2014 Combined Heat and Power Request for Offers Participant Instructions
2014 Combined Heat and Power Request for Offers Participant Instructions Version 1.0 Posted November 13, 2014 2014 Combined Heat and Power Request for Offers i TABLE OF CONTENTS TABLE OF CONTENTS .............................................................................................................II ARTICLE ONE. 1.01 1.02 1.03 1.04 GENERAL INFORMATION................................................................1 Introduction. ..................................................................................................................1 Purpose of these RFO Instructions. ...............................................................................1 RFO Schedule................................................................................................................1 Document Conflicts.......................................................................................................2 ARTICLE TWO. TERMS AND CONDITIONS OF THE AGREEMENTS; ELIGIBILITY REQUIREMENTS......................................................................4 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 Eligibility Requirements................................................................................................4 Term Length and Term Start Date.................................................................................4 Submission of Offers. ....................................................................................................5 Certain Terms and Conditions.......................................................................................5 CHP PPA: Modification and Negotiation. ....................................................................6 Dispatchable Documents. ..............................................................................................6 Credit and Collateral Requirements. .............................................................................8 Location of the Generating Facility...............................................................................8 Greenhouse Gas (“GHG”) Compliance Costs...............................................................8 CHP Facilities with Existing Power Purchase Agreement Requiring Early Termination. ..................................................................................................................9 ARTICLE THREE. 3.01 3.02 3.03 3.04 3.05 Complete Offer Submittal Package. ............................................................................10 Offer e-Binder..............................................................................................................11 Offer e-Binder File Updates. ...................................................................................1413 Adobe Acrobat (*.pdf) Files........................................................................................14 Final Binding Offers....................................................................................................14 ARTICLE FOUR. 4.01 4.02 4.03 EVALUATION OF OFFERS..............................................................16 Overview. ....................................................................................................................16 Quantitative Assessment. ............................................................................................16 Qualitative Assessment. ..............................................................................................18 ARTICLE FIVE. 5.01 5.02 5.03 5.04 OFFER SUBMITTAL PROCESS ......................................................10 ELECTRIC INTERCONNECTION. .................................................19 Interconnection Disclaimer. ........................................................................................19 Interconnection Requirements for Offer(s). ................................................................19 Interconnection Procedure...........................................................................................20 References. ..................................................................................................................21 ARTICLE SIX. REGULATORY APPROVAL. ...........................................................23 2014 Combined Heat and Power Request for Offers ii 6.01 6.02 CPUC and FERC Approvals. ......................................................................................23 Emissions Performance Standard Approvals. .............................................................23 ARTICLE SEVEN. 7.01 7.02 7.03 7.04 Treatment of Confidential Information. ......................................................................24 Permitted Disclosures. .................................................................................................24 Certain Defined Terms. ...............................................................................................25 Miscellaneous. .............................................................................................................26 ARTICLE EIGHT. 