2011 dispatchable renewable rfp - el paso electric...electric power supply rfp el paso electric 3...

2011 REQUEST FOR PROPOSALS

FOR

DISPATCHABLE RENEWABLE ENERGY SUPPLY

EL PASO ELECTRIC COMPANY

P.O. Box 982 El Paso, Texas 79960

ISSUE DATE: February 14, 2011

Electric Power Supply RFP

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TABLE OF CONTENTS

1.0 INTRODUCTION ................................................................................................ 1

1.1...... Purpose ..................................................................................................... 1

1.2...... Regulatory Standards .............................................................................. 1

1.3...... Renewable Energy Requirements and Energy/Capacity Needs .......... 3

1.4...... Communications ..................................................................................... 3

1.5...... Confidentiality of Responses ................................................................. 3

2.0 EL PASO ELECTRIC COMPANY SYSTEM DESCRIPTION .............................. 4

2.1...... Overview ................................................................................................... 4

2.2...... Existing Generation Resources .............................................................. 4

3.0 RFP SCHEDULE .................................................................................................. 6

3.1...... RFP Issuance ............................................................................................ 6

3.2...... Notice of Intent to Bid ............................................................................. 7

3.3...... Date for Final Submission of Questions ............................................... 7

3.4...... Proposal Due Date ................................................................................... 7

3.5...... Tentative Date for Best and Final Proposal .......................................... 8

3.6...... Proposal Validity ...................................................................................... 8

3.7...... Interconnection Requirements ............................................................... 8

4.0 SUMMARY OF SUBMITTAL OPTIONS ............................................................. 9

4.1...... Power Purchase Agreements .................................................................. 9

4.2...... Transmission Requirements ................................................................ 10

4.3...... Renewable Resource Certificates ......................................................... 11

5.0 SUBMITTAL PREPARATION INSTRUCTIONS ............................................... 12

5.1...... Completed Proposals ............................................................................ 12

5.2...... Proposal Overview ................................................................................. 12

5.2.1 Executive Summary ........................................................................................ 12


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5.2.2 Type of Proposal ............................................................................................ 12

5.2.3 Technical Information ................................................................................... 12

5.2.4 Economic Information ................................................................................... 13

5.2.5 Delivery of Power ......................................................................................... 133

5.3...... Operations and Maintenance ............................................................... 14

5.4...... Fuel Supply ............................................................................................. 14

5.5...... Regulatory and Environmental Compliance ....................................... 14

5.6...... Project Schedule .................................................................................... 14

5.7...... Financial Capability ............................................................................... 15

5.8...... Capability and Experience of Bidder ................................................... 15

6.0 EVALUATION PROCESS .................................................................................. 16

6.1...... Evaluation for Responsiveness ............................................................ 16

6.2...... Technical Evaluation ............................................................................. 17

6.3...... Economic Evaluation ............................................................................. 17

6.4...... Environmental Evaluation ..................................................................... 17

6.5...... Certificate Evaluation ............................................................................ 17

6.6...... EPE’s Selection of Bids and Discussions with Bidders ....................... 17

7.0 NOTICE OF DISCLAIMER ................................................................................ 18

8.0 ATTACHMENTS ............................................................................................... 19

8.1 Notice of Intent to Bid 8.2 Data for All Projects 8.3 Additional Data for PPA 8.4 Additional Data for Renewable Energy Certificates 8.5 Additional Data for Biofuels Proposal 8.5 NMPRC Renewable Energy Rule, 17 NMAC 9.572


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1.0 INTRODUCTION El Paso Electric Company (“EPE”) is issuing its 2011 Request for Proposals (“RFP”) to solicit competitive proposals for renewable energy certificates (“RECs”) and dispatchable renewable energy resources that meet the requirements of the New Mexico Renewable Energy Act (“REA”) and New Mexico Public Regulation Commission’s (“NMPRC” or “Commission”) renewable portfolio standard (“RPS”) requirements. The REA requires that EPE provide a percentage of its New Mexico retail energy sales from renewable energy resources, as represented by RECs. FOR THIS RFP, EPE WILL ONLY BE CONSIDERING DISPATCHABLE RENEWABLE ENERGY FROM BIOFUEL, BIOMASS, LANDFILL AND GEOTHERMAL RESOURCES. EPE will consider proposals from persons and entities (“Bidders”) responding to this RFP for RECs from the identified renewable energy resource types, with or without physical delivery of the associated energy. NMPRC Rule 572, Renewable Energy as a Source of Electricity, NMAC 17.9.572 (“Renewable Energy Rule” or “Rule”), is attached to this RFP as Attachment 8.6, and Bidders are required to familiarize themselves with its requirements and conform proposals appropriately. Bidders must certify that proposals meet the NMPRC’s Renewable Energy Rule requirements.

1.1 Purpose Proposals received from Bidders in response to this RFP will be used to aid EPE in its efforts to meet the RPS requirements of the NMPRC’s Renewable Energy Rule. EPE’s intent is to acquire RECs only or RECs together with a dispatchable renewable energy resource, taking into consideration the overall reliability, availability, and cost of the renewable resource. This RFP process is intended to facilitate the purchase of these RECs at the best cost to EPE. EPE is interested in fulfilling two requirements through this RFP. First, EPE seeks to acquire at least 19,000 RECs from renewable energy biomass, biogas, landfill or geothermal resources to meet its New Mexico diversity requirements in 2011, 2012, and 2013. EPE will consider proposals for these RECs without the physical delivery of power. EPE will also consider proposals to purchase renewable biofuel supplies that can be delivered to EPE’s system for use at EPE’s local generating units. Second, EPE’s purpose is to obtain two to fifteen megawatts (“MW”) of dispatchable renewable energy with the physical delivery of power. Projects offering delivery of energy must be online by May 1, 2014. Proposals that will be considered by EPE for this renewable energy project of two to fifteen MW must be in the form of a Power Purchase Agreement (“PPA”). The PPA must be for capacity and/or energy delivered to EPE’s systems, with the transfer of associated RECs to EPE.

1.2 Regulatory Standards


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The Renewable Energy Rule defines renewable energy as electrical energy generated by means of a low or zero, emissions generation technology with substantial long-term production potential and generated by use of renewable energy resources that may include solar, wind, hydropower, geothermal, fuel cells that are not fossil fueled, and biomass resources. Biomass resources are fuels such as agriculture or animal waste, small diameter timber, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds in New Mexico, landfill gas and anaerobically digested waste biomass. Renewable energy does not include fossil fuel or nuclear energy. The REA and Rule contain a RPS requiring ten (10) percent of EPE’s New Mexico retail jurisdictional energy sales (stated as an energy requirement) in 2011 through 2014to be met by renewable energy sources, fifteen (15) percent in 2015 through 2019 and twenty (20) percent thereafter. In addition, the Rule mandates that, beginning in 2011, no less than twenty (20) percent of the RPS be met with wind energy, no less than twenty (20) percent be met with solar energy and no less than ten (10) percent be met with other renewable energy technologies described above. The Rule also requires renewable distributed generation in percentages of one and one-half (1.5) percent for the years 2011 through 2014 and three (3) percent beginning in 2015 and thereafter. This RFP is designed to acquire the resources that will allow EPE to meet the 10% criteria for other renewable technologies stated above. The REA and Rule require that EPE’s compliance be demonstrated by RECs. Since EPE must report RECs through the Western Renewable Energy Generation Information System (“WREGIS”), RECs must be provided in a format and with details that meet the requirements of WREGIS and the Rule. RECs must qualify for registration and meet all registration requirements of WREGIS. Pursuant to the REA, the Commission has established a Reasonable Cost Threshold (“RCT”) for renewable energy resources that was adopted by the NMPRC in 2007. The RCT sets a cap on the reasonable price for additional renewable energy resources to meet the RPS, as a percentage of overall customer rates. EPE reserves the right to request that Bidders modify proposals to conform with any revisions to the RCT. The Renewable Energy Rule is subject to modification by the NMPRC, and Bidders are responsible for complying with any such modifications. EPE reserves the right to make changes in its RFP process and evaluation and selection processes and criteria in the event that the Rule, RCT or REA is modified or for any other reason in EPE’s sole discretion.

