RECs RFP Q&A - Illinois Power Agency - 2009 Procurement for Ameren Illinois Utilities

The Procurement Administrator will endeavor to answer all submitted questions in a timely and professional manner in accord with the goals of the RFP process. Questions will be answered by the Procurement Administrator in the order they are received, except in those cases where a specific question requires additional consideration, thereby extending the response period.

No. The delivery schedule is at the discretion of the bidder, as long as all the RECs are delivered by the contract deadline. See Section 3 (Deliveries and Quantity) of the REC Contract for more information.

Invoices will be issued shortly following award notifications, they will be sent to winning bidders before the end of May, with payment due by June 30th, as stated on the Supplier Fee Form.

If a bidder is not located in PJM or MISO and is not currently a member of a RECs tracking system, how should that bidder certify their RECs under Section 6 of the REC Contract?

Both PJM GATS andd M-RETS allow generators outside of their ISO service areas to register with them.

Yes, Green-e will be accepted as an alternative tracking system and Certification Authority for this procurement.

Yes, ERCOT will be accepted as an alternative tracking system and Certification Authority for this procurement.

No. Whether bids are for Unit-Specific or Unit Non-Specific RECs is not considered in the evaluation process. This information is requested with bid submission only to streamline contract preparation.

No. The only items that are needed from bidders in advance of or on bid day are:

1. Bidder Registration Form, signed and faxed (617-531-2826) or emailed by 5:00 pm on Friday 5/15
2. Pre-Bid Letter of Credit, faxed (617-531-2826) or emailed by 5:00 pm on Friday 5/15 with original to be delivered on Monday 5/18
3. Supplier Fee Form, signed and faxed (617-531-2826) or emailed by 12:00 noon on Monday 5/18
4. Completed Bid Form, submitted as described in the Bid Submission section of the Bidder Registration page

All contract execution steps will occur following award notifications to winning bidders. The Ameren Illinois Utilities will prepare partially executed contracts, which will be sent to winning bidders to sign and return.

No. The Delivery Schedule will be filled in during the contract execution phase, it does not need to be specified in advance of being awarded blocks.

Does the company representative who signs the Bidder Registration Form and Supplier Fee Form need to be the same officer who will sign the REC Contract?

No. The Bidder Registration Form and Supplier Fee Form need to be signed by a representative who can bind the company to the contents of those forms, but it can be a different person that the officer who will sign the contracts if a bidder is awarded blocks.

On bid day, bidders will need to specify the number of 5,000-REC blocks they are bidding at a given price in each of one or more REC Classes. Additionally, bidders will need to specify whether the RECs will be Unit-Specific or Unit Non-Specific. If Unit-Specific is selected, the Name, Location, EIA number, and Online Date of each facility will also need to be specified. Finally, bidders will need to indicate which Certification Authority they will be utilizing. Please see Section 6 of the REC Contract and #R21 below for additional information.

Please see Section 3 (Deliveries and Quantity) of the REC Contract for details of how the Delivery Schedule will be set.

As stated in Section 3.4 of the RECs RFP, bidders do not need to specify the source of the RECs in advance of submitting bids. However, each block must consist of RECs that have the same vintage and are only of one Class. Section 5 of the REC Contract presents two options bidders, to specify that the RECs included in the Contract are either unit-specific (Option 1) or unit non-specific (Option 2). Bidders will indicate as part of the bid submission process which Option they are choosing.

The Applicable Program for this contract is the Illinois Renewable Portfolio Standard, as defined in 20 ILCS 3855/1-75(c).

A definition of Certification Authority is provided in Section 1.12 of the Master REC Agreement (attached to the REC Contract as Exhibit E). A definition of GIS, as included in the Certification Authority definition, is provided in Section 1.32 of the Master REC Agreement.

If a bidder's Collateral Threshold is not adequate to cover the full amount of Performance Assurance, is it possible to avoid posting a guaranty, letter of credit or cash?

Yes, because RECs generated as early as January 1, 2009 will be accepted, a winning bidder can deliver all or a portion of their awarded quantity on the contract Effective Date, which would reduce the Remaining Contract Value that Performance Assurance would be posted to cover.

RECs must be generated by May 31, 2010 and delivered by July 15, 2010. See Section 3 (Deliveries and Quantity) of the final REC Contract for more details.

Bidders only submit one Pre-Bid LC, which covers all three Utilities.

The relevant contact information for the Pre-Bid Letter of Credit is shown in paragraph 15 of the Letter of Credit, and also is listed on the Bidder Registration page.

Will winning energy bidders execute a single contract covering all three Ameren Illinois Utilities, or three contracts, one with each Ameren Illinois Utility?

Winning RECs bidders will execute three contracts, one with each Ameren Illinois Utility.

The pre-bid LC and the performance assurance Form of LC (Exhibit C to the REC Contract) contain language (in sections 5 and 6, respectively) that require the bank providing the LC to transfer any amounts drawn on that LC "at the opening of business on the first Business Day next succeeding the date of such drawing" if the drawing notification is made on or after 11:00 AM. What time is the "opening of business" for the purpose of these LCs?

The Ameren Illinois Utilities will expect any such transfer of funds by 10:00 AM on the next Business Day in the relevant time zone.

What is the highest amount of collateral a bidder might need to post if awarded RECs through this procurement?