8.01 8.02 8.03 8.04 8.05 WAIVERS AND RESERVATION OF RIGHTS..............................28 SCE’s Rights. ..............................................................................................................28 Release of SCE for any Delays. ..................................................................................28 Waived Claims. ...........................................................................................................29 Offeror’s Representations, Warranties and Covenants................................................30 Good Faith Dealings....................................................................................................32 ARTICLE NINE. 9.01 9.02 9.03 CONFIDENTIALITY. .........................................................................24 INDEPENDENT EVALUATOR; COMMUNICATIONS. ..............33 Independent Evaluator.................................................................................................33 Communications..........................................................................................................33 Questions. ....................................................................................................................33 2014 Combined Heat and Power Request for Offers iii LIST OF ATTACHMENTS A. Non-Binding Notice of Intent to Offer B. Offer Template C-1. Pro Forma Agreement for CHP Facilities Request for Offer Program C-2. Pro Forma Agreement for CHP Facilities Request for Offer Program (SCE Specific) D-1. EEI Master Power Purchase and Sale Agreement Cover Sheet D-2. EEI Paragraph 10 to the Collateral Annex D-3. Unit Contingent (UC) Tolling Confirmation D-4. RA Confirmation Each of Attachment A through D-4 is available at: www.SCE.com/CHPRFO. 2014 Combined Heat and Power Request for Offers iv ARTICLE ONE. 1.01 GENERAL INFORMATION. Introduction. In accordance with the Qualifying Facility and Combined Heat and Power (“CHP”) Program Settlement Agreement and related documents (including the CHP Program Settlement Agreement Term Sheet, or “Term Sheet”) approved by the California Public Utilities Commission (“CPUC”) on December 16, 2010 in Decision (“D.”) 10-12-035 (collectively, the “Settlement Agreement”), Southern California Edison Company (“SCE”) is issuing its 2014 CHP Request for Offers (“RFO”) to solicit offers (“Offers”) from owners and operators of CHP Facilities and Utility Prescheduled Facilities (as defined in the Settlement Agreement) (“Offerors”). Contracts awarded through this RFO will be used to meet SCE’s megawatt (“MW”) and Greenhouse Gas (“GHG”) Emissions Reduction Targets as established in the Settlement Agreement. Except as provided herein, capitalized terms used in these RFO Participant Instructions (“RFO Instructions”), but not otherwise defined herein, have the meanings set forth in the Pro Forma Agreement for CHP Facilities Request for Offer Program, which is Attachment C-1 (“CHP PPA”). 1.02 Purpose of these RFO Instructions. These RFO Instructions provide an overview of the processes that SCE will use to implement this RFO, and set forth SCE’s and each Offeror’s rights and obligations with respect to this RFO. These RFO Instructions also describe the procedures that each Offeror must adhere to and the requirements that each Offeror must satisfy with respect to its Offer(s) in order to be eligible to participate in this RFO. Furthermore, while these RFO Instructions outline certain terms and conditions of the power purchase and sale agreements and other agreements (“PPAs”) applicable to this RFO, this outline is only provided for reference purposes and is not intended to be exhaustive or comprehensive. Offerors must review the applicable PPAs in conjunction with these RFO Instructions as part of their participation in this RFO. Terms and conditions for purchases are set forth in the applicable PPAs attached to these RFO Instructions. 1.03 RFO Schedule. The table below sets forth the schedule for this RFO. In order to remain eligible to participate in the RFO, an Offeror must submit, and SCE must receive, all documents related to an Offer in accordance with the timeframes and descriptions set forth in the table below. Any Offeror that does not satisfy the requirements with respect to its Offer may be disqualified from this RFO with respect to such Offer. Please review this table carefully to ensure that all documents are submitted in a timely manner. Milestone Date & Time Description Launch Nov 13, 2014 Documents for this RFO posted on www.SCE.com/CHPRFO. 2014 Combined Heat and Power Facilities Request for Offers Page 1 Milestone Date & Time Description Offeror Conference Dec 4, 2014 9:00 AM PPT Information on how to participate in the Offeror conference will be made available on the website (www.sce.com/CHPRFO) by Dec 2, 2014. Submission of Non-Binding Notice of Intent Dec 11, 2014 Offerors may submit to SCE, in electronic format, the completed form of the 5:00 PM PPT Non-Binding Notice of Intent to Offer (Attachment A). Jan 8, 2015 Submission of 5:00 PM PPT Complete Offer (the “Offer Submittal Package Due Date”) Notice of Short Listing Finalize Enabling Agreement Finalize Offer Template Finalize All Agreements Feb 19, 2015 5:00 PM PPT Offerors must submit to SCE, in electronic format, the Complete Offer Submittal Package (Section 3.01). Offerors who fail to submit these materials by the stated time may be disqualified by SCE in its sole discretion from further participation in this RFO. SCE notifies each Offeror by email whether its Offers have been shortlisted. Only short-listed Offers will be qualified for further consideration in this