1.3 Dispatchable Renewable Energy Requirements and Energy/Capacity Needs


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EPE primarily seeks to purchase 19,000 RECs of biofuel, biomass, geothermal, and landfill gas renewable energy resources for 2011, 2012 and 2013. EPE is also interested in purchasing biofuel supplies that can be used to generate renewable energy at EPE’s local generating units. EPE is also in search of the physical, dispatchable delivery of 2 to 15 MW of this same energy type, with the accompanying RECs, that will be available to EPE by May 1, 2014. Bidders who are proposing the dispatchable delivery of energy in the range of two to fifteen MW are required to provide proposals to EPE in the form of a PPA.

1.4 Communications All submittals, inquiries, and communications relating in any manner to this RFP should be directed to the following EPE point of contact:

Ricardo Acosta Director of Resource and Delivery Planning

P.O. BOX 982 Location 135 El Paso, Texas 79960 Fax: (915) 521-4656 E-mail: [email protected] All communication between Bidders and EPE shall be conducted in writing. Oral communications are discouraged and shall not be binding upon EPE.

1.5 Confidentiality of Responses EPE will consider proposals and other information submitted by Bidders to be confidential only if such materials are clearly designated as “Confidential.” Bidders should be aware that information received in response to the RFP will be subject to the review of applicable local, state or federal regulatory agencies, specifically including, but not limited to, the NMPRC. Information submitted in response to the RFP may become subject to federal or state laws pertaining to public access to information as a result of any reviews conducted by the aforementioned agencies. Except as required by regulatory reviews by the NMPRC, EPE will use reasonable efforts to avoid disclosure of information designated as confidential to persons other than those involved with the evaluation, selection and any subsequent negotiations. If a Bidder’s proposal is selected by EPE for inclusion in EPE’s renewable energy portfolio, the Bidder shall cooperate with EPE in making technological descriptions, pricing, and other contract terms publicly available as part of any regulatory approval process that EPE deems necessary or appropriate. EPE will follow applicable orders of the NMPRC such as disclosing price, term or other information required by the NMPRC.


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2.0 EL PASO ELECTRIC COMPANY SYSTEM DESCRIPTION

2.1 Overview EPE is a public utility engaged in the generation, transmission and distribution of electricity in an area of approximately 10,000 square miles in the Rio Grande Valley in west Texas and south central New Mexico. EPE serves approximately 370,000 residential, commercial, industrial and wholesale customers. EPE distributes electricity to retail customers principally in El Paso, Texas and Las Cruces, New Mexico from remote and local generating plants. The EPE service territory extends from west Texas to south-central New Mexico as illustrated in Figure 1. EPE’s Copper, Rio Grande and Newman generating plants are located in the El Paso area. Palo Verde Nuclear Generating Station (“PVNGS”) Units 1, 2, and 3 are located west of Phoenix, Arizona (PVNGS Unit 3 is deregulated in New Mexico). Four Corners Generating Station Units 4 and 5 are located in northwestern New Mexico.

2.2 Existing Generation Resources The net installed generation resources owned by EPE total approximately 1,643 MW in 2010. EPE owns 633 MW of capacity in PVNGS and 104 MW of capacity in Four Corners Generating Station. Of EPE’s net total installed capacity, EPE owns approximately 900 MW of local generation resources which are fueled by natural gas, with fuel-oil burning capability for backup. Local EPE generation resources include 62 MW at Copper Station, 229 MW at Rio Grande Station and 614 MW at Newman Station. EPE also owns approximately 1 MW of capacity from wind energy generation at its Hueco Mountain Wind Ranch, 64 kW of solar generation at Newman Station, and 64 kW of solar generation at Rio Grande Station.


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Figure 1 - EPE Service Territory and Electric System


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3.0 RFP SCHEDULE The following schedule and deadlines apply to this solicitation:

RFP Issuance Date February 14, 2011

Notice of Intent to Bid Due Date March 31, 2011

Date for Final Submission of Questions April 15, 2011

Proposal Due Date May 13, 2011

Tentative Date for EPE Selection of Resources* June 17, 2011

* Any contracts or commitments are subject to approval of EPE’s procurement plans by the NMPRC

EPE reserves the right to modify, cancel or withdraw this RFP and to revise the schedule specified above if, in the sole discretion of EPE, such changes are necessary. To the extent reasonably possible, EPE will inform Bidders that have filed a Notice of Intent to Bid of any schedule change.

3.1 RFP Issuance EPE will extend an invitation to participate in the 2011 Dispatchable Renewable Energy RFP Process to all potential participants it is aware of via the signature confirmation mail method. EPE will post its 2011 Dispatchable Renewable Energy RFP on EPE’s website (epelectric.com) on the RFP issuance date, Monday, February 14, 2011.

Receipt of the RFP invitation should be confirmed via e-mail response from Bidders to EPE’s point of contact, Mr. Ricardo Acosta, to the following e-mail address:

[email protected]


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3.2 Notice of Intent to Bid Bidders should submit a Notice of Intent to Bid, included as Attachment 8.1, by 5:00pm (MST) on Thursday, March 31, 2011. The Notice of Intent to Bid may be submitted via facsimile to Ricardo Acosta at (915) 521-4656, or mailed to Ricardo Acosta, Director of Resource and Delivery Planning, at P.O. Box 982, El Paso, Texas 79960. Failure to submit a Notice of Intent to Bid will foreclose participation in the Bid Process. Receipt of the Notice of Intent to Bid will be confirmed via e-mail response from EPE to the Bidder.

3.3 Date for Final Submission of Questions All questions related to the RFP should be submitted in writing to the following EPE representative:

Ricardo Acosta Director of Resource and Delivery Planning

P.O. BOX 982 Location 135 El Paso, Texas 79960 Fax: (915) 521-4656 E-mail: [email protected] EPE will prepare written responses to questions received and periodically distribute the questions and responses to Bidders that file a timely Notice of Intent to Bid. Responses will be distributed to such Bidders with the question included but will not identify who originally submitted the question. Any questions related to the RFP must be submitted in writing by Friday, April 15, 2011 to ensure a response prior to the proposal due date.

3.4 Proposal Due Date All proposals must be received at EPE’s offices to the attention of Ricardo Acosta at P.O. Box 982, El Paso, Texas 79960 by 5:00pm (MST) on Friday, May 13, 2011. Any proposal submitted after the due date will be excluded from consideration. Proposals should be as complete as possible. A $250 non-refundable filing fee must be submitted with each proposal. Filing fees should be by check made payable to El Paso Electric Company. Three hard copies of the proposal must be submitted. In addition, an electronic copy of the proposal must be submitted on a compact disc or USB. Facsimile submittals shall be excluded from consideration.


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3.5 Tentative Date for Selection of Resources and Bidder Discussions Should EPE choose to initiate discussions with any Bidder(s), the anticipated date for selection of resources and discussion of any potential contract(s) is Friday, June 17, 2011. All contracts, commitments, and/or resource selections are subject to the NMPRC’s approval of EPE’s 2011 Procurement Plan filing to be made on or before July 1, 2011. EPE reserves the right to delay execution of contracts until after NMPRC approval of EPE’s 2011 Procurement Plan, anticipated to occur no later than December 31, 2011.

3.6 Proposal Validity Each Bidder must hold its proposal open and valid for a period of 180 days following the submittal.

3.7 Interconnection Requirements Bidders are responsible for any interconnection costs and arrangements associated with the point of interconnection. The related interconnection costs of the project will be addressed after the short-list has been selected. A meeting will be scheduled with the short-listed candidates to discuss the interconnection requirements and associated costs. After the interconnection requirements and costs have been established for each short-listed proposal EPE will use this information to determine the winning bid and complete the RFP process. For interconnection inquiries relating to this RFP, Bidders must pose questions in writing to EPE’s point of contact:

Ricardo Acosta

Email: [email protected]


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4.0 SUMMARY OF SUBMITTAL OPTIONS Proposals considered by EPE in acquiring RECs will include: RECs only from biofuel, biomass, geothermal and landfill supply-side alternatives, provided that the energy is contracted for delivery in New Mexico; purchases of biofuel supplies for use at EPE’s local generating units, with documentation for REC purposes; or PPAs of capacity and/or energy from the identified renewable resources, including transfer of associated RECs to EPE.

4.1 Power Purchase Agreements EPE will only consider proposals involving power purchases of firm capacity and energy from an existing or proposed renewable energy generation resource within the guidelines outlined in this Section and Section 5, and included in Attachment 8.2 and Attachment 8.3. Transfer of associated RECs must be included with proposals for capacity and/or energy purchases, and RECs must meet all requirements of the Renewable Energy Rule.

