Illinois Power Agency - 2012 Rate Stability Procurement for Ameren Illinois

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.

Yes, the spring procurements will include a capacity RFP. See #G3 for additional information. To be added to the announcement list for release of the spring procurements, please Subscribe to the mailing list.

Yes, results of past procurements can be accessed on the ICC website. Each year's results are posted under the Public Notices section of the respective pages.

Yes, comparisons of the draft agreements against the final 2011 Confirmation Agreement and REC Agreement are available on the respective RFP pages and the Documents page.

No, the Rate Stability procurements are in addition the annual procurements of capacity, energy and RECS. Documents related to the spring procurements can be reviewed in ICC Docket No. 11-0660. The spring procurement process will begin following the conclusion of the Rate Stability procurement process. The volumes of energy to be procured through the spring RFPs (as described in the IPA Procurement Plan and ICC Order) will be adjusted based on the results of the Rate Stability procurements.

Page 6 of the "Bidder Pre-Qualification Application" mentions a Capacity RFP ("Bidders participating in only the Capacity RFP..."), but there is not mention elsewhere in either the RFP or the Bidder Pre-Qualification Application. Is there a concurrent Capacity RFP or is this a typo?

The reference to a Capacity RFP in the Pre-Qualification Application is a typo, which has now been corrected.

The RFPs, draft contracts, and Pre-Qualification Application materials will be posted on Monday, January 9th.

Section 16-111.5(h) of the Public Utilities Act provides that "[t]he names of the successful bidders and the load weighted average of the winning bid prices for each contract type and for each contract term shall be made available to the public at the time of Commission approval of a procurement event." 220 ILCS 5/16-111.5(h).

The bid submission form indicates that the Procurement Administrator will call to confirm bid receipt on bid day, when will this call be made?

We plan to call each bidder as soon as their bid form is received and checked for errors, usually within a few minutes. It's possible that it may take slightly longer if several bids are received at once.

The procurement targets have not been changed or adjusted downwanrd, 650 MW is still the target volume for each term product. Less than 650 MW may be procured for a given product if not enough bids are received that are underneath the benchmarks.

Per the instructions in paragraph 15 of the LC, the original should be sent to:

The unit "block" refers to the 50-MW bidding increment blocks. There are 13 50-MW blocks for each term, resulting in a total of 63 65 total blocks for the procurement.

Could you please define "Bidder"? Further, is an application allowed by a non-owner/operator Bidder who enters into the application/Confirmation Agreement based on an underlying sale between the owner/operator and the non-owner Bidder?

A "Bidder" is an entity submitting a pre-qualification application and bid in response to the RFP. Contingent bids are not permitted, therefore the entity entering into the contract will be bound by the terms of the contract.

Please confirm that a bidder awarded unsecured credit through a guarantor can elect to post cash instead of executing a guaranty.

A bidder awarded unsecured credit through a guarantor can elect instead to provide cash or a letter of credit as collateral, with an unsecured collateral threshold of $0 applied to the bidder.

Yes, the guaranty can be provided by an unaffiliated entity, as long as that entity has been submitted through the pre-qualification process for a credit review.

The form of post-bid letter of credit is included as Exhibit B to the Confirmation Agreement.

Bidders should download the Draft Confirmation Agreement (Attachment A to the RFP) and prepare comments using MSWord redline. Comments can be emailed to aiurfp@levitan.com on or before January 31, 2012. The final Confirmation Agreement will be posted following the review of bidder comments.

As stated in Public Act 097-0616, which mandated the Rate Stability Procurements: "The megawatt volume of the contracts shall be based on the updated load forecasts of the minimum monthly on-peak or off-peak average load requirements shown in the forecasts, taking into account any existing energy contracts in effect as well as the expected migration of the utility's customers to alternative retail electric suppliers."

Bidders will submit a single price for each block bid in a given term, with the same price to apply for each MWh of the term. Please see the posted Energy Bid Form for details on the bid submission format.

There are five transaction Terms listed in the RFP. For a given energy block that a participant offers, can durations shorter than the specified Term be awarded? For example, a bidder offers 50 MW for the Term Jun-13 to May-14. Would the only possible award on that block be a level 50 MW volume for each of the twelve months, or could the administrator select a sub-set of months from Jun-13 to May-14?

For the Rate Stability procurement, the only terms than can be offered are the 12- or 7-month terms specified in the RFP. Single- and multi-month products will be available to bid on in the Spring 2012 Energy RFP, the process for which will begin after the Rate Stability procurements are concluded.