RFO. Offerors that have submitted Offers pursuant to the Dispatchable Documents must complete negotiations and have mutually agreed upon final forms of Mar 26, 2015 agreement in place for each of the following Dispatchable Documents: 5:00 PM PPT (i) EEI Master Power Purchase and Sale Agreement Cover Sheet (Attachment D-1); and (ii) EEI Paragraph 10 to the Collateral Annex (Attachment D-2). Apr 9, 2015 5:00 PM PPT Apr 23, 2015 5:00 PM PPT Deadline for Offerors to submit any changes to commercial terms in the Offer Template (Attachment B) (does not include pricing terms). Offerors must complete negotiations with SCE and have mutually agreed upon final forms of agreement in place for the all applicable PPAs and associated documents. Offerors who fail to meet this negotiation deadline may be disqualified by SCE in its sole discretion from further participation in this RFO. Offerors must submit to SCE, in electronic format, Final Binding Offers. Submission of Final Binding Offers Apr 30, 2015 5:00 PM PPT Notification of Selected Offers May 21, 2015 5:00 PM PPT Execution of Final Jun 1, 2015 5:00 PM PPT Agreements 1.04 Offerors who fail to submit Final Binding Offers by the stated time may be disqualified by SCE in its sole discretion from further participation in this RFO. SCE will only consider Final Binding Offers from Offerors who have satisfied all the requirements set forth in these RFO Instructions. SCE notifies each Offeror by email whether its Final Binding Offer(s) and Final Agreement(s) are accepted for execution by SCE. SCE and selected Offerors execute the applicable Final Agreements(s). Document Conflicts. If there is a conflict or inconsistency between the terms and conditions contained in these RFO Instructions and the terms and conditions contained in the PPAs attached to these RFO Instructions, the terms and conditions contained in the PPAs applicable to the Offer(s) will prevail. Notwithstanding the foregoing, the terms and conditions of any agreement executed by SCE and Offeror as part of this RFO (“Final Agreement”) will prevail over these RFO Instructions and each of its Attachments referenced herein. 2014 Combined Heat and Power Facilities Request for Offers Page 2 1.05 SCE preferences. SCE has two procurement targets established within the Settlement Agreement. The first target is a MW target that is to be achieved by the end of the Initial Program Period, November 23, 2015. The second target is a GHG reduction target that is to be achieved by the end of the Second Program Period, December 31, 2020. SCE is seeking those resources that can contribute toward both of these targets. New resources that can reduce GHG emissions relative to the Double Benchmark (pursuant to Section 7.3.1.1 of the Settlement Agreement) and other CHP resources that can reduce GHG emissions through methods identified in Section 7 of the Term Sheet (such as a physical change, fuel change, change in operations, or conversion to a Utility Prescheduled Facility) can help in meeting the GHG target. Please contact SCE for questions related to these targets and if your CHP resource can potentially qualify to meet these targets. *** End of ARTICLE ONE *** 2014 Combined Heat and Power Facilities Request for Offers Page 3 ARTICLE TWO. 2.01 TERMS AND CONDITIONS OF THE AGREEMENTS; ELIGIBILITY REQUIREMENTS Eligibility Requirements. SCE will consider all Offers from any New CHP Facility, Existing CHP Facility, Expanded CHP Facility, Repowered CHP Facility, or Utility Prescheduled Facility (“UPF”) (in each case as defined in the Settlement Agreement), with a nameplate that is larger than 5 MW that are timely submitted in accordance with the terms of these RFO Instructions. Per the Settlement Agreement, a CHP Facility must meet the federal definition of a qualifying cogeneration facility under 18 CFR §292.205 implementing PURPA. CHP Facilities must also meet the definition of cogeneration under California Public Utilities Code §216.6 and the Emissions Performance Standard established by Public Utilities Code §8341. In addition, a Utility Prescheduled Facility must have been a CHP Facility that has met the PURPA efficiency requirements as of September 20, 2007. SCE will only consider Offers that meet the eligibility requirements of the Settlement Agreement so that SCE may count the projects towards satisfying its MW and GHG Emissions Reduction Targets under the Settlement Agreement. Eligibility requirements will be calculated from the data submitted by the Offeror in the Offer Template. This data should match the data submitted to the regulatory agencies and be reflective of the generating data for the entire plant. Offeror is required to submit a copy of such regulatory filings as part of its Complete Offer Submittal Package (see section 3.02). 2.02 Term Length and Term Start Date. SCE encourages Offerors to propose terms of varying lengths up to the applicable maximum term length described below. In addition to the limitations on the start date outlined below and any terms and conditions of the applicable PPA, the start date will also be dependent on receiving the necessary approvals of the CPUC and FERC, if applicable. The following table outlines SCE's estimates of the earliest Term Start Date for purposes of submission and evaluation of Offers and the Term Start Date based on Section 4.12 of the CHP Program Settlement Agreement Term Sheet.1 1 Time needed for Offeror to comply with its obligations under any PPA and for FERC approval, if required, has not been included in these estimates. SCE makes no representations with respect to how much time will actually be required to comply with all necessary conditions for the start of any Term, including the receipt of any regulatory approvals. 