As explained in Section 11(d)(ii)(B) on page 6 of the draft REC Contract, the Performance Assurance required for this transaction "shall be equal to the positive difference, if any, between 10% of the Remaining Contract Value and the Seller�s Collateral Threshold, rounded up to the nearest $10,000, as estimated by Buyer." The budget for the total procurement is $16.6 million, therefore that would be the highest total contract value a bidder could be awarded.

If an unrated entity posts a guaranty from a creditworthy parent, what is the methodology for determining the dollar amount of this unconditional guaranty?

The amount of unsecured credit (collateral threshold) awarded to a bidder will be determined based on the guarantor's long-term unsecured senior debt credit ratings, as shown in Table A of the 2009 Energy RFP. The amount of the parent guaranty would normally be equal to the amount of unsecured credit. The guarantor may provide a guaranty for less than that amount, but lowering the guaranty may increase that bidder's collateral requirement (as explained in #E22).

Section 5.6, Bidder Registration, of the RECs RFP requires pre-qualified bidders to provide a pre-bid irrevocable letter of credit (ILOC) in the amount of $10,000. The RFP also specifies the form, date, and validity period for the ILOC.

This requirement is consistent with the 2009 AIU RECs RFP that was successful last year. The Ameren Illinois Utilities have not established a procedure or rules for accepting cash or other collateral in place of the pre-bid ILOC. The Procurement Administrator does not consider the ILOC requirement unduly burdensome for bidders. Therefore cash or other collateral cannot be provided as a substitute for the pre-bid ILOC.

The timeline for producing the $10,000 pre-bid letter of credit is very tight, is there any way to expand the schedule?

We will make every effort to turn the final pre-bid letter of credit around earlier than Monday, May 11th, although we cannot guarantee that it will available prior to the date stated in the RFP. The LC will then be due by 5:00 pm CPT on Friday, May 15th, but at that point we will only need a faxed or emailed copy of the LC, in order to give bidders as much time as possible to secure the LC, with the original to follow for delivery on Monday, May 18th.

There are two components to the Bidder Registration process, the Bidder Registration Form and the Pre-Bid Letter of Credit. The Bidder Registration Form will be available to pre-qualified bidders upon notification of pre-qualification and credit status, i.e. no later than Friday, May 8th. The final form of the Pre-Bid Letter of Credit will be available on or before Monday, May 11th. Please see #R11 above for more information about the Pre-Bid LC.

An explanation of why the bidder does not have credit ratings (e.g., privately-held company) will suffice for the pre-qualification application. If we have additional questions as part of the credit review we will follow up with the bidder.

Do bidders filling out pre-qualification applications for only the RECs RFP need to provide audited financial statements as requested on page 4 of the application? This requirement is not discussed in the RFP itself.

Bidders participating in only the RECs RFP do not need to provide financial statements. The same pre-qualification application is being used for all three RFPs involved in the procurement process, and the financial statements were needed for the collateral threshold calculation under the Capacity and Energy RFPs. For the RECs RFP, collateral threshold calculation is based only on credit ratings, as described on pages 9 and 10 of the RFP.

How will bidder credit thresholds be determined for the RECs RFP? If a bidder has already received a credit threshold as part of the Capacity and/or Energy RFPs, does that affect the RECs threshold?

Collateral thresholds for the RECs RFP will be determined based on bidder credit ratings as provided in the Pre-Qualification Application relative to the categories in Table A on page 10 of the RFP. Collateral thresholds for RECs contracts are independent of the thresholds calculated for the Capacity and Energy RFPs.

If a bidder has already completed a pre-qualification package (consisting of a Pre-Qualification Application and Bid Participation Fee) for one of the other RFPs, is any additional information or documentation required to be pre-qualified for the RECs RFP?

No. Each bidder only needs to submit a single pre-qualification package for participation in all three RFPs. Credit thresholds for the RECs RFP will be calculated separately from the threshold for the Capacity and Energy RFPs, but the same credit rating information will be used. Bidders will be notified of their RECs pre-qualification status on or before May 8th.

Section 3.4 of the RECs RFP states that the RECs in each block must "have the same vintage"? Please clarify what it means to have the same vintage.

To have the same vintage, for purposes of this RFP, means only that the RECs must all be generated during the Vintage "Year" of January 2009 to May 2010.

The RFP states that the RECs to be procured are Unit Non-Specific, but the draft REC Contract shows two options under Section 5 (Facility Information), for both Unit-Specific and Unit Non-Specific, how will these options be handled during the RFP process?

As part of the Bidder Registration process, all pre-qualified bidders will be required to attest that the RECs they are bidding will be derived from eligible renewable resources from one of the six REC classes, as included in their bid. The form for making this attestation will br provided to bidders. Also as part of the registration process, we will give bidders the opportunity to declare the source of their RECs in order to streamline the contract execution process if Option 1 (Unit-Specific RECs) is the desired contract structure.

The RECs RFP references two different periods: June 2009 to May 2010 and January 2009 to May 2010, please explain how these are connected.

This RFP is designed to procure RECs for the June 2009 to May 2010 procurement period. RECs generated from January 2009 to May 2010 can be used to meet the procurement target quantity for that period.

The quantity of RECs to be procured and the budget will be presented in the RECs RFP when it is issued on April 20th. In the interim, page 40 the IPA's Procurement Plan has additional information on these subjects.

Is the information from the 2008 AIU RECs procurement available for review prior to the posting of the 2009 documents?