Flexibility is afforded Bidders, as may be necessary to meet the requirements of the Rule. A Bidder may propose to increase the size of its proposed project and associated deliveries over time, not to exceed 15 MW. Proposals over 15 MW may not be considered, unless demonstrated to be more economic than EPE’s existing resources after considering overall reliability, availability, dispatch flexibility and cost. EPE has not set a required or preferred length, up to a period of twenty-five years, for any contract term that may arise from this renewable energy RFP. The length of any potential contract will be for a term EPE deems most reasonable and cost effective for its customers. EPE shall have first dispatch rights to the energy. Automatic Generation Control (“AGC”) for EPE control of dispatch levels is highly desirable if an existing or proposed renewable energy generation resource is the source of the capacity and energy supply. However, if AGC capabilities do not exist, the ability for EPE to establish pre-defined schedules is the minimum acceptable standard. Bidders with proposals for renewable resources that are dispatchable (either by AGC or by pre-defined schedules) must provide the data required for Power Purchase Agreement proposals in Attachments 8.2 and 8.3. The Bidder must provide a predictable, specific methodology for capacity and energy pricing. The Bidder is responsible for demonstrating the availability and adequacy of all primary and back-up fuel supplies, including fuel transportation and fuel-related services. EPE will accept an energy pricing formula based on a fuel cost index and a guaranteed conversion rate, or a fixed energy cost proposal. Pricing indices selected by the Bidder must be nationally recognized indices. Bidders must provide 20 years of history for each index, or such history as it exists if less than 20 years. If a proposal involves capacity and associated energy utilizing different types and combinations of generation facilities, proposals shall clearly identify the extent pricing, capacity and/or availability vary based on specific characteristics of the facility and/or ambient conditions. Items identified shall include, but not be limited to, variations in heat rate at various load points and ambient conditions, and other variables that may impact generation output from facilities included in any Bid proposal.


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Must-run or minimum dispatch proposals for renewable energy resources are acceptable. The Bidder should clearly define dispatch expectations for renewable energy resources. The proposal should outline energy limitations that may be caused by factors such as:

Capacity and associated energy sales to other parties Transmission limitations (congestion) Environmental permit limitations, weather condition limitations, or emissions Hours of operation due to staffing or external constraints (e.g., cogeneration

requirements) Fuel supply interruptions Potential volatility in power output to determine the impact of the project on EPE

system control requirements If a potential limitation exists, it should be described in detail in the proposal so that EPE may reflect the limitation in its analysis. EPE reserves the right to request additional information from the Bidder regarding limitations or any other details related to the proposal. AGC for EPE control of dispatch levels is highly desirable. Bidders are responsible for acquiring and maintaining all present and future federal, state and local approvals, licenses, permits or variances, and the specific requirements to construct and/or operate any generation facilities and associated interconnection facilities.

4.2 Transmission Requirements All power and energy generated by the facility proposed to EPE must be delivered to the EPE service territory. For those Bidders wanting to interconnect at the transmission level, Bidders are responsible for any interconnection, transmission, electric losses and scheduling arrangements, and associated payments, required to deliver the power and energy to the point of delivery identified in the proposal on a firm transmission or direct interconnection basis. Bidders are required to identify and provide a description of those arrangements. Please refer to Section 3.8 for additional information. Transmission inquiries relating to this RFP should be directed to the following EPE point of contact:

Ricardo Acosta Email: [email protected]


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4.3 Renewable Resource Certificates EPE will also consider proposals involving purchases of RECs without physical delivery of associated energy from an existing or proposed renewable energy resource within the guidelines of the Rule. Proposals should include the information required in Section 5 (as applicable) and Attachment 8.2 and Attachment 8.5. RECs must correspond to the total output available for actual contracted delivery in New Mexico if the associated energy is not physically delivered to EPE’s system. Bidders must certify that the energy produced that is associated with the RECs meets the NMPRC definition of a renewable energy resource, and that the energy is contracted for delivery in New Mexico. Bidders must also certify that the energy associated with the RECs has not been used to meet a renewable energy portfolio standard or requirement, or voluntary renewable energy tariff or program, by or for another person or entity. Bidders are responsible for acquiring and maintaining all applicable present and future federal, state and local approvals, licenses, permits or variances, and the specific requirements to construct and/or operate any generation facilities and associated connection facilities.

4.4 Renewable Biofuel Supplies EPE will also consider proposals involving purchases of renewable biofuel supplies that can be delivered to EPE’s system to generate renewable energy from EPE’s local generating units. Biofuel supply proposals must include Attachment 8.5 within the proposal, and the supplier must provide sufficient documentation for REC documentation in accordance with the Commission’s Rule.


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5.0 SUBMITTAL PREPARATION INSTRUCTIONS Proposals must be prepared in accordance with the guidelines set forth in this section. Failure to follow the preparation instructions may result in the exclusion of the proposal from consideration. Each proposal should be organized by section as described below. Each page of the proposal shall have the following information in top right corner.

2011 Dispatchable Renewable Energy RFP Name Project Name

All of the following sections shall be completed or identified as “Not Applicable”.

5.1 Completed Proposals All applicable forms appended to this RFP must be completed and returned with the proposal.

5.2 Proposal Overview The proposal should contain a general overview and a summary including the following information, as applicable. 5.2.1 Executive Summary The executive summary should provide an overall description of the proposal. The description should include the type of proposal and the key benefits it will provide to EPE. The summary should include the renewable resource type, technology, size of project, and location of the facility(s) that will be the source of the power supplied for the proposal and should discuss the general business arrangement for the proposal. 5.2.2 Type of Proposal Describe the type of proposal being offered (PPA, biofuel supply, or RECs without physical delivery of the associated energy). 5.2.3 Technical Information The following technical information should be discussed in this section, as applicable for the project proposed.

Description of resources associated with RECs and REC characteristics Major equipment manufacturers Description of the dispatchable renewable resource type, technology, and

configuration Summary of the commercial operating experience of the equipment used or to

be chosen


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Site layout and characteristics (such as lease agreements, water resources, waste disposal, etc.)

Fuel supply Typical day hourly profile Performance guarantees and warranties

5.2.4 Economic Information The following economic information should be discussed in this section, as applicable for the project proposed.

Capacity offered and capacity charge by year Energy cost by year or guaranteed conversion rate and fuel cost index Variable O&M charge and index Start charge and index REC values and costs Liquidated damages, if applicable Limitations on damages and remedies, if applicable Other charges

5.2.5 Delivery of Power Since the facility will be directly interconnected with the EPE system, the interconnection of the short-listed projects will be assessed at a later time. The individual project interconnection-related cost will be added to each bidder’s proposed project cost. For Bidders offering RECs without physical delivery to EPE’s system of the associated energy, describe transmission and/or interconnection arrangements that meet the NMPRC’s requirement that energy associated with the RECs be contracted for delivery in New Mexico.

For bidders offering renewable biofuel supplies, describe arrangements that allow supplies to be delivered to EPE’s system for use in EPE’s local generating units.


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5.3 Operations and Maintenance Discuss the current or expected O&M plan, including staffing, budget, management and control over any facility, authority over the O&M budget, and guarantees on O&M costs. Provide a description of the basic philosophy for performing O&M and include a discussion of contracting for outside services, if applicable.

5.4 Fuel Supply Identify the fuel supply source and discuss contract arrangements. Identify whether the facility has firm fuel transportation under contract, or backup fuel supply to ensure no fuel interruptions. Bidders should describe their fuel supply plan and the extent to which energy costs will be determined relative to delivered fuel costs. Indicate whether the Bidder expects to provide fuel and/or other fuel-related services, including fuel supply management, or if the Bidder prefers a tolling structure.

5.5 Regulatory and Environmental Compliance The Bidder is exclusively responsible for meeting all required federal, state and local permits, licenses, approvals and/or variances that are currently, or become in the future, required to assure the physical delivery of capacity and associated energy in accordance with its proposal. Projects involving facility purchase, new construction and renewable resources are required to demonstrate that all required permits have been attained or provide a specific timeline for future permit approval. Provide information on the following as applicable.

