PacificCorp 2009 RFP

Q2. What is the status of the current RFP with regard to 2012, 2013, 2014 baseload requirements? Is it officially released? Is there is slip in schedule? From the website it is not clear if the draft which was approved by the PUC is active or not.

A2. The Base Load RFP was issued on April 5 and can be located on the PacifiCorp website at http://www.pacificorp.com/Article/Article62880.html in addition to the Independent Evaluators website at http://www.merrimackenergy.com. The RFP has been officially released. Please refer to the RFP Schedule listed on this website. The draft RFP has been updated. The Final Base Load RFP is located on both this website and on PacifiCorp's website.

A3. No, the Company would follow the usual QF path and the credit security requirements would be consistent with the terms and conditions in the QF Power Purchase Agreements. QFs are steered to Attachment 2 in the RFP, which references the generic PPA.

Q4. Can you give details on the bidding process for QFs? Does the bidder need to offer a price, or will that price be fixed by PacifiCorp, based on avoided cost? Is there a capacity payment for QFs?

A5. PacifiCorp is fine with this product as long as it meets the minimum requirements outlined in the appropriate Eligible Resource Alternative contract. (April 27, 2007)

A6. Yes, a list of the participants that attend the Bidders conference will be posted. We will not post names of people if they specifically request their names to be left off the list (April 25, 2007).

Q7. We are interested in looking at the opportunity for contract restructuring. Will potential contracts be provided or is this alternative only available for counterparties PacifiCorp already has the contract in place with?

Q8. How will federal accelerated tax depreciation for qualifying environmental control equipment be addressed in determining PacifiCorp's revenue requirements for APSA acquired resources?

A8. Bidders have the opportunity to specify in the Form 1 Pricing Input Sheet (Field ID 1112) the percentage of total capital from emission control equipment costs. PacifiCorp will use this entry to calculate the amount of capital associated with emission equipment and apply a seven-year straight line depreciation schedule to this portion of the total capital expenditures when calculating total revenue requirements.(May 2, 2007)

Q9. How will state sales and/or property tax exemptions for qualifying environmental control systems/equipment be addressed in determining PacifiCorp's revenue requirements for APSA acquired resources?

A9. State sales and property tax exemptions will not be assumed in the calculation of the revenue requirements unless the assumptions are provided and guaranteed by the Bidders. (May 4, 2007)

Q10. For IGCC APSAs, how will federal accelerated tax depreciation for specific qualifying areas of the facility (such as the gasification equipment) be addressed in determining PacifiCorp's revenue requirements?

A10. Bidders have the opportunity to specify in the Form 1 Pricing Input Sheet (Field ID 1111) the amount of the proposed project that is eligible for the federal investment tax credit. PacifiCorp will apply a 10-year MACRS tax depreciation schedule to the portion of the total capital expenditures when calculating the total revenue requirements. (May 4, 2007)

Q11. For IGCC APSAs, how will state sales or property tax exemptions for qualifying environmental control systems/equipment be addressed in determining PacifiCorp's revenue requirments for resources acquired under APSAs?

Q12. Can PacifiCorp or a bidder expedite the overall RFP process by taking a final short-listed project directly to the Utah Public Service Commission for approval at any time assuming contractual and commercial agreement is reached between the parties?

A12. PacifiCorp could request that the Commission expedite the approval process, but the decision of whether to do so lies with the Commission. Other parties would likely have the opportunity to oppose such a request if they so desired. Neither the text of the RFP nor the law allows a bidder to take a final short-listed project directly to the Utah Public Service Commission -- only the Company may do so.(May 2, 2007)

Q13. Does PacifiCorp intend to negotiate all of the terms and conditions for all resources prior to seeking approval of the Utah Public Service Commission or will PacifiCorp take individual resource options to the Utah Public Service Commission once negotiations for that particular resource are completed?

A13. At this point in time, PacifiCorp has not decided on the details of how it will proceed through the Public Service Commission of Utah approval process. PacifiCorp can take a short-listed project to the Commission for approval as soon as negotiations are completed. This could be done on a project-by-project basis, or as a portfolio. (May 2, 2007).

