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Capacity RFP Products Overview The capacity products to be procured include capacity provided under the full requirements contracts that expire on May 31, 2008, which will be replaced by the procurement of the following monthly “Capacity Amounts”:
Documents Bidder Information Session Presentation - February 28th Request for Proposals RFP Attachment A - Confirmation Agreement - Final RFP Attachment B - Form of Pre-Bid Letter of Credit - Final Notice of Intent to Bid
Additional documents can be found on the Procurement
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Q&A #C34: Are the results of the Capacity RFP available? Yes, general information about the Capacity RFP results was released by the ICC and can be downloaded here. (Posted 4/4/08) #C33: Does the definition of "Available" in Section 3 of the Confirmation Agreement mean that as long as a resource is available during the daily peak they get paid for the day? Resources have to be available at the daily peak to get paid for the day. (Posted 3/31/08) #C32: Are planned outages accounted for under the Confirmation Agreement? As stated under the "Commercial Terms for All Transactions" section of the Confirmation Agreement, the definition of Forced Outage includes "any planned or maintenance outages." (Posted 3/31/08) #C31: What Form of Guaranty should be utilized for the Confirmation Agreement? The standard guaranty form used for Energy will be acceptable to use for Capacity provided that the reference to "Confirmation Letter" in the second paragraph (above Section 1 of the guaranty) is changed to "Confirmation Agreement." Each bidder may issue one guaranty to cover its Capacity Contracts by: (1) naming all three of the Ameren Illinois Utilities (Central Illinois Light Company d/b/a AmerenCILCO, Central Illinois Public Service Company d/b/a AmerenCILCO and Illinois Power Company d/b/a AmerenIP) within the first sentence of the guaranty as the "Guaranteed Party"; and (2) making reference to each applicable Confirmation Agreement within the first sentence of the second paragraph of the guaranty (above Section 1). The guarantor would provide a guaranty for the lesser of: (1) the sum of 10% of the "remaining contract value" for each of the three Ameren Illinois Utilities, rounded up in each case to the nearest $10,000 (as indicated in Capacity Confirmation Agreement Section 14(b)); and (2) the sum of the collateral threshold amounts for which the guarantor qualifies (e.g., three contracts, $5 million collateral threshold for each, for a total of $15 million in the case of a bidder with an applicable rating of BBB+/Baa1). An example showing how to calculate the "remaining contract value" may be found #C7 below. (Posted 3/28/08) #C30: Since physical delivery of energy cannot define the precise moment in time when "delivery" or "tender" of this broadly defined "Deliverable Capacity" product with open-ended obligations (an thus open-ended risk of non-performance risk and exposure to penalties) occurs, how does Ameren interpret the agreement with respect to when tender and delivery have occurred and the Supplier’s duty to perform is satisfied with no further risk of liability for non-performance (i.e., liquidated damages, including penalties)? To clarify, this is not just getting to the FM and FO exceptions, but delivery in general. Delivery requirements will be considered met if the capacity is "available" as that term is defined in Section 3 of the Confirmation Agreement. The Ameren Illinois Utilities reserve the right to confirm that the Capacity was available each day at the time of the Ameren Illinois system peak. (Posted 3/28/08) #C29: What assurance do potential Bidders/Supplies have that Ameren will not work actively to implement new requirements or penalties at these same authorities (see #C27), in particular the Ameren Illinois Balancing Authority which is closely tied to Buyer itself, (if not one and the same)? The development of such hypothetical requirements or penalties would involve comments from other market participants in addition to the Ameren Illinois Utilities. In addition, since the Confirmation Agreement is for a fixed quantity of Capacity and places the risk of Forced Outages and Force Majeure on the Ameren Illinois Utilities, it is counter intuitive that they would seek to increase that potential liability by pursuing more stringent requirements or penalties. (Posted 3/28/08) #C28: What, if any, penalties are in place currently from these same authorities (see #C27) for failure to meet said RA requirements/obligations? The Ameren Illinois Utilities are not aware of any current penalties from the authorities. (Posted 3/28/08) #C27: What, if any, RA requirements/obligations are the Ameren Utilities aware of at the SERC, Ameren Illinois Balancing Authority, or State (IL) level. It is the Ameren Illinois Utilities understanding that, while the SERC does not implement a region-wide reserve requirement, SERC policies and procedures call for the local balancing authority to establish a planning reserve margin. Ameren Services, as the local balancing authority, has established a