Environmental management Handling and disposal of hazardous and non-hazardous wastes Control, monitoring and recording of atmospheric emissions and noise control Air permit, including hourly maximum emissions of NOx, SOx, CO, VOC, PM

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Water permit, including daily maximum usage Discharge permit, including daily maximum discharge Landfill permit, including daily maximum volume Regulatory permit (siting certificate) FERC license, exemption or preliminary permit number (for hydroelectric

facilities) Local approvals (zoning) Other applicable permits

5.6 Project Schedule

Proposals involving new construction should provide the anticipated time schedule for the permitting, regulatory approvals, design, manufacture, delivery, construction, startup and commission of the facility, and include as applicable performance incentives and delay damages.


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5.7 Financial Capability The financial viability of any proposal must be demonstrated to provide assurance that the Bidder, and any other party involved in the proposal, has adequate financial capability. Each proposal must include the following information at a minimum:

Recent annual report for the Bidder and any other parties involved, or recent copy of audited (or Reviewed) income statement, balance sheet and cash flow statement

Provide annual reports for the 3 most recent fiscal years or consolidated income statement and balance sheet for the 3 most recent fiscal years

Investment rating of Bidder or its parent company by Moody’s and/or Standard & Poor’s, as applicable

Description of any current credit issues raised by rating agencies, banks, or accounting firms

Description of financing for the project, include any financing commitments and available lines of credit

Financial guarantees from affiliates or others, as appropriate o Note: If selected, EPE will request points of contact for financing

partners/institutions and manufacturers providing lines of credit List all lawsuits, regulatory proceedings, or arbitration in which the bidder or its

affiliates or predecessors have been or are engaged that could affect bidder’s performance of its bid

o Identify the parties involved in such lawsuits, proceedings, or arbitration, and the final resolution or present status of such matters

5.8 Capability and Experience of Bidder

The capability and experience of any Bidder must be demonstrated to provide assurance that the Bidder, and any other party involved in the proposal, has adequate competence, resources and skill. Each proposal must include the following information as a minimum.

Description of technical experience, specifically with respect to renewable generation facilities and collaboration efforts with electric utilities, if any

Description of operating and maintenance experience Description of completed projects and customers

o Note: if selected into the shortlist, EPE will request list of projects at different stages of development (completed, under construction, and under development) and will require a point of contact be provided along with a description, size (kW/MW), cost, initiation date, and completion date for each project listed.


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6.0 EVALUATION PROCESS EPE will assess, pursuant to the requirements of the Renewable Energy Rule and the evaluation criteria developed by EPE, the proposals to determine which, if any, will provide the most economical, reliable, and viable alternatives for EPE’s customers. EPE will evaluate all Bids based on price; transmission and interconnection costs; impact of costs on overall retail customer rates; overall diversity, reliability, availability, dispatch flexibility, cost per kWh and life cycle cost on a net present value basis; and other relevant factors, including public benefits. The assessment will consider economic, technical and environmental factors. Favorable proposal characteristics include:

Dispatchable Renewable Energy Project – EPE seeks a dispatchable renewable energy resource, taking into consideration the overall reliability, availability, dispatch flexibility and cost of this renewable energy resource.

Low Cost – EPE seeks proposals that will provide low-cost RECs and associated energy and capacity, as applicable, for its customers.

High Reliability – Power supply alternatives that provide high reliability and performance will provide additional value to EPE.

Completeness and Responsiveness – Proposals must meet all criteria set forth in the RFP. A thorough explanation of all aspects of the proposal should be included. To the extent available, detailed Project Engineering, Environmental, Siting, and Fuels Supply Plans should be provided.

Financial Viability and Creditworthiness– Success of the project relies on the financial capabilities of all parties involved. Bidders should have a proven financial track record.

Environmental Impact – EPE seeks proposals that are capable of securing all environmental permits.

Experience – EPE seeks proposals from Bidders that possess extensive engineering, construction, technical, environmental, operating and maintenance experience, and a history of successful projects.

Compliance with New Mexico renewable energy laws and regulations.

6.1 Evaluation for Responsiveness Each timely submitted proposal received will be reviewed to ensure that it is complete, follows the guidelines set forth in the RFP, and includes all information required for a thorough review. Proposals should be as complete as possible and contain as much detail as is reasonably available. Proposals meeting these threshold criteria will undergo additional technical, economic, and environmental evaluations as described generally below. In EPE’s sole judgment, any proposal deemed materially incomplete or technically deficient may be excluded from further consideration. EPE also reserves the right to seek clarification of proposal information or additional proposal information from Bidders.


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6.2 Technical Evaluation Proposals will be reviewed from a technical perspective to determine that the source of capacity and/or energy will be capable of meeting the requirements of EPE and the Rule consistent with the description set forth in the proposal in a reliable manner, and within the timeframe proposed.

6.3 Economic Evaluation Proposals will be evaluated from an economic standpoint to determine the proposed delivered cost of the resource based on the pricing and operational characteristics of each proposal, as provided in Bidder’s submission package. An economic screening evaluation will be conducted first based on a number of potential dispatch scenarios. A further detailed economic evaluation using production costing models that incorporate the proposal with EPE’s existing resources may also be prepared for the lowest cost alternatives identified in the screening analysis.

6.4 Environmental Evaluation Proposals will be evaluated from an environmental standpoint to determine whether existing resources are in environmental compliance with current regulations, and proposed facilities can be permitted within the timeframe indicated. The overall environmental impact of the facilities will be assessed.

6.5 Certificate Evaluation Proposals will be evaluated for compliance with the REC requirements of the Rule, and to evaluate the cost-effectiveness of the purchase of RECs without delivery of the associated energy to EPE’s system.

6.6 EPE’s Selection of Bids and Discussions with Bidders EPE may initiate contract discussions with Bidder(s), as appropriate, following a review of technical, economic and environmental factors. EPE reserves the right to enter into an agreement at any time with a Bidder who, in the opinion of EPE, will provide the greatest value to EPE and its customers. EPE also reserves the right to pursue contracts with other than the lowest price Bidder or with other than the Bidder evidencing the greatest technical ability, if EPE, in its sole discretion, determines that to do so would result in the greatest value to EPE and its customers. EPE reserves the right to enter into discussions with multiple Bidders at any time in order to determine and pursue what EPE believes is in the best interest of EPE and its customers. EPE, in its sole discretion, may decline to enter discussions with any Bidder, may terminate negotiations with any Bidder, and/or decline to select any Bidder at any time during the RFP process.


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7.0 NOTICE OF DISCLAIMER EPE has prepared the information provided in this RFP to assist interested persons and entities in making a decision whether to respond with a proposal. EPE reserves the right to modify, change, supplement or withdraw the RFP at its sole discretion. No part of this document or any other correspondence from EPE, its employees, officers or consultants shall be taken as legal, financial or other advice, nor as establishing a contract or any contractual obligations. All communication between Bidders and EPE shall be conducted in writing. EPE makes no representations or warranties regarding the completeness of the information contained within the RFP and does not purport that this RFP contains all of the information needed for Bidders to determine whether to submit a proposal. Neither, EPE nor its employees, officers, or consultants will make, or will be deemed to have made, any current or future representation, promise or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information contained within the RFP or any other information provided to Bidders. Bidders who submit proposals do so without legal recourse against EPE, or EPE’s directors, management, employees, agents or contractors, due to EPE’s rejection, in whole or in part, of their proposal or for failure to execute any agreement with EPE. EPE shall not be liable to any Bidder or to any other party, in law or equity, for any reason whatsoever related to EPE’s acts or omissions arising out of, or in connection with, the RFP process. EPE reserves the right to reject, for any reason, any and/or all proposals. EPE further reserves the right to waive any irregularity or technicality in proposals received, or to consider alternatives outside of this solicitation, at its sole discretion, to satisfy its RPS requirements or other capacity and energy needs. In addition, EPE reserves the right, in its sole discretion, to modify or waive any of the criteria contained herein and/or the process described herein. No Bidder will have any claim whatsoever against EPE, its employees, officers, or consultants arising from, in connection with, or in any way relating to this RFP. Without limiting the generality of the foregoing, each Bidder agrees, by and through its submission of a proposal, that rejection of a proposal will be without liability on the part of EPE, its employees, officers, or consultants, nor shall a Bidder seek recourse of any kind against any of the foregoing on account of such rejection. The filing of a proposal shall constitute an agreement of the Bidder to each and all of these conditions. Each Bidder and recipient of this RFP is responsible for all costs incurred in evaluating, preparing and responding to this RFP. Any other costs incurred by any Bidder during negotiations are also the responsibility of the Bidder.

