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PG&E’s Pre-Issuance Participants’
Conference2019 Multi-Year Resource Adequacy (RA)
Solicitation
June 17, 2019
Safety
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Objective/Next Steps
• Objectives− Share updates to the solicitation structure and process− Receive input from participants who may submit bids into PG&E’s
2019 Multi-Year Resource Adequacy (RA) Solicitation
• Key Takeaways/Goals− Provide transparency with PG&E’s RA position considerations− Take input received from Bidders’ Conference and incorporate
feedback in the Solicitation structure and process prior to issuance
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Agenda
• Topics
– Background– Product Structure– Transaction Types– Position Considerations– 2019-2020 RA Calendar Roadmap– Solicitation Overview– Intermission– Q&A
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Q&A
• Participants were encouraged to submit questions ahead of the conference via an email to the Solicitation mailbox: [email protected]
– Questions submitted prior to the conference will be answered first during the Q&A
• For phone attendees, at any time during this presentation participants should e-mail their questions to the Solicitation mailbox: [email protected]
• PG&E has designated “discussion periods” throughout the presentation. Please hold all comments/questions for these designated sections within the presentation.
• If you would like to submit questions anonymously, use the notecards provided to write down questions and comments during the presentation and we will address them during the Q&A.
• Questions that contain market sensitive information will not be addressed.
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Background – Recent changes to RA Procurement/Sales
• CPUC Decision (D.) 19-02-022 made the following changes:
– Disaggregated local areas from 2 (Bay Area & PG&E Other) to 7 within PG&E’s service territory
– Introduced 3 year local compliance requirement
– Local Compliance Requirement per Year
Year Local Req System Req Flex Req
2020 100% 90% 90%
2021 100% 0% 0%
2022 50% 0% 0%
These changes introduce significantly more individual requirements for LSEs and additional complexity for bid options. 5
Product Structure
Product • Resource Adequacy (RA)– System (Option for Flexible Attribute)– Local (Option for Flexible Attribute)
• Import Allocation Rights (IAR)Pricing • RA – fixed price
• Import Allocation Rights – fixed price Delivery Term • January 2020 through December 2020 for System RA and IAR
• January 2020 through December 2022 for Local RA and SwapsQuantity • Minimum 1MW
• No maximum bid quantity Agreement • Confirm under an EEI Master Agreement
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Transaction Types
• PG&E anticipates the following types of transactions:– PG&E sells System RA (2020)– PG&E sells Local RA (2020, 2021, 2022)– PG&E sells Import Allocation Rights (2020)– PG&E sells Local RA and receives System RA (2020)– PG&E sells Local RA and receives Local RA (2020, 2021, 2022)
[What thoughts do participants have on these transaction types?]
7PG&E is looking to offer multiple products to the market; however, PG&E doesn’t want to engage
in sales that makes it short in either system or local RA.
Position Considerations
Given D.19-02-022, and changes to PG&E’s RA position, there are several considerations PG&E and all LSEs must account for when assessing what it can sell/buy, including:
• Year-ahead draft (July) and final (Sept) allocations from the CPUC• Final Net Qualifying Capacity (NQC) list (Oct)• Changes in RA rules after sales that affect NQC of portfolio• RA availability from resources in PG&E’s RA portfolio• Planned outages• Load migration
[How do the participants take into account uncertainties?]
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LSEssubmit
Final Load Forecast to
CEC
LSEs receiveInitial RA
Requirements and Allocations
from CPUC
LSEs receive Draft
NQC/EFC from CAISO
LSEs receive Final
NQC/EFC from CAISO
*Year 1: 90% System; 90% Flexible;100% LocalYear 2: 100% LocalYear 3: 50% Local
LSEs receive Import
Allocations from CAISO
Oct 31st
PG&E Submits Year-Ahead Compliance
Filing to CPUC & CAISO
JUN AUGJUL SEP 2020DECNOVOCT
LSEs receive Final RA
Requirements and
Allocations from CPUC
2019 – 2020 RA Calendar Roadmap
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[What are some risks with completing the solicitation too early/late?][Do all LSEs know enough to fill their positions in advance of knowing their NQCs in August?]
