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Renewable Energy Credits RFP Products Overview For the planning year June 1, 2008 through May 31, 2009, the IPA Act requires that the Ameren Illinois Utilities acquire RECs equivalent to 2% of the amount of electricity supplied to eligible retail customers in the prior planning year, 20,719,607 MWh. The target quantity to be procured is 415,000 RECs. Each REC represents the environmental attribute corresponding to one megawatt-hour (1 MWh, or 1,000 kilowatt-hours) of energy produced from qualified renewable energy resources. The IPA Act requires that a minimum of 75% of the RECs must be derived from qualified wind resources, resulting in a target quantity of 315,000 RECs that must be from qualified wind resources. The Ameren Illinois Utilities may purchase less than the quantities stated above if the RECs are deemed to be not “cost effective” in accordance with the IPA Act. (Section 1-75(c)(1)- (2).) The amount of renewable purchases shall be limited such that the estimated average net increase due to the cost of the RECs included in the amountspaid by eligible retail customers is no more than 0.5% of the amount paidper kilowatt-hour by those customers during the year ending May 31, 2007. The RECs procurement budget limit for the June 1, 2008 through May 31, 2009 planning year is $7,730,039. Documents Bidder Information Session Request for Proposals RFP Attachment B - REC Agreement - Final RFP Attachment C - Form of Pre-Bid Letter of Credit - Final Notice of Intent to Bid Resource Information Form Additional documents can be found on the Procurement Information page.
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Q&A Please also visit the General Q&A page. #R18: Are the results of the RECs RFP available? Yes, general information about the RECs RFP results was released by the ICC and can be downloaded here. (Posted 4/22/08) #R17: Do the Ameren Illinois Utilities 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? The Ameren Illinois Utilities do not hold accounts with the RECs tracking systems. Suppliers will retire RECs on behalf of the Utilities. Suppliers will bear any costs associated with retiring the RECs, as stated in Section 9 (Tracking Systems) of the REC Contract. (Posted 4/7/08) #R16: The Renewable Energy Credit Agreement states in Section 4 that the Seller "agrees that any Environmental Attribute associated with or related to the Product will not be sold or otherwise made available to a third party but will be sold to Buyer." Are the Ameren Illinois Utilities seeking any applicable NOx allowances that a generator may receive in addition to RECs? Based on the definitions of a Standard REC and Environmental Attribute, if the avoided NOx emission is associated with the generation of a quantity of electricity by a Renewable Energy Facility and is capable of being measured, verified or calculated, it will be considered part of the REC and should be included and transferred to the Ameren Illinois Utilities with the REC. On the other hand if the NOx allowance is obtained by the bidder as part of a State implementation of the CAIR program they may be retained by the bidder and not be considered part of the transferred REC. Please see Section 4 of the REC Contract, and Schedule P and Section 1.27 of Exhibit C, the Master REC Purchase and Sale Agreement. (Posted 4/3/08, Updated 4/11/08) #R15: Are any additional changes to the posted Final Pre-Bid Letter of Credit acceptable? No. The Pre-Bid Letter of Credit as posted is final and non-negotiable. (Posted 4/2/08) #R14: Are there penalties associated with failure to provide contracted RECs? Suppliers have the option to provide replacement products, as presented in Section 10 of the REC Contract. Suppliers will not be paid for any unsupplied RECs, but no penalties are specified in the contract. (Posted 4/2/08) #R13: In step 3 of Attachment A of the REC RFP, if the least expensive unselected block of RECs are Illinois non-wind (ILN) RECs, and the most expensive selected RECs are adjacent state wind (ASW) or other wind (OSW) RECs, the block of ILN may be prevented from being switched in to avoid reducing the amount of wind RECs selected if the selected blocks are at or below the wind target (even if there is plenty of money remaining in the budget). Step 3 suggests that in such a case the only unselected RECs to be considered to be switched in are ILW RECs. However, to improve the locational mix of the selected blocks, shouldn’t trades of both wind for wind and non-wind for non-wind RECs be considered? This same concern holds for step 4. Yes, in step 3 the evaluation methodology will compare the two switching costs indicated in your question and select the least costly switch. For example, in step 3, if: • The most expensive selected ASN or OSN is $5,800 • The most expensive selected ASW or OSW is $6,000 • The least expensive unselected ILN is $7,000 • The least expensive unselected ILW is $7,500 The least expensive switch to increase the amount of Illinois RECs would be to select the ILN block and remove the ASW or OSW block at an incremental cost of $1,000. However, if this is disallowed because it would violate the wind target, step 3 would compare the cost of switching wind for wind and non-wind for non-wind RECs. Switching in the ILW block for the ASW or OSW block would cost $1,500. Switching the ILN block for the ASN or OSN block would cost $1,200. Therefore the evaluation process will select the ILN block priced at $7,000 and switch out the ASN or OSN block priced at $5,800, because this is the more cost-effective switch. The same logic holds in step 4, as illustrated by the following example: • The most expensive selected OSN is $5,800 • The most expensive selected OSW is $6,000 • The least expensive unselected ASN is $7,000 • The least expensive unselected ASW is $7,500 The least expensive switch to increase the amount of adjacent state RECs would be the ASN block for the OSW block at a cost of $1,000. If this is disallowed because of the wind target, the evaluation would compare the cost of switching wind for wind and non-wind for non-wind blocks. Switching in the ASW block for the OSW block would cost $1,500. Switching in the ASN block for the OSN block would cost $1,200. Therefore, the evaluation process will select the ASN block priced at $7,000 and switch out the OSN block priced at $5,800, because