In the ICC's final order on 12/21/11 for the 2012 procurements (Petition for Approval of the 220 ILCS 5/16-111.5(d) Procurement Plan), pp. 22-23 list the volumes that Ameren will procure in 2012. For some months (e.g. Peak SEP13 is 600 MW, Peak OCT13 is 450 MW, Off-peak JUN13 is 550 MW, etc.), the volumes listed for AIC Peak and Off-peak on these pages is less than the 650 MW sought for this procurement. Does this mean that AIC will only procure the minimum month's requirement for a given planning year? Or will AIC over-procure for some months to meet the 650 MW maximum procurement target in this RFP?

The volumes to be procured based on the 2012 Procurement Plan and ICC order for the 2013-14 delivery year represent approximately 50% of the residual volumes shown on page 34 of the procurement plan: ~35% of the load was procured in 2011, 35% is scheduled to be procured in 2012, and the final 30% will be procured in 2013. The 650 MW target for the Rate Stability procurement is not based on the hedging volumes presented in the Procurement Plan and ICC Order, but rather on the full residual load forecast over the procurement period, and may therefore offset IPA Plan volumes scheduled to be procured not only in 2012, but also later years.

If a winning bidder is relying on a guarantor for unsecured credit, the guaranty will be due at contract execution. Ameren will provide collateral requests as necessary after contract execution. The timeline to provide collateral in response to the request is stated in section 11(f)(2) of the final REC Agreement.

Step 2 of the bid evaluation process outlined in Attachment A to the RFP states that bids will be selected "such that the proportional progress toward the WT and PT occurs in parallel." Please clarify how this will work if equal progress toward the WT and PT is not made in Step 1.

To begin Step 2, we will select bids to bring the proportional progress toward the WT and PT to the same level, and will proceed in parallel from that point.

Per the instructions in paragraph 15 of the LC, the original should be sent to:

Yes, cash can be posted as post-bid collateral under the REC Agreement, see Section 11(f).

No, only a letter of credit in the form of Attachment C to the RFP (with acceptable changes) can be posted as Pre-Bid Security. This requirement is consistent with the Illinois Power Agency's prior procurements of capacity, energy and renewable energy credits for Ameren Illinois. The Procurement Administrator does not consider the letter of credit requirement to be unduly burdensome for bidders. Therefore cash or other collateral cannot be provided as a substitute for the pre-bid letter of credit.

The collateral terms for the REC RFP can be found in section 11(f) of the REC Agreement. Information about the ComEd procurement is available here.

Bidders have the opportunity to submit modifications to the pre-bid letter of credit by February 2nd for review by the Procurement Administrator, but this is not required for participation in the procurement. Submission of a $10,000 pre-bid letter of credit by February 7th as part of the registration process is the only letter of credit requirement to participate in bidding.

The spring 2012 REC procurement will be held as described in the IPA Procurement Plan and ICC Order in Docket No. 11-0660. Future IPA procurement plans are expected to provide for the procurement of RECs as required to meet renewable energy resource portfolio standards.

No. RECs can be bid into either the Illinois and Adjacent States classes, which include RECs from Illinois, Wisconsin, Indiana, Iowa, Kentucky, Michigan and Missouri, or the Other States classes, which include RECs from all other states.

The credit and Performance Assurance terms of the REC Agreement can be found in section 11(f).

Yes, the RRBs have been adjusted to account for previous procurement results, the values shown are the residual budgets that are applicable specifically to this procurement.

Are the wind target and PV target equal to 75% and 1.5/3/6%, respectively, of the Maximum REC Targets for each term shown on page 3 of the RFP?

The legislated technology targets will be applied to the entire REC quantity for a given year, and will therefore be set to 75% and 1.5/3/6% of the total quantity procured through the 2010 long-term procurement and the current 2012 Rate Stability procurement. The technology percentages to be procured through the Rate Stability procurement have been adjusted based on the types of RECs procured through the 2010 long-term procurement.

In GATS, RECs are to be transferred to a RECs Reserve Sub-Account, and note a Reservation Reason of "For transfer to AMEREN", and use "EXPT" for the Reason Code. In MRETS, RECs are to be moved to a REC Retirement Sub-Account and not a Retirement Reason of "For transfer to AMEREN", and use "OTH" for the Retirement Type.

Does Ameren Illinois Company hold accounts with the REC tracking systems (M-RETS, PJM Gats, etc.)? Will winning bidders transfer generated to RECs to the Utilities or retire them in the Utilities' name?

Ameren Illinois Company does not hold accounts with the REC tracking systems. Suppliers will retire RECs on behalf of Ameren Illinois Company. Suppliers will bear any costs associated with retiring the RECs.

Does each procurement period represent a fixed price over a 20-yr contract? Or are the only long-term contracts those referenced in the long-term procurement (the bundled contracts)?

No long-term contracts are included in the 2012 Rate Stability RECs procurement. The quantity indicated for each term is specific to that 12- or 7-month period, with each period bid as a separate product.