2014 Combined Heat and Power Facilities Request for Offers Page 4 Facility Type Existing Earliest Term Start Date Term Length Expanded (w/o collateral) (w/ collateral) No more than 7 years Tier 2 Advice Letter2 Repower No more than 12 years (expected approximately 8 months after Effective Date), N/A 1-Feb-16 Ninety (90) days after CPUC approval Tier 3 Advice Letter3 (expected approximately 14 months after Effective Date), 1-Nov-16 No later than 2 years No later than 3 years No later than 5 years after the Effective Date after CPUC Approval after CPUC Approval Submission of Offers. Offers submitted by an Offeror that is the owner and/or operator of a baseload CHP Facility should be made pursuant to and should include the CHP PPA, and Offers submitted from an Offeror that is the owner and/or operator of a dispatchable CHP Facility or a UPF should be made pursuant to and should include the Dispatchable Documents. Offers submitted with respect to a generating facility that provides both a dispatchable product and a baseload product should be made pursuant to and should include the Dispatchable Documents, with provisions added to include the baseload portion. Any Offeror desiring to use another document for dispatch should contact SCE as soon as possible in order to provide information regarding its Offer(s) and to obtain SCE’s consent to utilize such document. 2.04 Certain Terms and Conditions. The table below provides a summary of, or reference to, some of the material terms of each applicable PPA. For additional information regarding these terms, as well as other terms and conditions applicable to Offers, Offerors should carefully review the applicable PPA. 2 3 New Ninety (90) days after CPUC approval Latest Term Start Date 2.03 Expanded Tier 2 Advice Letter will be submitted for Existing CHP Facilities that execute the CHP PPA without material modification. Tier 3 Advice Letter will be submitted for all other PPAs that have a Term greater than or equal to five years (see Section 6.01 of these RFO Instructions for more details). 2014 Combined Heat and Power Facilities Request for Offers Page 5 Generating Facility Baseload CHP Facility PPA Type CHP PPA (Attachments C-1 or C-2) Product Power Product and Related Products Delivery Point Scheduling Coordinator (“SC”)/ Fuel Manager Pricing Economic Curtailment 2.05 UPF/ Dispatchable CHP Facility EEI Master Power Purchase and Sale Agreement Cover Sheet (Attachment D-1); EEI Paragraph 10 to the Collateral Annex (Attachment D-2); Unit Contingent (“UC”) Tolling Confirmation (Attachment D-3); RA Confirmation (Attachment D-4) (collectively, “Dispatchable Documents”) Capacity, Energy, Ancillary Services, (each as defined in the UC Tolling Confirmation) and Capacity Attributes (as defined in the RA Confirmation), and any other product derived from or associated with each generating unit CAISO SCE prefers to be the SC, but Offeror may select another SC. Offeror may bid in an Economic Curtailment Option (see Exhibit U of the CHP PPA) Capacity ($/kW-year) Heat Rate for Energy Pricing (Btu/kWh) plus Variable Charge ($/kWh) As bid SCE is the SC. SCE is not the fuel manager. N/A As bid; shaped, as set forth in §2.06 of these RFO Instructions As bid CHP PPA. An Offeror submitting an Offer with respect to a baseload CHP Facility should submit the CHP PPA (Attachment C-1 or Attachment C-2). Offerors may modify the CHP PPA submitted as part of their Complete Offer Submittal Package (see section 3.01) to the extent such modifications add value to the Offer. The form of the CHP PPA was negotiated and developed by the California investor-owned utilities, many Qualifying Facilities (as defined in the Settlement Agreement), and CHP Facility stakeholders over the course of several years, both before and as part of the settlement negotiations leading to the Settlement Agreement. As such, SCE discourages the modification of the CHP PPA outside of the boundaries set forth in this Section 2.05. Any Offeror who wishes to modify the terms and conditions of the CHP PPA, other than adding its GHG proposal to Exhibit S, utilize the SCE-specific form of CHP PPA (Attachment C-2). 2.06 Dispatchable Documents. (a) Documents and Modification. An Offeror submitting an Offer with respect to a UPF or a dispatchable CHP Facility should submit the following Dispatchable Documents: EEI Master Power Purchase and Sale Agreement Cover Sheet (Attachment D-1), the EEI Paragraph 10 2014 Combined Heat and Power Facilities Request for Offers Page 6 to the Collateral Annex (Attachment D-2), the UC Tolling Confirmation (Attachment D-3), and the RA Confirmation (Attachment D-4). Offerors may modify the applicable Dispatchable Documents submitted as part of their Complete Offer Submittal Packages to the extent such modifications add value to the Offers. For generating facilities located outside of SoCalGas service territory, Offerors should contact SCE for the UC Tolling Confirmation version applicable to the location of the Offeror’s generating