Attachments

El Paso Electric 19

8.0 ATTACHMENTS

8.1 Notice of Intent to Bid 8.2 Data for All Projects 8.3 Additional Data for PPA

8.4 Additional Data for Renewable Energy Certificates 8.5 Additional Data for Biofuels Proposals 8.6 NMPRC Renewable Energy Rule, 17 NMAC 9.572

Attachment 8.1 – Notice of Intent

El Paso Electric 8.1 - 1

8.1 Notice of Intent to Bid

1. Company Name: 2. Company Address: 3. Contact Person Information:

Name

Title/Position

Mail Address

Courier Address (if different)

Telephone Number

Fax Number

E-mail Address

4. Type of Project or Bid to be Proposed:

5. Location, Size (MW) and Interconnection Point of Project (if available):

6. Authorized Signature:

Name:

Title:

7. Date: The Notice of Intent to Bid may be submitted via facsimile to Ricardo Acosta at (915) 543-2040, or mailed to Ricardo Acosta, Direct of Resource and Delivery Planning, at P.O. Box 982, Location 135, El Paso, Texas 79960. Receipt of the Notice of Intent to Bid will be confirmed in an e-mail from EPE to the Bidder. This form should be

Attachment 8.1 – Notice of Intent


delivered to the above address no later than 5:00pm (MST) on Thursday, March 31, 2011.

Attachment 8.2 – Data for All Projects


8.2 Data for All Projects

1. Project Location: State: County: City:

Section: Township: Range:

2. Provide a general description of the renewable resource project:

Bidders offering renewable energy certificates do not need to provide any other data on Attachment 8.2. For those Bidders, please provide the additional data required on Attachment 8.5.

Bidders requesting a PPA or who seek an equity purchase or equity participation in a project by EPE must provide the remaining applicable data below.

3. The data below applies to geothermal and biomass resources that generate power using traditional prime movers such as a steam turbine or combustion turbine and whose output can be dispatched (via AGC or pre-defined schedules). ALL DATA SHALL BE NET OF ANY LOSSES REQUIRED TO DELIVER BIDDER’S POWER TO THE EPE CONTROL AREA. At a minimum, include the following items, if applicable:

a. Net summer capacity offer and capacity charge by year. The information shall

be presented in a table that shows net kW and $/kW/mo. Additional support information:

i. Net summer MW @ 1% wet bulb temperature occurrence: Net capacity shall be based on 20-year average unit conditions, not ‘new and clean’.

ii. For the MW rating above, identify the wet bulb temperature (0F), mean coincident dry bulb temperature (0F), and altitude above sea level (ft.):

b. Primary fuel type: Secondary fuel type:

c. Other unit operating parameters

i. Minimum net unit output (MW) under normal operating conditions:

ii. Maximum number of starts (requests) per day:

iii. Time to bring on-line (minutes):

iv. Minimum on-line time (hours):

Attachment 8.2 – Data for All Projects


v. Minimum off-line time (hours):

vi. Starting reliability (percentage of time the unit will successfully start):

vii. Forced outage rate (%):

viii. Annual overhaul requirements (days/year):

Note: If overhauls follow a periodic pattern such as 10 days each year with 20 days every fourth year, provide that pattern.

d. Describe AGC capabilities:

e. Describe all expected permitted emissions levels:

Attachment 8.6–NMPRC Renewable Energy Rule


8.3 Additional Data for PPA

1. The additional data below applies to geothermal and biomass resources that

generate power using traditional prime movers such as a steam turbine or combustion turbine and whose output can be dispatched (via AGC or pre-defined schedules). BIDDER IS RESPONSIBLE FOR ALL TAXES AND TRANSMISSION COSTS. ALL DATA SHALL BE NET OF ANY LOSSES REQUIRED TO DELIVER BIDDER’S POWER TO THE EPE CONTROL AREA. At a minimum, include the following items, if applicable:

a. Provide either fuel cost ($/MWh) by year OR the following:

i. A guaranteed input/output table showing MMBtu fuel input versus MW output at summer unit conditions. Input/output tables shall be based upon 20-year average unit conditions (not ‘new and clean’) and shall show input (HHV MMBtu/hr based upon the primary fuel type) versus net output (MW) over the full range of the unit’s capability under normal operating conditions at capacity increments of 1 MW (between the maximum and minimum capacity levels), AND

ii. Either a guaranteed year-by-year price forecast or a fuel price index. Bidder need not forecast the index since this will be done by EPE. Any fuel price index shall include a discussion of the proposed index and 20 years of the index history.

b. Provide either a fixed O&M charge ($/kW-year) by year, OR a fixed O&M charge for a Bidder-specified year and fixed O&M index. Any fixed O&M cost index shall include a discussion of the proposed index and 20 years of the index history.

c. Provide either a variable O&M charge ($/MWh) by year OR a variable O&M charge for a Bidder-specified year and variable O&M index. Any variable O&M cost index shall include a discussion of the proposed index and 20 years of the index history.

d. Provide either unit start-up charge ($/start) by year OR a unit start-up charge for a Bidder-specified year and a start-up charge index. Bidder need not forecast the index since this will be done by EPE. Any start-up cost index shall include a discussion of the proposed index and 20 years of the index history.



8.4 Additional Data for Renewable Energy Certificates

Bidders offering renewable energy certificates should provide sufficient data and information that will allow EPE to meet certification requirements imposed by the Rule, as may be modified by the NMPRC or New Mexico Legislature. RECs must qualify for registration and meet all registration requirements of WREGIS. BIDDER IS RESPONSIBLE FOR ALL TAXES AND TRANSMISSION COSTS. 1. Provide a detailed description of the generating facilities and provide a verification

methodology to track the sale, transfer or disposition of renewable energy produced in association with the renewable energy certificates to ensure energy is not used for or counted toward, the New Mexico renewable energy portfolio standard or requirements, or voluntary tariff program, by or on behalf of another utility:

2. Provide a description of delivery points and transmission and/or interconnection

facilities within New Mexico:



8.5 Additional Data for Biofuels Proposals

1. Provide a description about the specifics on Biogas source: 2. Provide a details about all the RECs and the certificate application details, tell if

these REC’s are within Texas or New Mexico or both, and which EPA or state programs they qualify for:

3. In addition, specify whether the proposed biogas is guaranteed to meet all

minimum gas pipeline transportation quality specifications. 4. Specify if the biogas certificates themselves are guaranteed or subject to any type

of uncertainty, or curtailment due to facility operation over the term.



8.6 NMPRC Renewable Energy Rule

TITLE 17 PUBLIC UTILITIES AND UTILITY SERVICES CHAPTER 9 ELECTRIC SERVICES PART 572 RENEWABLE ENERGY FOR ELECTRIC UTILITIES 17.9.572.1 ISSUING AGENCY: New Mexico Public Regulation Commission. [17.9.572.1 NMAC - Rp, 17.9.572.1 NMAC, 8-30-07] 17.9.572.2 SCOPE: A. All electric public utilities are subject to 17.9.572.1 through 17.9.572.19 NMAC. B. Rural electric distribution cooperatives are subject to 17.9.572.1 through 17.9.572.6, 17.9.572.13, 17.9.572.20 and 17.9.572.21 NMAC. [17.9.572.2 NMAC - Rp, 17.9.572.1 NMAC, 8-30-07] 17.9.572.3 STATUTORY AUTHORITY: NMSA 1978 Sections 62-16-7 and 62-16-9. [17.9.572.3 NMAC - Rp, 17.9.572.3 NMAC, 8-30-07] 17.9.572.4 DURATION: Permanent. [17.9.572.4 NMAC - Rp, 17.9.572.4 NMAC, 8-30-07] 17.9.572.5 EFFECTIVE DATE: August 30, 2007, unless a later date is cited at the end of a section. [17.9.572.5 NMAC - Rp, 17.9.572.5 NMAC, 8-30-07] 17.9.572.6 OBJECTIVE: The purpose of this rule is to implement the Renewable Energy Act, NMSA 1978 Section 62-16-1, et seq., and to bring significant economic development and environmental benefits to New Mexico. [17.9.572.6 NMAC - Rp, 17.9.572.6 NMAC, 8-30-07] 17.9.572.7 DEFINITIONS: Unless otherwise specified, as used in this rule: A. procure means to generate or purchase renewable energy and/or renewable energy certificates or to commit to generate or purchase renewable energy and/or renewable energy certificates; B. public utility means an entity certified by the commission to provide retail electric service in New Mexico pursuant to the Public Utility Act but does not include rural electric cooperatives; C. reasonable cost threshold means the cost established by the commission above which a public utility shall not be required to add renewable energy to its electric energy supply portfolio pursuant to the renewable portfolio standard; D. renewable energy means electrical energy generated by means of a low or zero emissions generation technology with substantial long-term production potential and generated by use of renewable energy resources that may include solar, wind, hydropower resources brought into service after July 1, 2007, geothermal, fuel cells that are not fossil fueled and biomass resources; biomass resources are fuels, such as agriculture or animal waste, small diameter timber, salt cedar and other phreatophyte or woody vegetation removed from river basins or watersheds in New Mexico, landfill gas and anaerobically digested waste biomass; renewable energy does not include fossil fuel or nuclear energy; E. renewable energy certificate means a document evidencing that the enumerated renewable energy kilowatt-hours have been generated from a renewable energy generating facility, and shall represent all of the environmental attributes associated with the generation of renewable energy; F. renewable portfolio standard means the percentage of retail sales by a public utility to electric consumers in New Mexico that is required to be supplied by renewable energy;