Q14. Is the submission of a bid to be considered binding upon the Bidder, or may the Bidder include exit clauses that may be exercised beyond the submission of the bid?

A14. The RFP states under Section 2 (G) Effectiveness of Bids ".... Each bid proposal must remain open for acceptance by the Company from the date of submittal through June 15, 2008, unless earlier released in writing by the Company or if the Bidder's proposal does not make the short list." (May 4, 2007)

Q15. In the list of eligible resources for consideration in the RFP, resources must be a minimum of 100 MW or meet one of the exception criteria. IGCC, geothermal, biomass and QFs above 10 MW have been listed as exceptions. The installed capacity of geothermal and biomass installations are typically well below 100 MW and in most cases below 10 MW per installation. Are any other renewable type technologies that are typically below 10 MW installed capacity also going to be considered for exception status?

Q16. If a project can be constructed and become commercial before the RFP initial date of June 2012, will it be acceptable for the resource to sell power under a separate sale arrangement outside of the RFP and then still qualify for the 2012 RFP beginning in June 2012?

Q19. The financial statements that we will include in our submittals are quite voluminous (more than 250 pages). We plan to use the same information for all three of our eligible resource alternatives. This would mean 3 x 10 copies total for you and the Oregon IE. Would you accept one copy of the financials with a note from us that the same data would apply for all three alternatives? Or electronic media submittal?

A20. A regulatory out clause would allow PacifiCorp to terminate the contract to the extent it was not approved by any regulatory Commission. Such a clause is not included in the RFP or in the underlying agreements. (May 8, 2007)

Q23. In the RFQ Bid Form, Part 1, Eligible Resource Alternatives, there are several bid categories. If a responder submits a proposal under "Power Purchase Agreement" that arguably could also be classified as a "Tolling Agreement", a "Restructure of an Existing Power Purchase Agreement", and a QF, does the responder have to submit four separate identical proposals, one in each category and each with a separate $10,000 fee, to avoid having PacifiCorp disqualify it for submitting the bid in the wrong category? If so, does that mean, as well, that a QF seeking a Power Purchase Agreement must submit two identical bids, one as a QF and one as to the proposed Power Purchase Agreement, incurring the $10,000 bid fee twice, in order to avoid disqualification?

A23. The bid fee is outlined on Page 26 and 27 of the RFP. Bidders are allowed to submit alternatives to their base proposal for the required bid fee. A bid in each Eligible Resource Alternative may consist of one base proposal in addition to two alternatives for the same bid fee. The alternatives may consist of a different bid size, contract term, pollution control technologies, carbon capture design components, in-service date and/or pricing structures for the same Eligible Resource Alternative. In addition, bidders will have the option of submitting up to three additional alternatives for a fee of $1,000 per alternative. A proposal for a different Eligible Resource Alternative, at a different site or using a different technology will be considered a separate proposal and will be subject to a separate bid fee. (May 8, 2007)

Q24. Can a responder who submits a qualified proposal by the June 19, 2007 deadline later assign the proposal to a qualified, creditworthy assignee and still have the proposal evaluated and considered in the RFP process?

Q25. For proposed resources that have secured investment tax credits, please specify the dollar amount of the tax credit for which the resource is eligible. The description in the Pricing Input Sheet appears to ask for the amount of secured investment tax credits, rather than the amount of the project that is eligible for ITC, as stated in A10. Is the amount asked for in Field ID 1111 intended to identify the eligible amount for the federal investment tax credit? If so, where is there a mechanism in the Pricing Input Sheet for the bidder to designate the amount (or percentage) of the proposed project that will receive the 10-year MACRS tax depreciation?

