Competitive Power Solicitations
Assuring Fairness, Efficiency, and Transparency
Industry restructuring has ushered in fundamental changes in the pricing and procurement of wholesale power supply, including increased reliance on competitive solicitations that encompass sophisticated physical and financial products. These products are designed to meet resource adequacy objectives, renewable portfolio goals, and hedge against uncertain commodity prices. Innovative gas supply, storage, and delivery products also provide solicitation opportunities. Robust, competitive results are predicated on bidders’ confidence in the integrity of the procurement process.
LAI is a national leader in providing procurement design and oversight assistance to ensure that state commissions and utilities can bank on the objectivity, fairness, and transparency of the procurement process. We have established a track record of success in facilitating solicitations for short, intermediate, and long-term products that meet resource adequacy, renewable energy, risk management, and financial objectives. We work with clients to define appropriate physical and financial products – full requirements, dispatchable energy, firm on-peak and around-the-clock energy blocks, monthly and annual capacity, heat rate call options, and financial swaps. On behalf of state entities, LAI helps design the procurement process in accord with best industry practice, including the establishment of credit and collateral requirements. In a primary or oversight capacity, we have been responsible for website security and administration to safeguard the integrity of the procurement process. We testify to the fairness and efficiency of the solicitation results. We develop and apply risk versus reward optimization tools to assist in selecting offers that best balance least cost and risk mitigation objectives while satisfying various physical and financial constraints.
LAI has extensive transactional experience in all areas integral to the procurement process. On behalf of state regulatory commissions, utilities, or end users, we have conducted successful competitive solicitations for energy, capacity, ancillary services, and renewable energy credits (RECs). LAI has structured innovative selection criteria for in-state versus out-of-state RECs as well as the decision hierarchy around preferred renewable technologies. We have also monitored electric utilities’ procurement of power for retail customers on behalf of utilities and state commissions. From coast to coast, our procurement experience has resulted in technical innovation and informed decision making to support the procurement of conventional, renewable, and financial products in strict accord with standards of professional excellence.
Our competitive procurement advisory services include:
- Auction design and product definition
- Procurement administration, oversight, and independent assessment
- Supply portfolio risk management and optimization
- Management of bidder communications
- Document control and website security
- Contract negotiation support
- Optimal selection of offers with complex inter-temporal and other constraints
- Credit standards and collateral requirements
- Benchmark price development
- Inter-market regulatory liaison
