarding other bid proposals are permitted. Bidders may not attend presentations made by their competitors. It is within the Evaluation Committee’s discretion whether to require a bidder to give an oral presentation or require a bidder to submit written responses to questions regarding its bid proposal. Action by the Evaluation Committee in this regard should not be construed to imply acceptance or rejection of a bid proposal. The Purchase Bureau buyer will be the sole point of contact regarding any request for an oral presentation or clarification. 6.3 EVALUATION CRITERIA The following evaluation criteria categories, not necessarily listed in order of significance, will be used to evaluate bid proposals received in response to this RFP. The evaluation criteria categories may be used to develop more detailed evaluation criteria to be used in the evaluation process: 6.3.1 TECHNICAL EVALUATION CRITERIA

A) The bidder's general approach and plans in meeting the requirements of this RFP.

B) The bidder's detailed approach and plans to perform the services required by the Scope of Work of this RFP.

C) The bidder’s documented experience in successfully completing contracts of a similar size

and scope to the work required by this RFP.

D) The qualifications and experience of the bidder’s management, supervisory or other key personnel assigned to the contract, with emphasis on documented experience in successfully completing work on contracts of similar size and scope to the work required by this RFP.

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E) The overall ability of the bidder to mobilize, undertake and successfully complete the

contract. This judgment will include, but not be limited to, the following factors: the number and qualifications of management, supervisory and other staff proposed by the bidder to complete the contract, the availability and commitment to the contract of the bidder’s management, supervisory and other staff proposed and the bidder’s contract management plan, including the bidder’s contract organizational chart.

6.3.2 BIDDER’S PRICE SCHEDULE For evaluation purposes, bidders will be ranked according to the total bid price located on the Price Sheet located on the Advertised Solicitation, Current Bid Opportunities webpage, http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml 6.3.3 BID DISCREPANCIES In evaluating bids, discrepancies between words and figures will be resolved in favor of words. Discrepancies between unit prices and totals of unit prices will be resolved in favor of unit prices. Discrepancies in the multiplication of units of work and unit prices will be resolved in favor of the unit prices. Discrepancies between the indicated total of multiplied unit prices and units of work and the actual total will be resolved in favor of the actual total. Discrepancies between the indicated sum of any column of figures and the correct sum thereof will be resolved in favor of the corrected sum of the column of figures. 6.3.4 EVALUATION OF BID PROPOSAL The Evaluation Committee shall complete its evaluation and recommend to the Director for award the responsible bidder(s) whose bid proposal, conforming to this RFP, is most advantageous to the State, price and other factors considered. The Evaluation Committee considers and weights price, technical criteria, and other factors during the evaluation process. 6.4 NEGOTIATION AND BEST AND FINAL OFFER (BAFO) Following the opening of bid proposals, the State shall, pursuant to N.J.S.A. 52:34-12(f), negotiate one or more of the following contractual issues: the technical services offered, the terms and conditions and/or the price of a proposed contract award with any bidder, and/or solicit a Best and Final Offer (BAFO) from one or more bidders. Initially, the Evaluation Committee will conduct a review of all the bids and select bidders to contact to negotiate and/or conduct a BAFO based on its evaluation and determination of the bid proposals that best satisfy the evaluation criteria and RFP requirements, and that are most advantageous to the State, price and other factors considered. The Committee may not contact all bidders to negotiate and/or to submit a BAFO. In response to the State's request to negotiate, bidders must continue to satisfy all mandatory RFP requirements but may improve upon their original technical proposal in any revised technical proposal. However, any revised technical proposal that does not continue to satisfy all mandatory requirements will be rejected as non-responsive and the original technical proposal will be used for any further evaluation purposes in accordance with the following procedure. In response to the State's request for a BAFO, bidders may submit a revised price proposal that is equal to or lower in price than their original submission, but must continue to satisfy all mandatory requirements. Any revised price proposal that is higher in price than the original will

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be rejected as non-responsive and the original bid will be used for any further evaluation purposes. After receipt of the results of the negotiation and/or the BAFO(s), the Evaluation Committee will complete its evaluation and recommend to the Director for award that responsible bidder(s) whose bid proposal, conforming to this RFP, is most advantageous to the State, price and other factors considered. All contacts, records of initial evaluations, any correspondence with bidders related to any request for negotiation or BAFO, any revised technical and/or price proposals, the Evaluation Committee Report and the Award Recommendation, will remain confidential until a Notice of Intent to Award a contract is issued.

