Capacity RFP Q&A - Illinois Power Agency - 2010 Procurement for Ameren Illinois Utilities

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.

How will fractional PRCs that result from the division of awarded PRCs between the three Ameren Illinois Utilities be handled for purposes of contract execution?

The MISO MECT tool allow transfers down to 1/10 (0.1) of a Megawatt.

Contracts must be executed within 3 business days of ICC approval. ICC approval occurred on Wednesday, April 7th, therefore contracts must be executed by Monday, April 12th.

Yes, the results are available through the ICC website.

Why does the definition of Total Exposure Amount indicate that Exposure under Confirmation Agreements for PRCs is calculated based upon 10% of the Remaining Contract Value rather than a mark-to-market calculation or termination payment calculation?

Markets for PRCs are not considered sufficiently liquid to produce consistently reliable mark-to-market calculations or termination payment calculations. Using 10% of Remaining Contract Value is viewed as an equitable approach to managing the AIUs' credit risk in the event a supplier does not deliver PRCs in accordance with its contract obligations, and the AIUs are required to replace such undelivered volumes.

Section 2(c) of the Capacity Confirmation Agreement states that "Each Party agrees that it has a duty to mitigate damages and covenants that it will use commercially reasonable efforts to minimize any damages it may incur as a result of the other Party's performance or non-performance of this Confirmation Agreement."

Given that the April 15th delivery deadline for the 2010/2011 Planning Year is within a few days of contract execution, are bidders required to post performance assurance for these PRCs?

Winning suppliers can deliver PRCs for the 2010/2011 Planning Year immediately upon contract execution in lieu of Performance Assurance.

The name of the Buyer, Party B will change on each agreement.

Why is the Availability Certificate (Annex 3) to the Post-Bid Letter of Credit necessary, and how does it work?

The Availability Certificate may be submitted to an issuing bank by an Ameren Illinois Utility. The purpose would be to request an amendment to the Letter of Credit in order to document that there is a new amount available for drawing under the letter of credit (for example, after a draw has taken place). As indicated within paragraph 5 of the letter of credit, the issuing bank may respond but is not under a specific obligation to respond to such a request.

Assuming that a customer owns behind the meter generation and has not registered the generation as a resource with MISO, is there anything that would preclude a customer from using this generation to meet a capacity obligation during a demand response event? We believe that the MISO will allow this resource to be registered as an LMR, please confirm. Has legislation been enacted by the State of Illinois that would legally prevent behind the meter generation from participating as a capacity resource?

If a customer can work within the rules and regulations of the Midwest ISO to convert its unregistered Behind the Meter Generation into PRCs, then the customer should be able to participate.

It is the responsibility of the bidder to make sure their capacity can be converted to PRCs according the rules and regulations of the Midwest ISO.

Please define "term" as used on page 12, section 5.7 of the RFP. Does term require 24/7 availability for each day (business, non-business and NERC defined holidays) of the awarded month or something else?

When a bidder converts their capacity to a PRC at MISO, the PRC qualifies as providing monthly Capacity for all hours of the term of the PRC.

The Bidder Registration Form is available to Pre-Qualified Bidders for download from the Bidder Registration page.

Could you please propose a change to the pre-bid LC which states how the breakdown of the amount would occur between the 3 Ameren Illinois Utilities in the event of a claim? Otherwise, is it possible to issue 3 separate LC's to the separate entities?

Until circumstances arise that would justify one or more claims, the Ameren Illinois Utilities (AIUs) would not be in a position to identify which utility or utilities would be affected and in what amount or amounts. For the sake of simplicity and to remain consistent with previous successful AIU procurement processes, the AIUs' preference is to receive a single pre-bid letter of credit naming all three AIUs as beneficiaries.

Yes, Generation resources and Demand Response resources will be evaluated on the same basis.

Does a capacity offer have to be available for the entire contract term (ie. 6/2010 to 5/2013) or can the offer commence at any time (ie. 6/2011)? Will each month be evaluated independently or in series?

Bidders may offer bids for any or all of the monthly products, and each monthly product will be evaluated independently.

Similar to previous years, the pre-bid L/C is issued to all three of the AIUs as indicated in the top paragraph of the pre-bid L/C format. "Ameren Illinois Utilities" is not the legal entity name. The three legal entity names are Central Illinois Light Company dba AmerenCILCO, Central Illinois Public Service Company dba AmerenCIPS, and Illinois Power Company dba AmerenIP. If the AIUs need to draw on the letter of credit, the AIUs will, if needed, furnish a W9, which includes taxpayer identification and should serve adequately as proof of formation.