A25. PacifiCorp is requesting that bidders supply secured investment tax credit amounts in Field ID 1111. For resources that are eligible for investment tax credits that have not been secured, bidders are encouraged to specify the amount of investment tax credit for which the project is eligible elsewhere in the proposal. (May 11, 2007)

A27. Bidders can bid an APSA and or an EPC resource alternative at Currant Creek. They must be bid as two separate proposals. If it is bid as an APSA there must be contract privity between the Company and the EPC contractor. (May 11, 2007)

Q30. Section 2.H.2.e (page 31 of the RFP) states "All bid proposals must indicated a present ability and commitment to abide by safety standards, no less stringent than PacifiCorp's standards, with respect to the operation, construction and maintenance of any physical resources, facilities, plant or equipment." Please provide a copy of PacifiCorp's safety standards with respect to operation, construction, and maintenance of any physical resources, facilities, plant or equipment so that bidders can evaluate their ability to comply with this requirement.

Q31. On page 22 of the RFP, for Eligible Resources Alternative Exception 11(a) Load Curtailment, it states that "The fuel source type must be specified in the proposal." Can you clarify what "fuel source type" means in the context of load curtailment?

A31. The Proposal submitted in the Request for Proposal will be short-listed on both Eligible Resource and Fuel source type. Load Curtailment is an exception and will only be short-listed on Eligible Resource and not require a fuel source type.

Q32. As I understand it, the proposals should remove all references and names of the bidder. If the bidder is using specific technology for our bid, do you wish to have the provider of the technology, and specific references to the type and name of the equipment blinded as well?

A32. Bidders should blind all references to bidder names from their proposals. If a Bidder is using a specific technology for their bid, the technology and or any specific references to the name of the equipment should not be blinded.(May 20, 2007).

Q33. For submittal of our RFQ response to IE's cure letter, will you accept an email to the personnel listed in the letter. If so, what are the respective email addresses for the personnel listed?

Q34. Is it correct that indicating an Eligible Resource Alternative in the RFQ response is non-binding for submitting a proposal on June 29? If the proposal is not submitted, is it correct that the $10,000 bid fee will not be due?

Q. 35 If a party would like to submit a proposal to lease an existing facility, would that be preposed as an alternative under "Purchase of an Existing Facility" or would it fall under a different category?

A. If the bidder is proposing a transaction involving an existing asset and the bidder has an existing power purchase or power sale contract with the company, then it would fall under Restructuring of an Existing Power Purchase Agreement or an Exchange Agreement or buy back of an existing Sales Agreement. If it is not an existing asset then it would fall under a Power Purchase and or Tolling Agreement with a pricing lease structure. If the bidder is proposing a transaction involving an existing asset and the bidder does not have an existing power purchase or power sale contract with the company, then it would fall under "Purchase of an Existing Facility".

Q 36 For the Eligible Resource Alternative "Restructuring of an Existing Power Purchase Agreement", does the existing agreement need to be a PPA or could it be another structure (e.g.lease, toll)?

A. For a bidder to fall under this category they must have an existing power purchase agreement with PacifiCorp. The existing agreement can be any type of power purchase, exchange or sales agreement as long as the restructuring of the agreement provides an incremental resource to PacifiCorp.(May 24, 2007)

Q37. The RFP states that "if option x) or y) is not available, the Credit Rating will be determined by PacifiCorp Credit through an internal process review utilizing a proprietary credit scoring model developed in conjunction with a third-party. All Bidders will receive a Credit Rating which will determine the maximum value of any credit assurances to be posted." Can you tell us when we will receive that Credit Rating based on the financial information we provided in our RFQ submittal?

A37. A Credit Rating will be determined as necessary and once all of the outstanding questions regarding the RFQ have been satisfactorily answered by the bidder. (May 24, 2007)

A39 . The percentage of capital cost entered in field ID 1112 will be used to determine the amount of capital that is eligible for 84 month tax amortization. The 84 month tax amortization treatment will only be applied to bids that are primarily coal-fired.

Q41. If a bidder recently received an upgrade to its credit rating that will impact the level of security required, how should that information be submitted? Is a letter sufficient with the applicable notices from the credit agencies or should the bidder submit revised RFQ?

A41. For any change in the credit quality of the bidder, the bidder should submit all supporting information to the Independent Evaluator at the bidder's earliest convenience.

Q44. Please confirm that the bid date has been extended to June 29, 2007 as described in the letter from Jeff Larsen to the PSC dated May 21, 2007 and posted on the RFP website.