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7.0 CONTRACT AWARD 7.1 DOCUMENTS REQUIRED BEFORE CONTRACT AWARD 7.1.1 REQUIREMENTS OF N.J.S.A. 19:44A-20.13-25 (FORMERLY EXECUTIVE ORDER 134) In order to safeguard the integrity of State government procurement by imposing restrictions to insulate the negotiation and award of State contracts from political contributions that pose the risk of improper influence, purchase of access, or the appearance thereof, the Legislature enacted N.J.S.A. 19:44A-20.13 – 25 on March 22, 2005 the “Legislation”), retroactive to October 15, 2004, superseding the terms of Executive Order 134. Pursuant to the requirements of the Legislation, the terms and conditions set forth in this section are material terms of any contract resulting from this RFP: 7.1.1.1 DEFINITIONS For the purpose of this section, the following shall be defined as follows:

a) Contribution – means a contribution reportable as a recipient under “The New Jersey Campaign Contributions and Expenditures Reporting Act.” P.L. 1973, c. 83 (C.19:44A-1 et seq.), and implementing regulations set forth at N.J.A.C. 19:25-7 and N.J.A.C. 19:25-10.1 et seq. Through December 31, 2004, contributions in excess of $400 during a reporting period were deemed "reportable" under these laws. As of January 1, 2005, that threshold was reduced to contributions in excess of $300. b) Business Entity – means any natural or legal person, business corporation, professional services corporation, Limited Liability Company, partnership, limited partnership, business trust, association or any other legal commercial entity organized under the laws of New Jersey or any other state or foreign jurisdiction. The definition of a business entity includes (i)all principals who own or control more than 10 percent of the profits or assets of a business entity or 10 percent of the stock in the case of a business entity that is a corporation for profit, as appropriate; (ii)any subsidiaries directly or indirectly controlled by the business entity; (iii)any political organization organized under section 527 of the Internal Revenue Code that is directly or indirectly controlled by the business entity, other than a candidate committee, election fund, or political party committee; and (iv)if a business entity is a natural person, that person’s spouse or child, residing in the same household.

7.1.1.2 BREACH OF TERMS OF THE LEGISLATION It shall be a breach of the terms of the contract for the Business Entity to (i)make or solicit a contribution in violation of the Legislation, (ii)knowingly conceal or misrepresent a contribution given or received; (iii)make or solicit contributions through intermediaries for the purpose of concealing or misrepresenting the source of the contribution; (iv)make or solicit any contribution on the condition or with the agreement that it will be contributed to a campaign committee or any candidate of holder of the public office of Governor, or to any State or county party committee; (v)engage or employ a lobbyist or consultant with the intent or understanding that such lobbyist or consultant would make or solicit any contribution, which if made or solicited by the business entity itself, would subject that entity to the restrictions of the Legislation; (vi)fund contributions made by third parties, including consultants, attorneys, family members, and employees; (vii)engage in any exchange of contributions to circumvent the intent of the Legislation; or (viii)directly or indirectly through or by any other person or means, do any act which would subject that entity to the restrictions of the Legislation.

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7.1.1.3 CERTIFICATION AND DISCLOSURE REQUIREMENTS

a) The State shall not enter into a contract to procure from any Business Entity services or any material, supplies or equipment, or to acquire, sell or lease any land or building, where the value of the transaction exceeds $17,500, if that Business Entity has solicited or made any contribution of money, or pledge of contribution, including in-kind contributions to a candidate committee and/or election fund of any candidate for or holder of the public office of Governor, or to any State or county political party committee during certain specified time periods b) Prior to awarding any contract or agreement to any Business Entity, the Business Entity proposed as the intended awardee of the contract shall submit the Certification and Disclosure form, certifying that no contributions prohibited by the Legislation have been made by the Business Entity and reporting all contributions the Business Entity made during the preceding four years to any political organization organized under 26 U.S.C.527 of the Internal Revenue Code that also meets the definition of a “continuing political committee” within the mean of N.J.S.A. 19:44A-3(n) and N.J.A.C. 19:25-1.7. The required form and instructions, available for review on the Purchase Bureau website at http://www.state.nj.us/treasury/purchase/forms.htm#eo134 , shall be provided to the intended awardee for completion and submission to the Purchase Bureau with the Notice of Intent to Award. Upon receipt of a Notice of Intent to Award a Contract, the intended awardee shall submit to the Division, in care of the Purchase Bureau Buyer, the Certification and Disclosure(s) within five (5) business days of the State’s request. Failure to submit the required forms will preclude award of a contract under this RFP, as well as future contract opportunities. c) Further, the Contractor is required, on a continuing basis, to report any contributions it makes during the term of the contract, and any extension(s) thereof, at the time any such contribution is made. The required form and instructions, available for review on the Purchase Bureau website at http://www.state.nj.us/treasury/purchase/forms.htm#eo134 , shall be provided to the intended awardee with the Notice of Intent to Award.