Yes, if a bidder is unsuccessful in the capacity RFP, the AIUs will, upon request, return the bidder's pre-bid letter of credit.

Yes, the capacity bid form will be distributed to pre-qualified bidders with notice of pre-qualification on Monday, March 29th.

Will a redline be posted with the final contract showing the changes from the draft contract, to make reviewing the changes easier?

Yes, we will post a redline showing the changes to the draft contract that were accepted for the final contract.

Is the eligible pool of customers that are able to participate in a DR program for the IPA capacity auction limited to those AIU customers receiving bundled service from the utility (ie. 400 kW and below) or are all customers within the AIU footprint eligible for participation?

DRRs bid into the capacity procurement must meet the criteria listed in section 3.1 (on page 4) of the RFP.

Please provide clarification regarding whether it is a prerequisite that 3rd party Curtailment Service Providers (CSP) have established contracts with end-use customers prior to bidding into the capacity auction?

No, it is not a prerequisite that 3rd party Curtailment Service Providers (CSP) have established contracts with end-use customers prior to bidding into the capacity auction. The winning supplier must deliver PRCs as defined in the Confirmation Agreement in accordance with the Performance, Title & Delivery section of the Confirmation Agreement.

The deadline for the Illinois Power Agency receiving the $500 Bid Participation Fee has been extended to Monday, March 29th, in order to accommodate changes in the fee submission process this year.

If a bidder has credit ratings below Baa3/BBB- and therefore has a collateral threshold of $0, do additional steps need to be taken to be able to offer into the auction? How much would be required on the pre-bid ILOC?

The amount of the pre-bid LC ($100,000 for capacity) is the same for all bidders regardless of the awarded collateral threshold. If a bidder is pre-qualified with a collateral threshold of $0 and is a winner in the RFP, they will need to provide performance assurance (as described in section 5.9 of the RFP) for the total aggregate credit exposure, unadjusted for a collateral threshold, following contract execution.

Are the values in the table on the Capacity RFP page the actual values being requested, or does the percentages quoted above the table need to be applied to those table numbers?

The numbers in the table are the actual values that will be procured, the percentages have already been applied. See also page 3 of the Capacity RFP.

Yes. Another party may post the pre-bid ILOC for a bidder's offer as long as that party uses the final Form of Pre-Bid ILOC provided as Attachment B to the RFP, once it is available.

If a bidder has a contractual agreement already in place with the Ameren Illinois Utilities, is it still necessary to post a Pre-Bid Letter of Credit?

Yes. All bidders must post a Pre-Bid Letter of Credit using the final Form, once it is available.

Can a bidder post cash in lieu of an LC for the Pre-Bid LC requirement where the same terms of the LC would apply.

Section 5.6, Bidder Registration, of the Capacity RFP requires pre-qualified bidders to provide a pre-bid irrevocable letter of credit (ILOC) in the amount of $100,000. The RFP also specifies the form, date, and validity period for the ILOC.

This requirement is consistent with the 2009 Capacity RFP that was successful last year. AIU has not established a procedure or rules for accepting cash or other collateral in place of the pre-bid ILOC. The Procurement Administrator does not consider the ILOC requirement unduly burdensome for bidders. Therefore cash or other collateral cannot be provided as a substitute for the pre-bid ILOC.

Will it be possible to get get feedback on specific contract comments prior to the posting of the final contracts?

No. All comments will be reviewed following the submission deadline, and final contracts will be made available to all bidders and other interested parties as shown in the RFP schedule.

Final bids will only be accepted from 7:00 am CPT to 12:00 noon CPT on 4/5/10. The bid submission form (an Excel document) will, however, be available earlier and can be prepared in advance if so desired and then submitted on the Bid Date. The submission process will consist of uploading the saved Excel file to the secure procurement website.

Does each month require a price and will each month be evaluated separately? �May we submit one price for the months June 2010-May 2011 only to be procured for that term as a whole, but not each month separately?

Bids for each month will be evaluated independently. A price will be required for each 10-MW block bid, although more than one block can be bid at a given price. As stated in section 3.2 of the Capacity RFP: "Bidders may not offer bids with contingencies, such that acceptance of one bid is conditioned upon the acceptance or rejection of another bid." This holds true for bids within the same month and bids between different months.

Section 5.3.1 of the RFP requests the latest 10-K and the latest 10-Q.� Do you need the latest 10-Q if it is prior to the latest 10-K?

Yes, as stated in the RFP, please submit links to the latest 10-Q, latest 10-K, and any 8-Ks filed since the last 10-K or 10-Q, whichever is most recent. Paper copies of these documents do not need to be submitted if the documents are available electronically.