facility. (b) SCE Monthly Capacity Payment Price Shapes. With respect to Offers submitted pursuant to the Dispatchable Documents, the table below sets forth the price shapes that SCE will use to shape the flat capacity price of the applicable product in the UC Tolling Confirmation (Attachment D-3) when such products are offered for an entire calendar year. Monthly capacity payments will not be shaped in the RA Confirmation (Attachment D-4). The price shape represents the value of capacity to SCE depending on the heat rate of the project. The price shape will be normalized and allocated across the applicable months for any partial year included in the delivery period. Please contact SCE for normalized price shapes for any partial calendar years in an Offer. Offeror must submit a flat price in dollars per kW-month for each product for the term of the Offer. For full calendar years within the Term (as defined in the Dispatchable Documents), the monthly capacity payments to be paid to Offeror will be equal to the flat capacity price, multiplied by the respective price shape, times the quantity of capacity specified in the UC Tolling Confirmation (Attachment D-3), multiplied by 1,000.4 SCE may require an Offeror to reallocate its total price between the RA Confirmation (Attachment D-4) and the UC Tolling Confirmation (Attachment D3) based on the heat rate and location of the project. SCE Monthly Capacity Payment Price Shape Table for Full Calendar Years 4 For example, for full calendar years, if the project heat rate is between 9 and 11 MMBtu/MWh, for July the Offeror will be paid its flat capacity price times 240%. 2014 Combined Heat and Power Facilities Request for Offers Page 7 Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2.07 6 to 7 95% 65% 60% 60% 80% 105% 155% 160% 135% 90% 75% 120% Heat Rate at PMax (MMBtu/MWh) >7 to 9 >9 to 11 >11 to 14 75% 50% 20% 55% 30% 10% 55% 30% 10% 55% 30% 10% 80% 60% 30% 105% 75% 45% 170% 240% 330% 185% 270% 405% 155% 200% 240% 90% 70% 35% 75% 55% 25% 100% 90% 40% >14 to 18 10% 5% 5% 5% 15% 40% 365% 490% 205% 25% 15% 20% Credit and Collateral Requirements. An Offeror submitting an Offer with respect to a New CHP Facility, an Expanded CHP Facility for a Term that is greater than seven (7) years, or a Repowered CHP Facility, must comply with the credit and collateral requirements set forth in the applicable PPA. An Offeror submitting an Offer with respect to an Existing CHP Facility, or an Expanded CHP Facility for a Term that is less than or equal to seven (7) years, is not required to comply with the credit and collateral provisions of the applicable PPA, but the inclusion of such provisions in an Offer will add value from SCE’s perspective. 2.08 Location of the Generating Facility. All generating facilities must be located in California. Generating facilities must either be interconnected to the CAISO Controlled Grid and certified by the CAISO as a Participating Generator (as defined in the CAISO Tariff), or have firm transmission rights to the Delivery Point within the CAISO’s Balancing Authority Area or to the respective CAISO intertie for the term of the Offer and any Final Agreement. 2.09 Greenhouse Gas (“GHG”) Compliance Costs. (a) CHP PPA. An Offeror submitting an Offer pursuant to the CHP PPA (see §1.06(d) of the CHP PPA) must provide both (i) a firm and/or as-available pricing option whereby Offeror assumes GHG Compliance Costs, and (ii) a firm and/or as-available pricing option whereby Offeror elects to pass-through GHG Compliance Costs to SCE. Offeror may also offer a third hybrid pricing option whereby Offeror and SCE allocate GHG Compliance Costs between them. SCE may select, in its sole discretion, which of these pricing options, if any, SCE chooses as part of this RFO. 2014 Combined Heat and Power Facilities Request for Offers Page 8 (b) Dispatchable Documents. SCE will reimburse an Offeror for GHG costs pursuant to the Dispatchable Documents. Please see Article 19 of the UC Tolling Confirmation (Attachment D-3) for terms and conditions. 2.10 CHP Facilities with Existing Power Purchase Agreement Requiring Early Termination. SCE will consider Offer(s) from an Existing CHP Facility so long as that facility meets all eligibility requirements in these RFO Instructions. If an Offer is based upon the early termination of an existing power purchase agreement, Offeror should explain in the Offer Structure Letter, if possible, the contractual basis for the termination (including, whether Seller has the right to terminate and, if SCE is the counterparty of the existing power purchase agreement, any payment that may be due SCE from such early termination). *** End of ARTICLE TWO *** 2014 Combined Heat and Power Facilities Request for Offers Page 9 ARTICLE THREE. OFFER SUBMITTAL PROCESS 3.01 Complete Offer Submittal Package. By 5:00 PM Pacific Prevailing Time (“PPT”) on the Offer Due Date, Offeror must submit to SCE and the Independent Evaluator (see Section 9.01) a complete non-binding indicative Offer consisting of each of the applicable documents set forth in Section 3.02 and conforming to these RFO Instructions (“Complete Offer Submittal Package”). The Complete Offer Submittal Package must be received as follows: (a) Via Email: (i) The “Offer Structure Letter” describing all submittals, projects and project options (including any mutual exclusivity and/or any