7.1.1.4 STATE TREASURER REVIEW The State Treasurer or his designee shall review the Disclosures submitted pursuant to this section, as well as any other pertinent information concerning the contributions or reports thereof by the intended awardee, prior to award, or during the term of the contract, by the contractor. If the State Treasurer determines that any contribution or action by the contractor constitutes a breach of contract that poses a conflict of interest in the awarding of the contract under this solicitation, the State Treasurer shall disqualify the Business Entity from award of such contract. 7.1.1.5 ADDITIONAL DISCLOSURE REQUIREMENT OF P.L. 2005, C. 271 Contractor is advised of its responsibility to file an annual disclosure statement on political contributions with the New Jersey Election Law Enforcement Commission (ELEC), pursuant to P.L. 2005, c. 271, section 3 if the contractor receives contracts in excess of $50,000 from a public entity in a calendar year. It is the contractor’s responsibility to determine if filing is necessary. Failure to so file can result in the imposition of financial penalties by ELEC. Additional information about this requirement is available from ELEC at 888-313-3532 or at www.elec.state.nj.us.

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7.1.2 SOURCE DISCLOSURE REQUIREMENTS 7.1.2.1 REQUIREMENTS OF N.J.S.A. 52:34-13.2 Under the referenced statute, effective August 3, 2005, all contracts primarily for services awarded by the Director shall be performed within the United States, except when the Director certifies in writing a finding that a required service cannot be provided by a contractor or subcontractor within the United States and the certification is approved by the State Treasurer. 7.1.2.2 SOURCE DISCLOSURE REQUIREMENTS Pursuant to the statutory requirements, the intended awardee of a contract primarily for services with the State of New Jersey must disclose the location by country where services under the contract, including subcontracted services, will be performed. The Source Disclosure Certification form is located on the Advertised Solicitation, Current Bid Opportunities webpage http://www.state.nj.us/treasury/purchase/bid/summary/07-x-38787.shtml. FAILURE TO SUBMIT SOURCING INFORMATION WHEN REQUESTED BY THE STATE SHALL PRECLUDE AWARD OF A CONTRACT TO THE BIDDER. If any of the services cannot be performed within the United States, the bidder shall state with specificity the reasons why the services cannot be so performed. The Director shall determine whether sufficient justification has been provided by the bidder to form the basis of his certification that the services cannot be performed in the United States and whether to seek the approval of the Treasurer. 7.1.2.3 BREACH OF CONTRACT OF EXECUTIVE ORDER 129 A SHIFT TO PROVISION OF SERVICES OUTSIDE THE UNITED STATES DURING THE TERM OF THE CONTRACT SHALL BE DEEMED A BREACH OF CONTRACT.

If, during the term of the contract, the contractor or subcontractor, who had on contract award declared that services would be performed in the United States, proceeds to shift the performance of any of the services outside the United States, the contractor shall be deemed to be in breach of its contract, which contract shall be subject to termination for cause pursuant to Section 3.5b.1 of the Standard Terms and Conditions version 05 09 06 of the RFP, unless previously approved by the Director and the Treasurer. 7.2 FINAL CONTRACT AWARD Contract award[s] shall be made with reasonable promptness by written notice to that responsible bidder(s), whose bid proposal(s), conforming to this RFP, is(are) most advantageous to the State, price, and other factors considered. Any or all bid proposals may be rejected when the State Treasurer or the Director determines that it is in the public interest to do so. 7.3 INSURANCE CERTIFICATES The contractor shall provide the State with current certificates of insurance for all coverages required by the terms of this contract, naming the State as an Additional Insured. 7.4 PERFORMANCE BOND Not applicable to this procurement

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8.0 CONTRACT ADMINISTRATION 8.1 CONTRACT MANAGER The State Contract Manager is the State employee responsible for the overall management and administration of the contract. The State Contract Manager for this project will be identified at the time of execution of contract. At that time, the contractor will be provided with the State Contract Manager’s name, department, division, agency, address, telephone number, fax phone number, and email address. 8.1.1 STATE CONTRACT MANAGER RESPONSIBILITIES For an agency contract where only one State office uses the contract, the State Contract Manager will be responsible for engaging the contractor, assuring that Purchase Orders are issued to the contractor, directing the contractor to perform the work of the contract, approving the deliverables and approving payment vouchers. The State Contract Manager is the person that the contractor will contact after the contract is executed for answers to any questions and concerns about any aspect of the contract. The State Contract Manager is responsible for coordinating the use and resolving minor disputes between the contractor and any component part of the State Contract Manager's Department. If the contract has multiple users, then the State Contract Manager shall be the central coordinator of the use of the contract for all Using Agencies, while other State employees engage and pay the contractor. All persons and agencies that use the contract must notify and coordinate the use of the contract with the State Contract Manager. 8.1.2 COORDINATION WITH THE STATE CONTRACT MANAGER Any contract user that is unable to resolve disputes with a contractor shall refer those disputes to the State Contract Manager for resolution. Any questions related to performance of the work of the contract by contract users shall be directed to the State Contract Manager. The contractor may contact the State Contract Manager if the contractor can not resolve a dispute with contract users.