G. fully diversified renewable energy portfolio is one in which no less than twenty percent of the renewable portfolio standard requirement is met using wind energy, no less than twenty percent is met using solar energy, no less than ten percent is met using one or more of the other renewable energy technologies, as defined by this section, and no less than the following percentages are met through distributed generation: (1) no less than one and one-half percent for calendar years 2011 through 2014; and (2) no less than three percent beginning in calendar year 2015; H. emissions means all emissions regulated by state or federal authorities, including but not limited to all criteria pollutants and hazardous air pollutants, plus mercury and carbon dioxide (CO2); I. distributed generation means electric generation sited at a customer’s premises, providing electric energy to the customer load at that site and/or providing electric energy to a public utility or a rural electric distribution cooperative for use by multiple customers in one or more contiguous distribution substation service areas. [17.9.572.7 NMAC - Rp, 17.9.572.7 NMAC, 8-30-07] 17.9.572.8 LIBERAL CONSTRUCTION: This rule shall be liberally construed to carry out its intended purposes. If any provision of this rule, or the application thereof to any person or circumstance, is held invalid, the remainder of the rule, or the application of such provision to other persons or circumstances, shall not be affected thereby. [17.9.572.8 NMAC - Rp, 17.9.572.8 NMAC, 8-30-07] 17.9.572.9 RELATIONSHIP TO OTHER COMMISSION RULES: Unless otherwise specified, this rule does not supersede any other rule of the commission but supplements rules applying to public utilities. [17.9.572.9 NMAC - Rp, 17.9.572.9 NMAC, 8-30-07] 17.9.572.10 RENEWABLE PORTFOLIO STANDARD: A. Each public utility must develop a reasonable cost renewable energy portfolio. In developing its renewable energy portfolio, a public utility shall take into consideration the potential for environmental and economic benefits to New Mexico. Renewable energy resources that are in a public utility’s electric energy supply portfolio on July 1, 2004 shall be counted in determining compliance with this rule. However, renewable energy sold to customers through a premium-priced renewable energy tariff shall not be counted in determining compliance with this rule. Other factors being equal, preference shall be given to renewable energy generated in New Mexico. B. The renewable portfolio standard shall be no less than five percent (5%) of annual retail jurisdictional energy sales for calendar year 2006 and six percent (6%) for calendar years 2007 through 2010, except as modified by Subsection C of this section. The renewable portfolio standard shall be no less than ten percent (10%) for calendar years 2011 through 2014. The renewable portfolio standard shall be no less than fifteen percent (15%) for calendar years 2015 through 2019. The renewable portfolio standard shall be no less than twenty percent (20%) for calendar year 2020 and subsequent years. C. The renewable portfolio standard will be reduced, as necessary, to limit the kilowatt-hours of renewable energy procured by a public utility for nongovernmental customers at a single location or facility, regardless of the number of meters, with consumption exceeding ten million kilowatt-hours per year. A public utility shall limit the amount of its renewable portfolio standard so that the additional cost of the standard, inclusive of all interconnection and transmission costs, to each customer on and after January 1, 2006, does not exceed the lower of one percent of that customer’s annual electric charges or forty-nine thousand dollars ($49,000). This procurement limit will increase by one-fifth percent or ten thousand dollars ($10,000) per year until January 1, 2011, when the procurement limit will remain fixed at the lower of two percent of that customer’s annual electric charges or ninety-nine thousand dollars ($99,000). After January 1, 2012, the ninety-nine thousand dollar ($99,000) limit is adjusted for inflation



by the amount of the cumulative increase change in the consumer price index, urban (CPI-U) published by the bureau of labor statistics between January 1, 2011 and January 1 of the procurement plan year. D. In determining the amount of the reduction specified in Subsection C of this section, a public utility shall assume that electric rates in effect on the day of the procurement plan filing will be in effect for the year during which the procurement reduction will apply. A public utility with a fuel and purchased power cost adjustment clause (FPPCAC) shall also assume that FPPCAC charges to the customer during the year immediately preceding its procurement plan filing will be in effect, in identical amounts, during the year for which the procurement reduction will apply. E. A public utility that, as of July 1, 2004, has an all-requirements contract which would not reasonably permit it to procure renewable energy for purposes of meeting the renewable portfolio standard, may apply to be exempted from the renewable portfolio standard until the earlier of the date of their next contract forward or the first date on which the all-requirements contract is amended or renegotiated, at which time such public utility shall be subject to the renewable portfolio standard. A public utility seeking such exemption shall file with the commission a petition for exemption no later than January 31, 2005. The petition shall include a copy of the public utility’s all-requirements contract as well as testimony and exhibits demonstrating that the public utility is unable, with due diligence, to procure renewable resources needed to meet the renewable portfolio standard. The public utility shall serve a copy of the petition on staff, the attorney general, and all parties to the public utility’s last general rate case. [17.9.572.10 NMAC - Rp, 17.9.572.10 NMAC, 8-30-07] 17.9.572.11 REASONABLE COST THRESHOLD: A. A public utility shall not be required to add renewable energy to its electric energy supply portfolio, pursuant to the renewable portfolio standard, above the reasonable cost threshold established by the commission. B. The reasonable cost threshold for 2006 is one percent of all customers’ aggregated overall annual electric charges, increasing by one-fifth percent per year until January 1, 2011, at which time it will be two percent. As changing circumstances warrant, and after notice and hearing, the commission may prospectively modify the reasonable cost threshold applicable to new contracts, but not the threshold applicable to existing contracts which have been previously approved by the commission as part of a procurement plan to meet a public utility’s renewable portfolio standard. In modifying the reasonable cost threshold, the commission will take into account: (1) the price of renewable energy at the point of sale to the public utility; (2) transmission and interconnection costs required for the delivery of renewable energy to retail customers; (3) the impact of the cost for renewable energy on retail customer rates; (4) overall diversity, reliability, availability, dispatch flexibility, cost per kilowatt-hour and life cycle cost on a net present value basis of renewable energy resources available from suppliers; and (5) other factors, including public benefits, the commission deems relevant. C. The commission may establish reasonable cost thresholds for individual renewable energy technologies. D. In any given year, if the cost to procure renewable energy is greater than the reasonable cost threshold, a public utility will not be required to incur that cost or to procure that resource, provided that the condition excusing performance under the renewable portfolio standard in any given year will not operate to delay the annual increases in the renewable portfolio standard in subsequent years. A public utility that believes its procurement will exceed the reasonable cost threshold shall file with the commission a request for waiver of the renewable portfolio standard for the applicable calendar year. The request shall explain in detail why the public utility cannot procure resources at a cost less than the reasonable cost threshold and shall include an explanation and evidence of all efforts the public utility undertook to procure resources at a cost within the reasonable cost threshold. Waiver requests shall be deemed granted if not acted upon within sixty (60) days.