this is the more cost-effective switch. (Posted 3/31/08) #R12: Step 1 of Attachment A of the REC RFP (the bid evaluation methodology) states that if the Budget Limit is reached before the Total REC Requirement (TRR) is reached, the selection is complete. However, at such a point there may be some money left in the REC budget, although insufficient for an offered block of RECs. Does the bid evaluation methodology allow the "leftover" money to be used to potentially improve the selected RECs wind fraction or location priorities? Yes. If there is money leftover that is insufficient to select an additional block of RECs from the unselected pool, the selection process will still continue to proceed to steps 2. However, in this case, steps 2 through 4 will not change the fact that the TRR will still not be met and it will not change the total number of RECs selected. Steps 2 through 4 may only change the specific RECs selected. (Posted 3/31/08) #R11: What is the required online date of the generation facility or plant vintage? RECs sources bid into this procurement must have a commercial operation date on or before June 1, 2008. The only exception is that bidders offering a portfolio of resources may include one or more projects with a COD on or before October 1, 2008, provided that the remaining projects in the portfolio with earlier CODs are capable of providing all the RECs offered. (Posted 3/26/08) #R10: What is the RECs delivery schedule? As stated in Section 3 of the RECs Contract: "Delivery Dates may be 'as generated' but must be between June 1, 2008 and May 31, 2009, inclusive...Buyer will use its best efforts to deliver the Product as soon as practicable (after the creation of the Product) within the Delivery Dates. Recognizing that there may be a lag between the generation of the Product and the actual delivery and verification of the Product through the tracking system, delivery of the Product for a period must be completed no later than the 15th of the month of the second month following the month in which the Product was generated (the 'Reconciliation Period')." (Posted 3/26/08) #R9: Does M-RETS meet the requirements of a Certification Authority for purposes of Section 6 of the REC Agreement? Yes. (Posted 3/20/08) #R8: Does Section 4 of the Renewable Energy Credit Agreement preclude the seller from selling carbon credits that are associated with methane destruction but not associated with the environmental attributes associated with the generation of electricity from a renewable energy facility such as a landfill generator? Landfill gas generation has 2 value components: (1) The value from GHG reduction obtained from the destruction of methane. This can be achieved by generating energy or flaring the gas without generation (Is not dependant on generation). (2) The Standard REC is created by generating energy using a renewable source (landfill gas). In theory the landfill gas Standard REC would also have a GHG component since it would offset fossil fuel generation. These 2 components are exclusive of each other. Based on this the bidder can bid in the Standard RECs created from generating with a renewable source and sell GHG (carbon credits) associated with methane destruction elsewhere. However, they would not be able to sell any carbon credits or any other environmental attribute associated with the Standard REC. (Posted 3/20/08) #R7: The RECs RFP definition of Adjacent States does not include Michigan, will Ameren evaluate REC offers from facilities in Michigan as an "adjacent" state? Since Michigan shares a border within Lake Michigan, to be consistent with the statute, "...they shall be procured in states that adjoin IL and may be counted towards compliance.", Michigan will be included. (Posted 3/20/08) #R6: We are members of and comply with an alternative RECs tracking system. Are alternative tracking systems acceptable for this RFP? M-RETS and PJM GATS are the preferred tracking systems. An alternate tracking system may be acceptable if it can be demonstrated that (1) the system can certify that the RECs are compliant with Illinois statutory RPS requirements, and (2) the system provides a tracking system and registry that can demonstrate and document that RECs were produced by a renewable resource generator, transferred to the utility, and retired by the utility. (Posted 3/20/08) #R5: Please explain what M-RETS and PJM GATS generation tracking systems are. Information about the listed generation tracking systems can be found at: M-RETS: http://www.m-rets.com/ GATS: http://www.pjm-eis.com/gats/gats.html (Posted 3/20/08) #R4: If a bidder has already submitted a Pre-Qualification Application and Bidder Fee as part of the Energy and/or Capacity RFP, are another Application and Fee required to participate in the RECs RFP? No. Only one Bidder Fee and Pre-Qualification Application are required per bidder, as long as all the RFPs a bidder intends to participate in are indicated on the first page of the Pre-Qualification Application. Please note that even if bidders have already submitted a Pre-Qualification Application as part of the Energy and/or Capacity RFP, a Resource Information form for each RECs source is still required in order to participate in the RECs RFP. (Posted 3/14/08) #R3: What constitutes a complete Pre-Qualification Application Package for the RECs RFP? A complete RECs Pre-Qualification Application Package includes the following: (1) a completed Pre-Qualification Application with the necessary signatures, (2) a $500 bidder fee submitted to Levitan & Associates, Inc., (3) an executed Notice of Intent to Bid Form, and (4) a Resource Information form for each source of RECs. (Posted 3/14/08) #R2: How should bidder provide the information requested in sections 5.4.3 through 5.4.6 of the RFP? Bidders should use the provided Resource Information form. Instructions for filling out the form are included as the first worksheet. (Posted 3/14/08) #R1: Will Ameren consider buying REC from individual parties with small Qualifying Facilities (QF) in the range of 500 to 800 kW per year? Yes, provided that (a) bidders offer a minimum of 5,000 MWh RECs that are generated over the planning year (Vintage Year) June 1, 2008 through May 31, 2009, and (b) bidders meet the minimum credit requirements. (Posted 3/12/08) Other questions can be found on the General Q&A page.
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