other selection limitation and any information described in Section 3.02(a) of these RFO Instructions), the form of which is attached hereto as Exhibit A, must be emailed as an attachment file to SCE and the Independent Evaluator to the email address identified below. Note: This is the only material that is to be emailed. The remaining offer materials (described in Section 3.02) must be saved onto a USB flash drive (“Physical Electronic Media”), and physically mailed to SCE (as set forth in Section 3.01(b)). (ii) Offeror’s email message must be sent to: 1) SCE at CHPRFO@SCE.com, and 2) The Independent Evaluator at: Wayne Oliver Merrimack Energy Waynejoliver@aol.com (iii) The subject line of the email message must be written as follows: “Short Form of Offeror’s Name, 2014 SCE CHP RFO Submission”. (b) Via Physical Mail: (i) For each project, Offeror must physically mail or otherwise deliver to SCE two (2) electronic versions of the Offer (as set forth in Section 3.02 below) (“Offer e-Binder”) by Physical Electronic Media (printed copies are not required). Offeror must affix a label that (1) is securely bound to the Physical Electronic Media, and (2) clearly indicates the project name. Each Offer e-Binder may contain information only with respect to that individual project. If Offeror has multiple projects to propose (e.g., CHP-A Facility located at New Town Site and CHP-B Facility located at Old Town 2014 Combined Heat and Power Facilities Request for Offers Page 10 Site), then Offeror must follow the submittal instructions for each such project (e.g., CHP Facility located at a single Site). (ii) Offer e-Binders must be sent to: Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA 91770 Attention: Benny Wu Contract Origination, GO-1, Quad 1C 626-302-3230 A Complete Offer Submittal Package is an Offer that is submitted in accordance with these RFO Instructions and must include all of the documents in Section 3.02, as applicable to each Offeror. SCE will only consider submissions that constitute a Complete Offer Submittal Package. SCE is not responsible for Offers received after the Offer Due Date due to unsuccessful delivery or otherwise. 3.02 Offer e-Binder. The Offeror e-Binder should contain the following six (6) directories: (a) Offer Structure Letter. Offeror must compose and sign an Offer Structure Letter that: (i) States the Generating Facility Name; (ii) States the address of the Site location; (iii) States all mutual exclusivity or inclusivity with other Offer(s); (iv) If Offer is based upon the early termination of an existing power purchase agreement, explain, if possible, the contractual basis for the termination (including, whether Seller has the right to terminate and, if SCE is the counterparty of the existing power purchase agreement, any payment that may be due SCE from such early termination); and (v) States any special instructions or unique considerations within the Offer that warrants further explanation or clarification. The Offer Structure Letter file name must be in the form “Project Name_Offer Structure Letter.doc (or *.pdf)”. 2014 Combined Heat and Power Facilities Request for Offers Page 11 (b) Offer Template. Two (2) Offer Templates (Attachment B) (“Offer Template”) for each project and for each project configuration pertaining to the same project. Any Offeror submitting an Offer must submit Attachment B (Offer Template). The Offer Template file name must be in the form “Project Name_Offer Template.xls (or *.xlsm)”. (c) Proposed Changes to the Applicable Pro Forma Agreement. See Sections 2.05 and 2.06(a) for guidelines regarding changes to the pro forma agreements. The redlined file name must be in the form “Project Name_(Agreement Type).doc.” Agreement Type is: “CHP”, “Toll”, “RA”, “EEI”, or “Para10”. (d) Generating Facility Description. (i) A written description of the Generating Facility that contains, at a minimum, the following: (A) Major and auxiliary equipment and systems of the Generating Facility, including a heat balance diagram of the Generating Facility; (B) Electric metering for the Generating Facility and all the interconnection utility systems; (C) The thermal host, including: (1) the measurement and use of the Useful Thermal Energy Output; (2) contractual arrangements between the CHP Facility and the thermal host; and (3) any expected changes in the operation or requirements of the thermal host; (D) The nameplate for each generating unit and the total for entire facility; and (E) Control systems and features. (ii) A site plan drawing showing the location of the major Generating Facility equipment, structures, buildings, roadways and features as well as the routes for all interconnecting utility lines. (iii) A one-line diagram. 