2021 2022
Potential changes to
NQC of units
Solicitation Overview
Solicitation Schedule (TBD – illustrative dates below)
Event Date/Time (PPT)
1 In-person Solicitation Conference June 19, 2019
2 Counterparties without EEI Master reach out to PG&E Prior to Bid Submission
3 PG&E issues RA Sales Solicitation TBD
4 Participants’ Webinar +3 days
5 Bids Due +3 days (+6 from launch)
6 PG&E Notifies PRG of Shortlist +7 days (+13)
7 PG&E Notifies Shortlisted Participants +5 days (+18)
8 Negotiations +18 days (+36)
9 PG&E Notifies PRG of Intention to Execute List +0 days (+36)
10 Notified Participants Accept their Award +5 days (+41)
11 Target Execution Date +0 days (+41)
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Independent Evaluator (IE)
• Primary role of the IE is to:– Monitor solicitation processes to ensure fair and equal treatment of all
potential counterparties
– Monitor evaluation processes to ensure PG&E has implemented methodology as described and that bids are treated consistently
• The IE may review all proposal data and communications with Participants during official solicitation window
• 2019 Multi-Year RA Solicitation IE is PA Consulting
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Procurement Review Group (PRG)
• Primary role of the PRG is to:− Review and provide feedback on PG&E’s solicitation plan, evaluation
methodology, proposed shortlist and proposed execution list.− PG&E’s policy is to provide the PRG with at least 5 business days to
review the solicitation’s proposed shortlist prior to notifying CPs of their shortlist status.
− PG&E’s policy is to provide the PRG with a least 5 business days for review of contracts prior to execution.
• The CPUC requires that the investor owned utilities provide their PRGs adequate time for review of all relevant items (i.e., shortlists, contracts).
• The PRG may review solicitation documents provided by the participant.
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Required Bid Submission Forms
• Each bid package must be in the format as specified in the 2019 Multi-Year RA Solicitation Protocol:
Attachment Document Type Format Type
ABid Form
(Participant must agree to the Non-Disclosure attestation in the Bid Form)
MS Excel
B Redline of RA Confirmation, if any MS Word
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General Contract Guidelines
To expedite the process:• Participants are highly encouraged (but not required) to have an EEI
Master Agreement in place with PG&E to submit a bid in the Solicitation– To enable an EEI Master Agreement, please contact [email protected]
• PG&E will not sell RA under a WSPP master agreement.
• On PG&E’s confirm, PG&E requests Bidders only modify the following terms:
– Quantity
– Price
– Delivery Term
– Product Type15
Bid Submittal Instructions
• Bids must be submitted via the online platform at Power Advocate. Only accepted registrants are permitted to submit bids:
– Register through Power Advocate. Registration link will be sent at Solicitation issuance.
– To avoid delay in bid submission due to technical difficulties, PG&E strongly encourages you to register well in advance of bid due date.
– All bid documents will be available on PG&E’s Solicitation website, and must be completed and included with each PowerAdvocate Bid submission.
• PG&E will only consider bids that are complete as of the submittal deadline.
• Brokers submitting on behalf of multiple counterparties may do so, but must designate the name of counterparty and ultimate signatory in the Bid Form.
• By submitting a bid(s) into this Solicitation, each participant is required to abide by the confidentiality obligations specified in the Solicitation Protocol.
• Bilateral transactions will not be considered during the solicitation process.16
Example Bid Form – Buy From PG&E
• Bidders are able to specify Term, Transaction Type, System or Local RA, Local Capacity Area, and the Sub-Local Area, RA Price, and Flexible Attribute
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[What are participants thoughts on this bid form design?]
Communications and Website
• PG&E’s website at http://www.pge.com/rfo under “2019 Multi-Year RA Solicitation” will provide everything you need to submit a bid, including (but not limited to) the following:– Solicitation Documents (Bid Form, Confirm, Confidentiality
Agreement)
– Solicitation Schedule
• All solicitation communications should be directed to: – PG&E RA Team at [email protected]
– And copy the Independent Evaluator - TBD
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*PG&E will collect notecards to use for discussion period.
Intermission
Q&A
Appendix
Product Details & Definitions
System • System requirements are based on an LSE’s monthly peak forecast set one year ahead for each Transmission Access Charge (TAC) area in which it serves load.
• 15% Planning Reserve Margin (PRM) applied to adjusted forecast to arrive at requirement.
Local • Local requirements are set three years ahead and updated each year
• Based on generation needed in the local area to meet a 1-in-10 weather year peak and an N-1-1 contingency. There is no PRM.
Flexible • The quantity of economically dispatched resources needed by CAISO to manage grid reliability during the largest three-hour continuous ramp each month. Resources are considered as flexible capacity if they can ramp up or sustain output for 3 hours.
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