Request for Offers Eligible Renewable Resources

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Request for OffersEligible Renewable Resources
Pre- Bid Conference March 27, 2008
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Agenda
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Administrative Items

• Pre-Bid Conference will end no later than noon.
• Please fill out question index cards and hand to
  any SDGE employee.
• I will moderate QA. Any follow-up questions
  should be addressed to me.
• All questions and answers will be posted on SDGE
  website by April 24, 2008.

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Question and Answer Period

• Ground Rules
• Technical questions
• Not all questions may be answered at this
  conference but instead will later be posted on
  SDGEs website
• Unless explicitly stated, responses do not imply
  an amendment to the RFO
• Any amendments discussed for the RFO are
  unofficial until posted on the RFO Website

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Anti-Trust Guidelines

• All participants in todays meeting shall comply
  with anti-trust guidelines.
• These guidelines direct meeting participants to
  avoid discussions of topics or behavior that
  would result in anti-competitive behavior,
  including restraint of trade and conspiracy to
  create unfair or deceptive business practices or
  discrimination, allocation of production,
  imposition of boycotts and exclusive dealing
  arrangements.

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Overview of RFO RequirementsResource Criteria

• Resource Origin
• Re-powering of existing facilities
• Incremental capacity upgrades of existing
  facilities
• New facilities
• New facilities that are scheduled to come online
  during the years specified in this RFO that have
  excess or uncontracted quantities of power for a
  short time frame
• Existing facilities with expiring contracts or
• Eligible resources currently under contract with
  SDGE. SDGE shall consider offers to extend
  terms of or expand contracted capacities for
  existing agreements.
• All Resources must be CEC-certifiable as an
  eligible renewable resource
• Resources must commence deliveries in 2009, 2010,
  2011 or 2012
• Resources must deliver to any point on the CAISO
  grid
• Minimum net output capacity must be
• 1.5 MW (if within SDGE service area)
• 5.0 MW (if outside SDGE service area)

Water and wastewater resources 1.5MW can sell
electricity at a pre-determined price. For more
info, visit http//www.sdge.com/regulatory/AB1969.
shtml
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RFO RequirementsAlternative I Offers PPA-only

• Term
• Short Term up to 5 years
• Long Term 10, 15 or 20-year agreements
• Any other contract terms may be considered

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RFO RequirementsAlternative II Offers PPA with
Buyout

• Resources must be in San Diego County, Orange
  County or Imperial Valley
• 10, 15 or 20-year PPA term
• First 10-years shall be typical PPA
• SDGE notifies Seller in Year 9 whether or not
  SDGE will exercise buyout option
• SDGE pays for buyout at the end of Year 10
• PPA will terminate
• All permits and rights necessary for ownership
  must transfer to SDGE
• If SDGE does not exercise buyout option, PPA
  continues until its scheduled conclusion.

Within SDGEs service area.
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RFO RequirementsAlternative III Offers Turnkey
Projects

• Resources must be in San Diego County, Orange
  County or Imperial Valley
• All permits and rights necessary for ownership
  must transfer to SDGE
• Respondents must provide complete design and
  construction specifications for the technology
  being proposed.
• Respondents may also propose joint
  ownership/development opportunities, alternative
  financing or sharing of commercial risks that
  would reduce the cost to SDGE.

Within SDGEs service area.
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RFO Schedule
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Evaluating Short-Term Offers

• SDGE-established methodology
• All projects will be compared to forward market
  pricing indices for all attributes bundled within
  the offer.
• If the total cost of the offer is less than the
  cost SDGE would pay based on the market indices,
  the project will be short listed.

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Evaluating Long-Term Offers

• Least-cost/best-fit (LCBF) criteria established
  by the CPUC
• Least cost does not necessarily indicate a
  preference for low priced offers
• Best fit does not necessarily indicate a
  preference for firm resources
• Best fit includes energy, capacity, ancillary
  services and local reliability needs as
  applicable
• Compare LCBF costs of all projects, where
• LCBF Cost Direct Cost (capacity and energy bid
  price) Indirect Cost
• Indirect Cost includes
• Costs necessary to deliver energy to SDGE Load
  Center
• (transmission upgrade costs determined either
  through responses to TRCR, or system impact
  studies)
• Congestion costs
• Resource Adequacy value also considered
• The CPUC permits SDGE to consider qualitative
  and other factors, including
• Project Viability - Resource Diversity - Fuel
  Availability
• Historical Performance - Development Risk -
  Project Location

SDGE will shortlist 2Xs SDGEs need.
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PPA Offers

• Offered prices must be for price at delivery
  point and include wheeling cost to the delivery
  point
• Offered prices must already include Gen-Tie costs
• Gen-Tie Costs vs. Transmission Upgrade Costs

• XMSN Upgrade Costs
• Costs to upgrade grid to increase capacity and
  reliability
• Bidder fronts the utilities the money, utilities
  to pay back in accordance with FERC rules
• SDGE will estimate a projects XMSN upgrade
  costs from TRCRs or CAISO interconnection studies

• Gen-Tie costs
• Costs bidder must pay for sole-use facilities to
  interconnect to the grid
• Includes distribution upgrades
• Bidders must consider estimated gen-tie cost when
  establishing the unit price of the bid

Network Upgrades as defined by ISO and FERC
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Transmission Upgrade Costs

• SDGE will estimate a projects XMSN upgrade
  costs from TRCRs or CAISO interconnection studies
  
• Respondents must specify whether or not the
  project was submitted into a TRCR
• Which utilitys TRCR?
• Which cluster the project would be located in?
• If a project was not submitted into a TRCR,
  Respondents may sign the release allowing SDGE
  to view the projects CAISO interconnection
  studies

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Credit Conditions

• Types of security include parent guaranty, deed
  of trust, or letter of credit
• SDGE will not be required to post collateral

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10-Minute Break

• We will reconvene in

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Question and Answer Period

• Reiterating Ground Rules
• Technical questions
• Not all questions may be answered at this
  conference but instead will later be posted on
  SDGEs website
• Unless explicitly stated, responses do not imply
  an amendment to the RFO
• Any amendments discussed for the RFO are
  unofficial until posted on the RFO Website

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Final Reminders

• After the pre-bid conference, all questions must
  be submitted to the RFO Website on or before
  04/03/2008.
• See important announcements
• See list of conference attendees and conference
  presentation
• Download RFO-required forms and documents
• Submit questions and view responses
• Upload Electronic Offers

http//www.sdge.com/renewablerfo2008