2014 Combined Heat and Power Facilities Request for Offers Page 12 The generating facility description file name must be in the form “Project Name_Facility Description.doc (or *.pdf)”. (e) Site Description. (i) A legal description of the real property comprising the Site (e.g., township(s), section and range of project or metes and bounds). (ii) A description of Offeror’s legal control of the Site, including any necessary easements and rights-of-way or plan for acquiring control of any portions of the Site, easements and rights-of-way that Offeror does not already control, along with a timeline for completing all associated activities. (iii) A site map. The site description file name must be in the form "Project Name_Site Description.doc (or *.pdf)”. (f) Additional Documentation. (i) If Offer is for a New CHP Facility, Repowered CHP Facility, or Expanded CHP Facility, a copy of the facility’s latest interconnection study. (ii) If Offer uses natural gas as the fuel source, a description of the fuel supply and transportation arrangements/options for the facility including a copy of a recent gas transportation invoice. (iii) Any filings submitted to regulatory agencies for the prior two years (2012 and 2013) substantiating the facility’s (i) Useful Thermal Energy Output, (ii) Fuel Usage, (iii) GHG Production, and (iv) Historical Generation, as set forth in the Offer Template. (iv) A heat balance diagram which matches the input variables of the Offer Template. (v) In accordance with CPUC General Order (GO) 156 SCE is required to report on an annual basis its women, minority and disabled veteran business enterprise (“WMDVBE”) procurement and planning activities. If the Offeror is certified as a WMDVBE as set forth in GO 156, a copy of the certification or, if in the process of certifying, a copy of the application for certification. (vi) Any information or documentation provided to the FERC relating to QF certification in the past 18 months relevant to the facility or proposed facility, including, but not limited to, Form 556. 2014 Combined Heat and Power Facilities Request for Offers Page 13 3.03 Offer e-Binder File Updates. (a) (b) Offeror may need to send one or more updates to any of the above files if, for example: (i) Offeror initially sent information that has since been updated; or (ii) Any agreement, study or analysis prepared by the CAISO or applicable Transmission Provider is received by Offeror after the Offer Due Date. If Offeror should need to send one or more updates to any of the above files: (i) The respective file name(s) for such update(s) must be written to logically communicate to SCE: (A) The version number (e.g., v2) of the update file, and (B) The file being replaced. (c) 3.04 Offeror must email all update files to both: (i) SCE at CHPRFO@sce.com, and (ii) The Independent Evaluator at Waynejoliver@aol.com Adobe Acrobat (*.pdf) Files. If Offeror chooses to send PDF files, they must be searchable files so that SCE can use the Adobe search function to easily locate particular words or phrases within the respective files. Therefore, please do not scan a document with a scanning device to create the PDF. Instead, ensure that you have the professional version of Adobe Acrobat, and then print the file to Adobe by selecting “Adobe PDF” from your printer drop-down menu. A printed-to-Adobe PDF file is searchable. 3.05 Final Binding Offers. By April 23, 2015 at 5:00 PM PPT, Offerors must submit to SCE the mutually agreed upon final forms of CHP PPA, or Dispatchable Documents, as applicable, with final binding Offers, including final pricing terms, for the applicable solicited products (“Final Binding Offers”). A final Offer that is not binding, or that is submitted with any form of agreement other than the mutually agreed upon final form of CHP PPA, or Dispatchable Documents, as applicable, is not a Final Binding Offer and will not be accepted for further consideration in this RFO. Final Binding Offers submitted by Offeror shall be binding and non-revocable by Offeror, and SCE shall be entitled to accept (and Offeror shall be bound to honor) any 2014 Combined Heat and Power Facilities Request for Offers Page 14 such Final Binding Offer; provided however, that Final Binding Offers not accepted by SCE shall no longer be binding and non-revocable upon close of the RFO. Offeror must email the Final Binding Offer to: (a) SCE at CHPRFO@SCE.com, and (b) The Independent Evaluator at Waynejoliver@aol.com. The subject line of the email message must be written as follows: “Short Form of Offeror’s Name, 2014 SCE CHP RFO Final Binding Offer”. *** End of ARTICLE THREE *** 2014 Combined Heat and Power Facilities Request for Offers Page 15 ARTICLE FOUR. EVALUATION OF OFFERS. 4.01 Overview. SCE evaluates and ranks Offers based on least-cost/best-fit (“LCBF”) principles. The LCBF analysis evaluates both quantitative and qualitative aspects of each Offer to estimate its value to SCE’s customers and its relative value in comparison to other Offers. The quantitative valuation of each Offer takes into account cash flow components for both benefits and costs. These components are then netted and discounted to yield a net present value (“NPV”) for each Offer (SCE uses a ten percent (10%) discount rate for all its NPV calculations). The NPV of that Offer is compared to the NPV of other Offers or potential combinations of Offers to find the “Least Cost.” “Best Fit” is achieved by ensuring that selected offers fill or manage a procurement need or risk. Contributions to meeting both the MW targets and GHG reduction goals of the Settlement Agreement as well as the associated net cost of doing so will be important factors in the evaluation of offers. 