Project 100 Round 2 Q&A from the Informational Sessions held on

May 30, in Rocky Hill and June 13, 2006 in Stamford.

 

Question

Answer

Clarify the minimum bid eligibility requirements? The RFP states that “Proposers” must demonstrate that they have participated in an initial consultation with the local distribution company on project interconnection requirements.  Later in the RFP, more specific information is requested on the status of the interconnection study. 

 

Project 100 projects are not demonstration or pre-development projects. This program is for projects that are ready for development or in the development phase and beyond.  Projects will be screened and evaluated to determine that they are at least ready for development, which will include an assessment of their interconnection status.

Can costs that are found out later to upgrade a system be included later as a modification to a proposal?

 

Proposers are asked to bid a price for electricity sold to the EDC’s for the term of a PPA.  That price must support their projects.  Thus, it is incumbent on Proposers to accurately estimate the cost of their projects.

Does that mean that the Proposer has to take cost risks for estimated costs or costs not known?

 

The pricing offered is assumed to recover the total estimated cost of a project, including its cost of capital, which should reflect the risks associated with the project.

Will Pre-development Program (PDP) projects be allowed to apply under Project 100?

 

 

 

Projects in the application phase of the PDP cannot apply for funding under a different CCEF program such as Project 100.  However, PDP projects must have reached the development phase and meet the eligibility requirement of Project.

 

Is “F” in pricing Options 5B and Modified 5B the same?

Yes, “F” equals the fixed renewable adder of 5.5 ¢/kWh.  If the full 5.5 cents is not needed, the number can be lower to something less than 5.5 cents.

Is half of any REC value for fuel cell projects included in the pricing formulas?  Is the value shown as a cost or benefit in the formulas?

No, REC value is not an explicit component of any of the pricing option formulas.  REC value is implicit in the bid pricing to the extent that it is used to offer pricing lower than what would otherwise be offered to make a bid more competitive.

 

 

Did all parties (CCEF, CL&P, UI and the DPUC) agree on the proposed program and contract that will be issued?

 

 

On May 19, 2006, there was a compliance filing that incorporated all changes of to the long-term power purchase contracts and the processes from Round 1 to Round 2.  Final approval has not yet been provided by the DPUC.

Will CCEF recommend more than 81MW to 85MW in the second round to the utilities? 

 

In Round 1, CCEF received applications for approximately 142MW and originally recommended approximately 64MW to the utilities.  Only 19MW of the 64MW remain for consideration by the utilities.  Some of the projects dropped out for their own reasons. CCEF is hopeful that it will receive 90MW to 150 MW and forward at least 85MW to 90MW to the utilities for consideration.

What if some one has additional question?

Proposers are encouraged to submit questions electronically till July 14, 2006.

Does CCEF have enough funding for the projects under this round?

 

With the incentives in the new legislation (PA 05-01), projects should be close to being self supportive.  Given this assumption, CCEF believe it will have sufficient funds to support selected projects requiring additional funding support.

What is the difference between (“d”) or (“g”) from the pricing formulas to determine the pricing for projects that use natural gas?

In pricing Option 5B, “D” is the local gas distribution company’s transportation and distribution charge.  In pricing Option Modified 5B, “G” the local gas distribution company’s charge under one of their service tariffs.  Thus, the term in Option 5B ([NYMEX/(1 – FP)] + B + C + D)) collapses into “G.”

How many megawatts CCEF intends to submit to the utilities under this round?

 

 

CCEF can submit more than the requested 81MW to 85MW to the utilities.  The utilities will choose from the recommendations made by CCEF for ultimate approval by the DPUC.  The targeted amount for CCEF is to forward 85MW-90MW.

 

What are the criteria used to whittle down the projects that get recommended from CCEF?

CCEF will evaluate each proposal based on a number of criteria such as ratepayer impact, location and technical and financial viability.

Will there be an issue with the utilities entering into long-term contracts under Project 100 since there are still open dockets and unresolved issues?

CCEF believes that the utilities will not hold-up this process and will sign the Project 100 contracts since the program is mandated by the Connecticut legislation.

 

Are there any new filings or items related to the PPA?

 

 

No, the last filing was submitted on May 19, and CCEF is awaiting DPUC approval.  It is not expected that there will be any changes.  However, if there are any significant differences in the standard PPA approved by the DPUC, CCEF may extend Round 2 to allow Proposers the opportunity to respond to such changes.

Who has the final approval of the projects?

 

 

The DPUC must approve all PPA’s before they can be executed between the utilities and project proposers.  If the utilities reject a project, they must have a valid reason, and the DPUC can overrule any decision.

How will wind project be handled since they typically generate less power?

Project 100 is a competitive program and all projects will compete for a PPA based on the requirements of the RFP.

Should the pricing on Form C of Appendix A include gas if natural gas is used? 

All project costs should be included in the formation of a project’s contract pricing.

 

What happens if different people use different estimates in their proposals on pricing costs?  What happens if later on the pricing is severally under estimated?

The process is competitive and costs are one area that will be looked at as part of Staff’s analysis.  Pricing become finalized when the contact is signed with the DPUC.

Can you add a “basis” to the pricing index to get the delivered price?

