Commonwealth Edison (ComEd) is issuing a request for offers (RFO) to solicit proposals from wind energy generators with proposed projects located in Illinois. Successful bidders will enter into power purchase agreements for wind energy and associated renewable energy credits (RECs) with ComEd. This RFO is for approximately 250 MW of installed wind capacity, equivalent to approximately 700,000 MWh annually, with a commercial operation date no later than December 31, 2006, and delivery under the contract starting January 1, 2007. This RFO is pursuant to the Illinois Commerce Commission’s (ICC) resolution on July 19 (see Wind Energy Weekly #1151, July 22) endorsing the Illinois Governor’s Sustainable Energy Plan as modified based on information gathered through the ICC’s Sustainable Energy Initiative workshops and staff report. This RFO is ComEd’s initial solicitation to assist in furthering the goals set forth by the Governor and the Commission.
The power purchase agreement or agreements between ComEd and the winning wind generator or generators will be for energy and RECs. The generator will deliver the energy to its interconnection point on the regional transmission organization (RTO) grid. ComEd is responsible for selling the energy output of the project into the relevant RTO grid, and for undertaking all activities and paying all charges, including charges for balancing operating reserves, RTO administrative fees, and RTO membership fees, necessary to deliver the energy to the grid. In the event the generator will not interconnect directly with an RTO, ComEd and the generator will mutually agree on an RTO delivery point. The generator will be responsible for any charges associated with delivering the energy to the agreed-upon delivery point. The term of the desired agreement is 20 years.
This RFO is open to all parties who currently own, propose to develop, or have rights to an eligible wind generating facility located in the state of Illinois. The RFO was opened to bidders on September 1. Parties who registered on ComEd’s supplier registration Web site to receive ComEd’s Wind Developer Request for Information of June 29 (see Wind Energy Weekly #1149, July 8) will be sent a password to access the RFO. Other interested parties wishing to respond to the RFO must register on the following Web site: https://exelon.eventmgr.perfectcom/Website/ssr/ssrstep1.aspx .
Once registration is completed and accepted by ComEd, the bidder will receive notification and a password to access the RFO. This RFO solicitation includes an RFO form of response and standard form power purchase agreement. Bidders must register their intent to bid by September 9, using their provided password. The RFO will close on September 30.
The RFO process will be conducted by an independent manager. Bidders must provide non-price information on their project and a single bundled price for energy plus RECs in dollars per megawatt-hour (MWh) for a target nameplate capacity as well as a minimum nameplate capacity that the bidder would be willing to offer at that price to ComEd. Bids must be based on a contract term of 20 years. All offers are considered binding bids. In the event the generator is not interconnected with either the Pennsylvania-New Jersey-Maryland power pool or the Midwest Independent System Operator, the generator is responsible for any costs associated with delivering the energy to the agreed-upon RTO delivery point.
The RFO manager will evaluate the bids first for completeness and then against the non-price criteria to identify bidders with projects in Illinois that can commence delivery to the grid on or before December 31, 2006. Bids judged to be complete and able to deliver on or before that date are stacked in ascending order of price. The RFO manager will add bids to the ascending bid price stack until approximately 250 MW is reached. In the event the winning bid stack exceeds 250 MW, the RFO manager will reduce the MW quantity offered by the highest marginal bidder until approximately 250 MW is reached. More detail on the bid price selection and evaluation process is provided in the RFO. The RFO manager will report the results to ComEd on or about mid-October.
ComEd will confirm that the combination of winning bids does not result in costs to be passed through to ComEd’s customers associated with the products procured in this solicitation that exceed the annual rate cap threshold as described in ICC Staff’s report to the ICC on the Sustainable Energy Initiative. If ComEd determines that the annual rate cap threshold will be exceeded, ComEd will reduce the MW quantity to the bid minimums beginning with the highest marginal bidder until the costs for the solicitation are at or below the rate cap threshold. If the rate cap threshold cannot be satisfied, ComEd will reject the solicitation and instruct the RFO manager to solicit a new RFO.
ComEd and the winning bidders will enter into power purchase agreements and execute contracts in late November, contingent on requested Commission approval of ComEd’s petition in response to the Commission’s resolution endorsing the Governor’s Plan and the effectiveness of the tariff and appropriate internal corporate approval. ComEd reserves the right to enter into contracts with higher cost bidders if agreements with lower cost bidders cannot be executed, assuming the rate cap threshold can still be satisfied. ComEd also reserves the right to not execute agreements with any or all bidders should the company determine that contract terms would not guarantee delivery, would impose costs on the company’s ratepayers in excess of the rate cap thresholds and/or would violate existing regulatory standards.
Winning bidders will be required to post a development fee of $35/kW of nameplate generating capacity with ComEd and a milestone construction schedule prior to executing a power purchase agreement. If the bidder fails to meet the December 31, 2006, commercial operation date, some or all of the development fee will be forfeited. Bidders will also be required to post a delivery security fee equal to the product of the bidder’s nameplate capacity and $70/kW. Winning bidders shall pay ComEd a pro rata portion of the RFO manager’s cost for this solicitation. Payment must be made to ComEd prior to execution of the power purchase agreement. The development fee, milestone schedule, security fee and payment of the RFO manager’s costs are described in more detail in the RFO and/or standard form power purchase agreement.
This RFO represents ComEd’s initial procurement of wind energy to meet the Governor’s Plan. Bidders who are not selected in this RFO are expected to have additional opportunities to respond to future ComEd RFOs in support of the Governor’s Plan. This Program Opportunity Notice is intended to provide general information on ComEd’s 2005 RFO and is not meant as a final description of the RFO. Prior to issuing, ComEd reserves the right to change the final form of the 2005 RFO based on its sole determination.
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