planning reserve margin within the AMIL balancing of 14.3% based on the results of the Midwest Planning Reserve Sharing Group LOLE analysis. The Ameren Illinois Utilities are not aware of any resource adequacy requirements/obligations at the state level. (Posted 3/28/08) #C26: Does Section 2(ii) of the Confirmation Agreement allow for uncapped consequential damanges? Section 7, Limitation of Remedies, Liability and Damages, of the Confirmation Agreement specifically excludes consequential damages, except where expressly provided. With regard to Section 2(ii), the use of the term "costs" is a relatively narrow concept that does not entail consideration of consequential damages. (Posted 3/28/08) #C25: The answers to questions posted as #C23 and #C9 seem to be conflicting: #C23 says there are no penalties for capacity replacement requirements in a forced outage, and #C9 says that the LD Language in the Confirmation Letter specifically mentions penalties that are incurred. Please clarify the distinction. #C23 specifically references forced outage / force majeure situations, which are excepted from the penalties otherwise associated with Section 2. Liability for Non-Performance described in #C9. (Posted 3/28/08) #C24: If the seller does not notify the Buyer of an outage within 90 minutes, are there any penalties or costs to the Seller? The Confirmation Agreement requires the Seller to provide the Buyer "timely notification" of Forced Outages which in no case shall be later than 90 minutes from the time the Seller is required to provide such notification to MISO. The Confirmation Agreement does not include any financial penalties as a result of the failure of the Seller to provide such "timely notification." (Posted 3/27/08) #C23: In the event of a forced outage is the Seller required to provide replacement capacity? Under the confirmation agreement is there any penalty for a Seller not providing replacement capacity? The Seller has the option but not the obligation to provide replacement capacity. There are no penalties for forced outages; however, the Seller will not be paid for capacity when the unit is not available due to a forced outage. (Posted 3/27/08) #C22: In the Capacity Resource(s) field on the Bid Submission form, is it necessary to list exactly which resources are to be used or may bidders list resources that may be used? Do bidders need to submit the capacity of each resource? All capacity resources that may be used must be listed by name and respective CP Node in the appropriate space on the bid form. If bids are from a system of multiple units, each capacity source must be identified by name and CP Node. Bidders do not need to list the capacity of each resource. (Posted 3/26/08) #C21: Can the bid form be downloaded and filled out in advance? Yes. The bid form used for practice bids is the final bid form, it can be downloaded now and filled out in advance, but final, binding bids will only be accepted from 7:00 am to 12:00 noon CPT on Bid Day, March 31st. (Posted 3/26/08) #C20: Will the winning bids be made publicly available in any way? Yes. As with the Energy RFP results, the ICC will release a list of the winning bidders along with the average price for the winning 10-MW blocks for each product. (Posted 3/26/08) #C19: Has the final Confirmation Agreement been posted to the web site? Yes, the final language can be retrieved from the Procurement Information page. Pre-qualified bidders can download an MSWord version of the file after logging in to the Bidder Registration page. (Posted 3/26/08) #C18: Is the unsecured credit bidders were awarded for the capacity procurement the amount for each contract or the total amount? The awarded credit amount is for each contract. For example, if a bidder is awarded $5 million in unsecured credit, that means $5 million for each utility contract, for a total of $15 million. (Posted 3/26/08) #C17: Please confirm that performance bonds in addition to the Pre-Bid Letter of Credit are not required. The $100,000 ILOC for capacity is all that is required for the purposes of meeting pre-bid, credit-related requirements. (Posted 3/20/08) #C16: Would it be possible to use the same pre-bid letter of credit used in the Energy Portion of the RFP for the Capacity Portion of the RFP, with the proviso that certain adjustments would be made to assure all necessary conditions are met. The bidder must take steps to make each adjustment needed that would effectively transform the energy pre-bid letter of credit into a capacity pre-bid letter of credit (including changing the dollar amount, the expiration date, the definition for "Procurement" in section 11, and any other changes needed to bring the format into exact conformity with the standard pre-bid letter of credit for capacity. In the end the Ameren Illinois Utilities will need to hold the exact same pre-bid letter of credit from each bidder in the same amount, with the same period of validity. (Posted 3/20/08) #C15: Please explain what documents are required to meet the March 24th deadline for "Bidder Registration." A complete Bidder Registration Package will consist of an executed Pre-Bid Letter of Credit and a completed