None of the pricing options explicitly includes “basis” as a component in their pricing formula, particularly Options 5B and Modified 5B.  In determining contract pricing for options other than 5B and Modified 5B, basis can be reflected in contract pricings as a component of fuel cost. 

 

Is the definition of “wholesale costs” are the same for both Option 5b and Modified Option 5b?

Yes, it is the same for both options.  The Wholesale Market Price is either the hour by hour locational marginal price (LMP) or the 24-month average of the LMP at the node of interconnection at the time a PPA is approved by the DPUC.

Can projects be allowed to aggregate?  What is the maximum at which you can aggregate and apply by zone versus node?

The projects can be aggregated at multiple sites up to 5MW.  However, it is very difficult to aggregate projects in several different areas of the state.  It is much easier to aggregate projects within a clustered zone.  The minimum capacity that the utilities will write a contract for is 1MW. 

 

What is the definition of “principally manufactured in Connecticut” mentioned on Page 4 of the RFP?

The standard was established by CCEF pursuant to Order No. 2 in Docket No. 03-07-17RE02 filed on May 5, 2006.  Fuel cell manufacturers would submit an affidavit indicating that it was manufactured in Connecticut.

If project is operating can they participate in Project 100 Round 2?

Generators that were operating before July 1, 2003 but were later rebuilt or refurbished after July 1, 2003 as discussed in the Decision on Docket 03-07-17 REC01 may be qualify for Round 2.  CCEF encourages such generators to petition the DPUC for a ruling for qualification under this program.

When would you know if we have a Round 3?

Project 100’s mandate is to provide a minimum of 100 MW of Class 1 electric power to Connecticut’s EDC’s under a standard PPA.  If CCEF achieves this goal in Round 2, there will not be any other rounds under the current enabling legislation.

Have any projects from Project 100 been submitted to DPUC?

Three projects from Round 1 were forwarded to the EDC’s and two are being considered by the DPUC.

Are you anticipating new projects or old projects to be submitted?

CCEF is anticipating new projects and projects that submitted applications in Round 1.

Is biodiesel considered a fuel for the purposes of the Project 100 bid if we use a latest low emission technology diesel engine?   

 

If yes, what fuel mix would we need to use?   We can use everything from a Straight Vegetable Oil through all the permutations of biodiesel fuel blends (B100 to B10).  Would you want to see a gas option? This equipment can be dual fuel but there would be a heat rate hit for the project should that option be used.  Can the project be paid for generation under the PPA if the ISO or State DEP directs the project to dispatch with natural gas should the dual fuel option be instituted. 

 

Yes, proposed projects designed to use biodiesel as a fuel can be consider for a PPA under Project 100 if they are approved by the DPUC as a Class 1 resource.  CCEF strongly suggests that projects proposing a biodiesel blend (including the use of other fuels such as natural gas and diesel) seek a declaratory ruling from the DPUC for Class 1 status approval. 

 

Does the capital cost rebate apply to project 100 installations?  In other words, for a 1.5 MW solar installation, can we apply for the $5 per watt  on site renewable DG program and the 5.5 cents premium under Project 100?

Project 100 is not a rebate program.  It offers a long-term power purchase agreement (PPA) with Connecticut’s electric distribution companies.  Pricing options for power purchased are detailed in the Project 100 RFP (see our website address presented below).  In general, these options have price caps at the 24 month average wholesale market price for electricity at the node of interconnection plus 5.5 cents, or the hourly wholesale market price for electricity at the node of interconnection plus 5.5 cents.  If a project can not meet these price caps, CCEF may provide funding to get such a project to the selected price cap.

 

http://www.ctcleanenergy.com/investment/Project100.html

 

Are CCEF Project 100 grants normally subject to Federal Income tax?

Generally, it is assumed that for Federal Income Tax (FIT) purposes, projects are valued net of a CCEF grant. However, any project seeking a CCEF grant should consult with a tax advisor for an opinion on how to treat such a grant for FIT purposes.

It is understood from the last Q&A session that predevelopment projects that are already approved are eligible to apply for project 100. Is this correct?  Also, what are the limitations or restrictions from applying for reimbursement for predevelopment with a Project 100 application pending,

Projects that have been approved for funding under the Pre-Development Program, can apply for Project 100.  Their eligibility for Project 100 will be determined upon a review of their application against the program’s qualification requirements.

Section 1.1 suggests that Projects funded under CCEF’s Pre-development Program Opportunity (“CCEF-PDEV-001) might not qualify for participation in this RFP.  We request that CCEF clarify whether Projects which have received funds under CCEF-PDEV-001 and meet the Eligibility Criteria set forth in Section 1.3 may participate in the RFP.

 

The primary purpose of the Pre-Development Program is to feed projects to Project 100.  Thus, a project approved for Pre-Development funding can qualify for participation in Round 2, if it can meet the eligibility criteria set forth in the Round 2 RFP.

The Proposal Certification requires applicants to certify that “the proposal is not made in connection with any competing proposer submitting a separate response to this RFP and is in all respects fair and without collusion or fraud”.  We request that CCEF confirm that any company/individual may work on multiple projects participating in the RFP so long as there is no collusion between the project bids.

 

Any company/individual may work on multiple projects participating in the RFP so long as there is no collusion or fraud between the project bids.

 

 

 Connecticut Clean Energy Fund

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