On February 14, 2020, the State of Maine Public Utilities Commission (the Commission), acting pursuant to the Act To Reform Maine's Renewable Portfolio Standard, P.L. 2019, Chapter 477 (the Act), issued a Request for Proposal (the RFP) in order to procure an amount of energy or Renewable Energy Credits (RECs) from Class 1A Resources of at least 7%, but not more than 10%, of retail electricity sales in the State of Maine during calendar year 2018. The Act directs the Commission to conduct two competitive solicitation processes to procure, in the aggregate, an amount of energy or RECs from Class 1A resources that is equal to 14% of retail electricity sales in the State during calendar year 2018, or 1.715 million MWh, and the RFP is the first of such competitive solicitation processes. Proposals in response to the RFP must be submitted on or before April 10, 2020.
A Class 1A resource is defined in Section 1 of the Act and Chapter 311 of the Commission's rules as any new renewable capacity resource other than a new renewable capacity resource that for at least two years was not operated or was not recognized by New England Independent System Operator (NEISO) as a capacity resource and, after September 1, 2005, resumed operation or was recognized by NEISO as a capacity resource.
The selected bidder will enter into a contract (the form of contract is not yet available but will be posted to the website linked below when it is available) with either Central Maine Power Company (CMP) or Emera Maine (EM) for a term of 20 years or, if the Commission finds a contract for a longer term to be prudent, longer.
To qualify for a contract pursuant to this RFP, a resource must be a Class 1A resource and the resource must have no affiliation with a customer that has elected to be exempt from the Class 1A and thermal energy credit requirements pursuant to sections 1 and 2 of the Act.
The bids will be evaluated as follows: a weight of 70% will be given to benefits to Maine ratepayers and a weight of 30% will be given to benefits to the Maine economy resulting from the resource. In selecting among proposals, the Commission will determine the total benefits to Maine ratepayers and the Maine economy and, using the scoring weights noted above, select those proposals that maximize the overall benefits to the State. To the extent sufficient resources are available, 75% of the energy or RECs contracted with pursuant to the Act must come from Class 1A resources that began commercial operations after June 30, 2019 and 25% must come from Class 1A resources that began commercial operations on or prior to June 30, 2019.
An energy storage system which is connected to the State's electricity grid and paired with a qualifying resource may participate in this procurement process if the system is either: (1) collocated with a qualifying resource, whether metered jointly or separately; or (2) for a system that is not collocated with a qualifying resource, upon a finding by the Commission that the system would result in a reduction in greenhouse gas emissions. An energy storage system that is not collocated with a qualifying resource may receive RECs only for stored energy from a qualifying resource.
If awarded a contract in this procurement process, an energy storage system must remain stationary and under the same ownership throughout the term of the contract. The Commission may, in its sole discretion, allow an energy storage system to be paired with and added to a resource after the resource is awarded a contract in this procurement process. A bid that includes an energy storage system must include two separate proposals, one with and one without the storage system. Ratepayer benefits from each of the two separate proposals will be assessed based on the benefits to ratepayers.
Proposals should be for the sale of energy or RECs from Class 1A resources through a contract with CMP or EM. Bidders may also offer to sell capacity as part of the contract. Proposals should specify annual energy quantities or quantity caps for the amounts of energy or RECs for each year of the contract term. If capacity is proposed to be included, the proposal should also specify annual quantities or quantity caps for the amounts of capacity for each year of the proposed contract term. Proposals may be structured as physical or financial transactions. If capacity is included in the proposal, separate prices may be proposed for energy or RECs and capacity, or a single bundled price for all components that are included may be proposed. Proposals should clearly specify which contract products are included in the pricing. Prices must be fixed prices and may not be defined by formulae or indices, except that prices that increase at a specified fixed percentage in each year may be proposed. The same generation resource may submit multiple pricing proposals, as long as they are mutually exclusive. Any contingencies associated with a proposal must be clearly described and supported in the bidder's proposal(s). Bidders should include a proposed starting date for the contract term. Proposals should include (a) a description of the facility and its in-service date, or projected in-service date, (b) expected monthly energy, monthly capacity or REC output for each year of the contract term, (c) detailed information about the location of the facility, as well as the interconnection point, (d) information and supporting documents describing the corporate structure and ownership of the facility, (e) information sufficient to demonstrate the financial capability of the facility owner and operator, including audited financial statements of the facility owner and corporate parent and current credit agency rating reports (if applicable), (f) information and documentation demonstrating the technical experience and expertise of the facility owner and operator, and (g) identification of any affiliation with a Maine retail electricity customer that receives service at transmission or sub-transmission voltage.
The contract will include a requirement for performance security to ensure that the economic benefits to the Maine economy that are proposed by a resource are realized. The specific amount of performance security required will be determined on a project-specific basis based on the Commission's assessment of the contract prices and payments, the expected benefits to the Maine economy and other risks and benefits of the contract. Proposals should include the proposed form of performance security. Acceptable forms of performance security are: (1) cash (U.S. currency); or (2) an irrevocable, transferable and unconditional standby letter of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a minimum credit rating of A- from S&P or A3 from Moody's. Winning bidders must post any initial required performance security within two (2) business days of contract execution. Proposals should include evidence of a bidder's intent and ability to fulfill the performance security requirements should the proposal be selected. In particular, proposals should include a statement from a qualified bank meeting the minimum credit rating criteria noted above that it would provide the performance security required for the proposal.
Proposals and pricing submitted are firm and final bids and will be binding on the bidder. Changes to proposals will not be accepted after the submission of bids except to the extent requested by the Commission.
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