Bidder Registration Form, both of which will be made available to bidders on March 17th. The Bidder Registration consists of filling in contact information and requires certifications from a responsible officer of the bidding entity. (Posted 3/12/08) #C14: When is the latest bidders will be informed about the acceptability of any proposed changes to the Pre-Bid Letter of Credit? The final Capacity Pre-Bid Letter of Credit along with a redlined version so that accepted changes from the draft version are easier to review, will be posted as early in the day as possible on March 17th. (Posted 3/12/08) #C13: On what day will the Capacity Pre-Bid Letter of Credit need to be in place? The Capacity Pre-Bid Letter of Credit, along with the Capacity Bidder Registration Form, is due on March 24th at 5:00 CPT. (Posted 3/12/08) #C12: Are other formats for the Capacity Pre-Bid Letter of Credit acceptable? No. All bidders must use the Final Pre-Bid Letter of Credit which will be posted to the procurement web site on March 17th. (Posted 3/12/08) #C11: Will the format for the Capacity Pre-Bid Letter of Credit be identical to the Energy Pre-Bid Letter of Credit that was recently posted the Energy RFP site? The final Capacity Pre-Bid Letter of Credit will be posted on Monday, March 17th. It will be similar to the Energy Pre-Bid Letter of Credit, but not necessarily the same, pending the evaluation of bidder comments. (Posted 3/12/08) #C10: Will the RFP consider capacity resources that are not within the MISO footprint, but rather have firm transmission in place from external resources to deliver to the MISO interface? Yes, the Ameren Illinois Utilities will consider all capacity resources that are deliverable under MISO Module E. (Posted 3/11/08) #C9: Currently there is no capacity real-time traded market for MISO. How will the Ameren Illinois Utilities calculate liquidated damages? Per Section 2. liability for Non-Performance, if Seller fails to provide capacity, Buyer may either (i) purchase substitute or replacement capacity "in a commercially reasonable manner", plus any additional costs, such as penalties, that are incurred, or (ii) calculate the market price "in a commercially reasonable manner." It is not known exactly how Buyer would purchase substitute or replacement capacity or calculate the market price at this time. (Posted 3/11/08) #C8: Can we use an EEI between our company and all three Ameren Illinois Utilities vs. separate confirmation agreements? No, there will be separate Confirmation Agreements with each Ameren Illinois Utility. (Posted 3/11/08) #C7: In the Confirmation Agreement, Section 14-Performance Assurance(b) Buyer Protection: Could you provide an example of the Performance Assurance calculation? How is the "remaining contract value with respect to all outstanding transactions hereunder as estimated by Buyer" calculated? Is it a typical EEI calculation, i.e., net receivable plus MTM? The remaining contract value is the combined value for all the monthly capacity quantities. Using the same example from #C6, the remaining contract value would be calculated as follows:
#C6: In the Confirmation Agreement, Section 14-Performance Assurance(a) Seller Protection: since these are being bid as 10MW 1-month blocks, how would there be two consecutive months of receivables? Could you provide an example of how the Performance Assurance calculation would be done? A seller with a capacity contract with consecutive monthly capacity quantities "that would be due" may calculate the performance assurance as follows. In this hypothetical example the "highest two months of receivables that would be due" is $396,000 for Months 1&2.
#C5: Is there a maximum number of blocks that a bidder can win, i.e., is there a load cap? Bidders may bid for any or all Products in 10-MW blocks up to the full quantity to be procured for each Product. (Posted 3/11/08) #C4: When exactly will the winning bidders receieve a preliminary notification of selection for the Capacity RFP? Winning bidders for the capacity procurement will be notified by the end of the business day on Friday, April 4th. At this point we cannot identify a precise time by which the winning bidders will be notified on that day. (Posted 3/11/08) #C3: When is the bidder practice session for capacity? The bidder practice session for capacity is scheduled to take place at 3:00 pm EST on March 25th. Instructions for accessing the session will be distributed to Pre-Qualified Capacity Bidders. (Posted 2/28/08) #C2: Is the Capacity RFP based on the same ISDA that the Energy RFP is based on? No. The Capacity Confirmation Agreement is not based on the ISDA Master Agreement. (Posted 2/28/08) #C1: Can portions of bids be accepted or are all bids treated as "All or None"? For example, if someone were to bid in 100 MW of capacity at a given price, can 20 MW of that bid be accepted? Bids for Capacity will be submitted in blocks of 10 MW. Therefore, if 100 MW are offered at a given price, 10, 20, 30, or any increment of 10 MW up to 100 MW could be accepted. (Posted 2/27/08) Other questions can be found on the All Q&A page.
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