[17.9.572.11 NMAC - Rp, 17.9.572.11 NMAC, 8-30-07] 17.9.572.12 COST RECOVERY FOR RENEWABLE ENERGY: A public utility shall recover the reasonable costs of complying with the renewable portfolio standard through the rate making process. A public utility shall also recover its reasonable interconnection and transmission costs to deliver renewable energy to retail New Mexico customers. Costs that are consistent with commission-approved procurement plans or transitional procurement plans are deemed to be reasonable. A public utility that is permitted to defer the recovery of renewable energy costs pursuant to commission order may, through the ratemaking process, recover from customers that are not subject to the rate impact limitations of Subsection C of 17.9.572.10 NMAC the cumulative sum of those deferred amounts, plus a carrying charge on those amounts. For customers that are subject to the rate impact limitations of Subsection C of 17.9.572.10 NMAC, a public utility may, through the ratemaking process, recover from those customers the cumulative sum of those Subsection C of 17.9.572.10 NMAC limited deferred amounts, plus carrying charges on those amounts. [17.9.572.12 NMAC - Rp, 17.9.572.12 NMAC, 8-30-07] 17.9.572.13 RENEWABLE ENERGY CERTIFICATES: A. Each public utility shall annually establish its compliance with the renewable portfolio standard through the filing of an annual report, as provided in 17.9.572.17 NMAC, documenting the retirement of renewable energy certificates. Effective for services provided on and after January 1, 2015, each rural electric distribution cooperative shall annually establish its compliance with the renewable portfolio standard through the filing of an annual report, as provided in 17.9.572.21 NMAC, documenting the retirement of renewable energy certificates. B. Renewable energy certificates shall contain the following information: (1) the name and contact information of the renewable energy generating facility owner and/or operator; (2) the name and contact information of the public utility or rural electric distribution cooperative purchasing the renewable energy certificate; (3) the type of generator technology and fuel type; (4) the generating facility’s physical location, nameplate capacity in MW, location and ID number of revenue meter, and date of commencement of commercial generation; (5) the public utility or rural electric distribution cooperative to which the generating facility is interconnected; (6) the control area operator for the generating facility; and (7) the quantity in kWh and the date of the renewable energy certificate creation. C. Renewable energy certificates: (1) are owned by the generator of the renewable energy unless: (a) the renewable energy certificates are transferred to the purchaser of the energy through specific agreement with the generator; (b) the generator is a qualifying facility, as defined by the federal Public Utility Regulatory Policies Act of 1978, in which case the renewable energy certificates are owned by the public utility or rural electric distribution cooperative, purchaser of the renewable energy unless retained by the generator through specific agreement with the public utility or rural electric distribution cooperative purchaser of the energy; or (c) a contract for the purchase of renewable energy is in effect prior to January 1, 2004, in which case the purchaser of the energy owns the renewable energy certificates for the term of such contract; (2) may be traded, sold or otherwise transferred by their owner to any other party; such transfers and use of the certificate by a public utility or rural electric distribution cooperative for compliance with the renewable energy portfolio standard do not require physical delivery of the electric energy represented by the certificate to a public utility or rural electric distribution cooperative, so long as



the electric energy represented by the certificate was contracted for delivery in New Mexico, or consumed or generated by an end-use customer of the public utility or rural electric distribution cooperative in New Mexico, unless the commission determines that there is an active regional market for trading renewable energy and renewable energy certificates in any region in which the public utility or rural electric distribution cooperative is located; (3) that are used once by a public utility or rural electric distribution cooperative to satisfy the renewable portfolio standard and are retired, or that are traded, sold or otherwise transferred by the public utility or rural electric distribution cooperative shall not be further used by the public utility or rural electric distribution cooperative; and (4) that are not used by a public utility or rural electric distribution cooperative to satisfy the renewable portfolio standard and that are not traded, sold or otherwise transferred by the public utility or rural electric distribution cooperative may be carried forward for up to four (4) years from the date of creation and, if not used by that time, shall be retired by the public utility or rural electric distribution cooperative. D. Public utilities and rural electric distribution cooperatives are responsible for demonstrating that a renewable energy certificate used for compliance with the renewable portfolio standard is derived from eligible renewable energy resources and has not been retired, traded, sold or otherwise transferred to another party. Public utilities and rural electric distribution cooperatives shall maintain records sufficient to meet the demonstration requirement of this subsection. E. The acquisition, sale or transfer, and retirement of any renewable energy certificates used to meet renewable portfolio standards on or after January 1, 2008 shall be registered with the western renewable energy generation information system (WREGIS) or its direct successor(s), except as provided in Subsection (F) of this section. Certificates whose retirement has been registered by the public utility or rural electric distribution cooperative with WREGIS shall be deemed to meet the requirements of Subsection (D) of this section. F. Renewable energy certificates representing electricity delivered to New Mexico, but generated in a jurisdiction that requires certificates to be registered with a tracking system other than WREGIS, may be used to meet renewable portfolio standards so long as WREGIS lacks the capability to import certificates from that other tracking system. G. The requirement for registration and trading of renewable energy certificates through WREGIS shall not constitute a finding by the commission that a regional renewable energy market is generally available. H. Until such time as the commission has determined that there is a regional market for exchanging renewable energy and renewable energy certificates that is generally available for all public utilities and rural electric distribution cooperatives in the state, any public utility or rural electric distribution cooperative may seek approval from the commission to meet some or all of its renewable portfolio standard using individual renewable energy certificates that represent energy generated by a renewable energy resource within a regional renewable energy market or trading system in any region where the public utility or rural electric cooperative is located. [17.9.572.13 NMAC - Rp, 17.9.572.13 NMAC, 8-30-07] 17.9.572.14 DIVERSIFICATION REQUIREMENTS FOR PORTFOLIOS: Each public utility must meet its renewable portfolio standard requirements using a diversified portfolio of resources, taking into consideration the overall reliability, availability, dispatch flexibility and cost of the various renewable resources as follows: A. Except as provided in this section, public utility procurement plans shall be designed to achieve a fully diversified renewable energy portfolio no later than January 1, 2011. B. Public utilities shall not be required to provide a fully diversified renewable portfolio when doing so would conflict with reasonable cost thresholds established by the commission or when full diversification is prevented by technical constraints or limitations. For the purposes of this section, technical constraints or limitations include, but are not limited to, transmission constraints, limitations on



system integration, limited availability of particular renewable resources, and limitations on system reliability, but shall not include constraints or limitations that the public utility is capable of overcoming at reasonable cost or effort. Notwithstanding the provisions of this Subsection B excusing the failure by a public utility to meet the requirement to provide a fully diversified renewable energy portfolio, each public utility must meet its overall renewable portfolio standard. C. In any year for which a public utility’s annual renewable energy procurement plan does not provide for a fully diversified portfolio, the public utility shall describe its plan for achieving a fully diversified portfolio in a timely manner. D. Renewable energy certificates used to meet the distributed generation diversity requirement may not also be used to meet a resource-specific diversity requirement. [17.9.572.14 NMAC - Rp, 17.9.572.14 NMAC, 8-30-07] 17.9.572.15 VOLUNTARY RENEWABLE TARIFFS: A. Each public utility shall offer a voluntary renewable energy tariff for those customers who want the option to purchase additional renewable energy. B. The voluntary renewable tariff may also include provisions to enable consumers to purchase renewable energy within certain energy blocks and by source of renewable energy. Additionally, each public utility must develop an educational program on the benefits and availability of its voluntary renewable energy program. The tariff, along with the details of the consumer education program, shall be on file with the commission. [17.9.572.15 NMAC - Rp, 17.9.572.15 NMAC, 8-30-07] 17.9.572.16 ANNUAL RENEWABLE ENERGY PORTFOLIO PROCUREMENT PLAN: A. On September 1, 2007, July 1, 2008 and July 1 of each year thereafter, each public utility must file with the commission an annual portfolio procurement plan. The portfolio procurement plan is to include: (1) the cost of procurement in the next calendar year for any new renewable energy resource required to comply with the renewable portfolio standard; (2) the amount of renewable energy the public utility plans to provide in the calendar year commencing sixteen (16) months later, to satisfy the percentages specified in this rule, less any reductions authorized by this rule or by law; (3) an explanation and exhibits demonstrating how the amount specified in Paragraph (2) of this subsection was determined; (4) the reductions, if any, to the renewable portfolio standard for procurements for nongovernmental customers with consumption exceeding ten (10) million kilowatt hours per year and/or due to the reasonable cost threshold, including an explanation and exhibits demonstrating how the reduction was determined; (5) testimony and exhibits that demonstrate that the proposed procurement is reasonable as to its terms and conditions considering price, costs of interconnection and transmission, availability, dispatchability, renewable energy certificate values and portfolio diversification requirements; or (6) demonstration that the plan is otherwise in the public interest. B. A public utility may file a transitional procurement plan requesting that the commission determine that the costs of renewable energy resources that the public utility has committed to or may commit to, prior to the establishment of a reasonable cost threshold, are reasonable and recoverable. A transitional procurement plan is subject to the same filing requirements as an annual portfolio procurement plan. C. A public utility shall serve notice and a copy of its annual portfolio procurement plan filing by first class mail on renewable resource providers requesting such notice from the commission, the New Mexico attorney general, and the intervenors in the public utility’s most recent rate case. A public utility shall also post on its website the most recent and the pending renewable energy portfolio procurement plans.



