RECs 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.

The same company, APX, that developed and manages the M-RETS and PJM-GATS systems also developed the ERCOT Texas REC trading system ("My RECs"). The "My RECs" tracking system is acceptable for use in this procurement.

(Posted 5/11/10, Updated 5/14/10)

The REP states that full payment will be made for deliveries if the total contract value is less that $100,000. The Draft Agreement currently has this figure set at $50,000. Which value will be the final value?

The $100,000 value is in total across all three companies (AmerenCILCO, AmerenCIPS, and AmerenIP). The Draft Agreement was for AmerenIP only.

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.

Yes, the Illinois Power Agency will collect a $0.15/REC supplier from winning bidders. More information about this form is available to pre-qualified bidders on the Bidder Registration page.

No, RECs may be bid in any integer quantity.

Does the harmonization between the Ameren Illinois Utilities and ComEd procurements extend to include bid evaluation?

No, bid evaluation will take place separately for the two utilities.

If a bidder submits submit multiple bids into the same class, such as IL-Wind, and is awarded multiple bids, does the bidder receive the price of the bid submitted or the average price of the awarded bids. If it is the average, is it weighted?

Please see Section 3 (Deliveries and Quantity) of the Draft REC contract, there is a note under the table which states the following: "[Note that if a supplier wins multiple blocks of a single Class of Resource with different prices, a single quantity will be used for the entire quantity with a fixed price which is the load weighted average of the individual prices rounded to the nearest $0.01]"

Is a redline of the changes in the 2010 draft REC contract relative to the final 2009 REC contract available?

Yes, the redline is posted to the RECs page under the "Documents" section.

Is it necessary to provide separate Bid Participation Fees for the two REC RFPs (Ameren Illinois Utilities and ComEd)?

No, one $500 Bid Participation Fee covers participation in both the 2010 REC RFPs.

The generation period for RECs under this procurement is January 2010 through May 2011.

The IPA has not selected a Procurement Administrator for the long-term renewable resource procurement. Once a Procurement Monitor has been selected, a link to their website will be available on the ICC's 2010 procurement process website.

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 REC tracking systems. Suppliers will retire RECs on behalf of the Utilities. Suppliers will bear any costs associated with retiring the RECs.

If a bidder is not located in PJM or MISO and is not currently a member of a RECs tracking system, how should that bidder certify their RECs?

Both PJM GATS andd M-RETS allow generators outside of their ISO service areas to register with them.

If a bidder's Collateral Threshold is not adequate to cover the full amount of Performance Assurance, is it possible to avoid posting a guaranty, letter of credit or cash?

Yes, because RECs generated as early as January 1, 2010 will be accepted, a winning bidder can deliver all or a portion of their awarded quantity on the contract Effective Date, which would reduce the Remaining Contract Value that Performance Assurance would be posted to cover.

Do bidders need to submit one Pre-Bid Letter of Credit, or three (one for each Utility)?

Bidders only submit one Pre-Bid ILOC, which covers all three Utilities.

Will winning bidders execute a single contract covering all three Ameren Illinois Utilities, or three contracts, one with each Ameren Illinois Utility?

Winning RECs bidders will execute three contracts, one with each Ameren Illinois Utility.

If an unrated entity posts a guaranty from a creditworthy parent, what is the methodology for determining the dollar amount of this unconditional guaranty?

The amount of unsecured credit (collateral threshold) awarded to a bidder will be determined based on the guarantor's long-term unsecured senior debt credit ratings, as shown in Table A of the 2010 RECs RFP. The amount of the parent guaranty would normally be equal to the amount of unsecured credit. The guarantor may provide a guaranty for less than that amount, but lowering the guaranty may increase that bidder's collateral requirement.

Section 5.7, Bidder Registration, of the RECs RFP requires pre-qualified bidders to provide a pre-bid irrevocable letter of credit (ILOC) in the amount of $10,000. The RFP also specifies the form, date, and validity period for the ILOC.

This requirement is consistent with previous RFPs in Illinois. The Ameren Illinois Utilities have 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.

There are two components to the Bidder Registration process, the Bidder Registration Form and the Pre-Bid Letter of Credit. The Bidder Registration Form will be available to pre-qualified bidders upon notification of pre-qualification and credit status, i.e. no later than Tuesday, April 27th. Final approved modifications to the form of the Pre-Bid Letter of Credit will be available on or before Monday, May 3rd.

If a bidder in the RECs RFP does not have credit ratings, what information should be provided?

An explanation of why the bidder does not have credit ratings (e.g., privately-held company) will suffice for the pre-qualification application. If we have additional questions as part of the credit review we will follow up with the bidder.

Do bidders filling out pre-qualification applications for only the RECs RFP need to provide audited financial statements as requested on page 4 of the application? This requirement is not discussed in the RFP itself.

Bidders participating in only the RECs RFP do not need to provide financial statements. The same pre-qualification application is being used for all three RFPs involved in the procurement process, and the financial statements were needed for the collateral threshold calculation under the Capacity and Energy RFPs. For the RECs RFP, collateral threshold calculation is based only on credit ratings, as described in the RFP.

How will bidder credit thresholds be determined for the RECs RFP? If a bidder has already received a credit threshold as part of the Capacity and/or Energy RFPs, does that affect the RECs threshold?

Collateral thresholds for the RECs RFP will be determined based on bidder credit ratings as provided in the Pre-Qualification Application relative to the categories in Table A on page 10 of the RFP. Collateral thresholds for RECs contracts are independent of the thresholds calculated for the Capacity and Energy RFPs.

If a bidder has already completed a pre-qualification package (consisting of a Pre-Qualification Application and Bid Participation Fee) for one of the other Ameren RFPs (Capacity and/or Energy), is any additional information or documentation required to be pre-qualified for the RECs RFP?

No. Each bidder only needs to submit a single pre-qualification package for participation in all three RFPs. Credit thresholds for the RECs RFP will be calculated separately from the threshold for the Capacity and Energy RFPs, but the same credit rating information will be used. Bidders will be notified of their RECs pre-qualification status on or before April 27th.

The RECs RFP references two different periods: June 2010 to May 2011 and January 2010 to May 2011, please explain how these are connected.

This RFP is designed to procure RECs for the June 2010 to May 2011 procurement period. RECs generated from January 2010 to May 2011 can be used to meet the procurement target quantity for that period.