[17.9.572.16 NMAC - Rp, 17.9.572.16 NMAC, 8-30-07] 17.9.572.17 ANNUAL RENEWABLE ENERGY PORTFOLIO REPORT: On September 1, 2007, July 1, 2008 and July 1 of each year thereafter, each public utility must file with the commission a report on its renewable energy generation or purchases of renewable energy during the prior calendar year. This report shall: A. itemize all renewable energy generation and/or renewable energy certificate purchases and sales; B. list, and include copies of, all renewable energy certificates, including acquired, issued or retired certificates; C. state, for each purchase or sale of a renewable energy certificate, including those to be applied in future years: (1) the seller's name, address, telephone number, and electronic mail address; (2) the purchaser's name, address, telephone number, and electronic mail address; (3) the dates and terms of each transaction involving renewable energy certificates; (4) the quantity of renewable energy certificates purchased or sold; (5) the purchase price; (6) the type of renewable energy resource used to generate the renewable energy and its valuation pursuant to 17.9.572.14 NMAC; and (7) other data useful to the commission in evaluating the public utility's efforts to acquire renewable energy in accordance with its portfolio procurement plan; if the acquired renewable energy was not acquired in accordance with a public utility’s portfolio procurement plan, the public utility must demonstrate that the renewable energy was acquired at the lowest reasonable price consistent with reliability, availability, and portfolio requirements, including renewable resource diversity; and D. describe and quantify the implementation of the voluntary renewable tariff requirements in 17.9.572.15 NMAC. [17.9.572.17 NMAC - Rp, 17.9.572.17 NMAC, 8-30-07] 17.9.572.18 REVIEW BY COMMISSION: The commission shall approve or modify annual portfolio procurement plans and transitional procurement plans within ninety (90) days and may approve such plans without a hearing, unless a protest is filed that demonstrates to the commission’s reasonable satisfaction that a hearing is necessary. The commission may modify a plan after notice and hearing, and may, for good cause, extend the time to approve a procurement plan for an additional ninety (90) days. If the commission has not acted within the ninety -day period, a procurement plan or transitional plan is deemed approved. The commission may reject a procurement plan or transitional plan if the commission finds that the plan does not contain the required information; upon such rejection the public utility’s obligation to procure additional resources will be suspended for the time necessary to file a revised plan. In such instances, the total amount of renewable energy to be procured by the public utility will not change. [17.9.572.18 NMAC - Rp, 17.9.572.18 NMAC, 8-30-07] 17.9.572.19 EXEMPTION AND VARIANCE: Any interested person may file an application for an exemption or a variance from the requirements of this rule. Such application shall: A. identify the section of this rule for which the exemption or variance is requested; B. describe the situation that necessitates the exemption or variance; C. set out the effect of complying with this rule on the public utility and its customers if the exemption or variance is not granted; D. define the result the request will have if granted; E. state how the exemption or variance will be consistent with the purposes of this rule; F. state why no other reasonable alternative is preferable; and G. state why the proposed alternative is in the public interest.



[17.9.572.19 NMAC - Rp, 17.9.572.19 NMAC, 8-30-07] 17.9.572.20 RURAL ELECTRIC DISTRIBUTION COOPERATIVES VOLUNTARY RENEWABLE TARIFFS: Rural electric distribution cooperatives must offer their retail customers a voluntary renewable energy tariff to the extent that their suppliers under their all-requirements contracts make such renewable resources available. Rural electric distribution cooperatives must report to the commission by April 30 of each year concerning the availability to them of renewable energy and the annual demand for renewable energy pursuant to their voluntary tariff. [17.9.572.20 NMAC - Rp, 17.9.572.20 NMAC, 8-30-07] 17.9.572.21 RURAL ELECTRIC DISTRIBUTION COOPERATIVES RENEWABLE PORTFOLIO STANDARD: Each rural electric distribution cooperative organized under the Rural Electric Cooperative Act shall meet a renewable portfolio standard as follows: A. “renewable energy,” “renewable energy certificate” shall have the same definitions as provided in Subsections D and E of 17.9.572.7 NMAC. B. no later than January 1, 2015, renewable energy shall comprise no less than five percent of each distribution cooperative's total retail sales to New Mexico customers; the renewable portfolio standard shall increase by one percent per year thereafter until January 1, 2020, at which time the renewable portfolio standard shall be ten percent. C. the renewable portfolio standard of each distribution cooperative shall be diversified as to the type of renewable energy resource, taking into consideration the overall reliability, availability, dispatch flexibility and the cost of the various renewable energy resources made available to the distribution cooperative by its suppliers of electric power; D. renewable energy resources that are in a distribution cooperative's energy supply portfolio on January 1, 2008 shall be counted in determining compliance with this rule; E. if a distribution cooperative determines that, in any given year, the cost of renewable energy that would need to be procured or generated for purposes of compliance with the renewable portfolio standard would be greater than the reasonable cost threshold, the distribution cooperative shall not be required to incur that cost; provided that the existence of this condition excusing performance in any given year shall not operate to delay any renewable portfolio standard in subsequent years; for purposes of the Rural Electric Cooperative Act, "reasonable cost threshold" means an amount that shall be no greater than one percent of the distribution cooperative's gross receipts from business; F. by March 1 of each year, a distribution cooperative shall file with the public regulation commission a report on its purchases and generation of renewable energy during the preceding calendar year; the report shall include the cost of the renewable energy resources purchased and generated by the distribution cooperative to meet the renewable portfolio standard; the report shall provide the information required below: (1) a summary of the distribution cooperative's purchases and generation of renewable energy and purchases of renewable energy certificates that occurred during the preceding calendar year; (2) the total amount of monies collected by the distribution cooperative from its customers during the preceding calendar year through the assessment of a renewable energy and conservation fee and the balance of funds in the distribution cooperative's renewable energy and conservation fund, as of January 1 and December 31 of the preceding calendar year; (3) the amount of monies withheld by the distribution cooperative from the inspection and supervision fees due to the state that were placed in the renewable energy and conservation fund as a partial match of the renewable energy and conservation fees collected during the preceding calendar year; (4) the amount of monies received by the distribution cooperative from any third party that were placed in the renewable energy and conservation fund; (5) whether and to what extent the distribution cooperative will assess its customers for a renewable energy and conservation fee in the succeeding calendar year; and,



(6) a summary of each renewable energy project, energy efficiency or load management program upon which monies from the renewable energy and conservation fund were expended during the preceding calendar year, which includes: (a) a description of the anticipated benefits to the distribution cooperative's members from each project or program; (b) the amount of monies spent on each project or program; and, (c) the current status of each project or program; G. A distribution cooperative shall report to its membership a summary of its purchases and generation of renewable energy during the preceding calendar year. [17.9.572.21 NMAC - N, 8-30-07] HISTORY OF 17.9.572 NMAC: Pre-NMAC History: None. History of Repealed Material: 17 NMAC 10.572, Renewable Energy Development Program (filed 11-30-98) repealed 7-1-03. 17.9.572 NMAC, Renewable Energy as a Source of Electricity (filed 6-16-03) repealed 1-14-05. 17.9.572 NMAC, Renewable Energy For Electric Utilities (filed 12-29-04) repealed 8-30-07. Other History: 17 NMAC 10.572, Renewable Energy Development Program (filed 11-30-98) replaced by 17.9.572 NMAC, Renewable Energy as a Source of Electricity, effective 7-1-03, 17.9.572 NMAC, Renewable Energy as a Source of Electricity (filed 6-16-03) replaced by 17.9.572, Renewable Energy for Electric Utilities, effective 1-14-05. 17.9.572 NMAC, Renewable Energy for Electric Utilities (filed 12-29-04) replaced by 17.9.572 NMAC, Renewable Energy For Electric Utilities, effective 8-30-07.

2011 dispatchable renewable rfp - el paso electric...electric power supply rfp el paso electric 3...

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