4.02 Quantitative Assessment. SCE uses market indicators, such as power and gas prices and volatilities, when available, to ensure that valuations are consistent with established markets. However, complete market assessments are not always feasible because of insufficient publication of market indicators. Accordingly, SCE’s valuation processes use derived inputs in NPV calculations when market information is not available. These derived inputs come from pricing models and processes which may be fundamental, statistical, or a combination of both. Pricing models and processes may use proxy markets, historical information, proxy physical characteristics, or other information. SCE also considers market information from third party sources, such as NYMEX, Platt’s and broker quotes. SCE evaluates the quantifiable attributes of each Offer individually and subsequently ranks them based on the Offer’s benefit and cost relationship, specifically the NPV of the project. These individual quantitative components may include, but are not limited to: capacity benefits, energy benefits, credit/collateral benefit, contract payments, debt equivalence, GHG cost, congestion cost or benefit, and transmission cost. Each of these elements for the quantitative analysis is described briefly below. SCE will present the final set of quantifiable attributes in addition to the market forecasts it plans to use for the CHP RFO valuation to its Cost Allocation Mechanism Group prior to receipt of Complete Offer Submittal Packages and Final Binding Offers. (a) Capacity Benefit and Resource Adequacy Benefits. Each Offer is assigned capacity benefits, if applicable, based on SCE’s forecast of net capacity value and a Resource Adequacy Capacity (as defined in the CAISO Tariff) value. Each Offeror’s Resource Adequacy Capacity value will be calculated 2014 Combined Heat and Power Facilities Request for Offers Page 16 in a manner consistent with the CPUC’s and CAISO’s resource adequacy accounting rules. Monthly capacity benefits are based on SCE’s net capacity value forecast (that is, an Offer’s total monthly Resource Adequacy Capacity value). Projects located in SCE’s local region may be given additional value and consideration based on their effectiveness at meeting SCE’s local RA requirements. With respect to Offers under the CHP PPA, SCE will be attributing Resource Adequacy Capacity value to the Firm Contract Capacity offered and no Resource Adequacy Capacity value to the As-Available Contract Capacity offered. With respect to Offers under the Dispatchable Documents, SCE will be attributing Resource Adequacy Capacity value to each of those Offers. (b) Energy Benefit. For Offers with firm or as-available energy, SCE calculates the energy benefits of an Offer based on the estimated market value of energy and the generation delivery profile in the Offer. For Offers with dispatchable capabilities at SCE’s control, SCE calculates the energy benefits based on the estimated market value of energy when the proposed resource is forecasted to dispatch. (c) Credit/Collateral Benefit. Pursuant to the Settlement Agreement and the Dispatchable Documents, Offeror may select various performance assurance options. Each of these options may carry a different level of credit/collateral benefit to SCE. (d) Congestion Benefit or Cost. Localized congestion may cause a change to a particular locational marginal price in the CAISO’s market. (e) Contract Payment Cost. The primary costs associated with each Offer are the payments that SCE makes for the expected Product deliveries under the terms of the potential agreement with SCE. The total payments are determined by adding the energy-related payments and the capacity-related payments. (f) Debt Equivalence Cost. Debt equivalence is used by credit rating agencies to describe the fixed financial obligation resulting from long-term purchased power contracts. (g) GHG Cost. Pursuant to the Settlement Agreement, Offerors will provide offers where they assume GHG Compliance Costs, elect to pass through GHG Compliance Costs to SCE, or elect a hybrid approach for GHG cost recovery. For an Offer passing 2014 Combined Heat and Power Facilities Request for Offers Page 17 through all or some of the GHG Compliance Costs, SCE will assess a GHG cost to the Offer based on SCE’s forecast of GHG prices. (h) Transmission Cost. For projects that do not have an existing interconnection to the electric system or have an existing interconnection but not for a proposed expansion of an existing facility, system transmission upgrade costs are based on the Phase 1 Interconnection Study (as defined in the CAISO Tariff) (or equivalent study), or later study for generator interconnection procedures (GIP) applications. For such projects without these studies but for which the Offer provides SCE with the right to terminate if system transmission upgrade costs exceed a specified amount, SCE will conduct its assessment of system transmission upgrade costs based on the specified amount. 4.03 Qualitative Assessment. In addition to the benefits and costs quantified during the evaluation, SCE assesses nonquantifiable characteristics of each Offer by conducting an analysis of each project’s qualitative attributes. SCE considers qualitative characteristics in determining the short list and final selection, including tie-breakers, if any. These characteristics may include: o Permitting and interconnection - Environmental & permitting status - Electrical interconnection - Fuel interconnection & source - Water interconnection & source o Pre-development milestones - Project financing status - Project development experience - Thermal host - FERC & CA qualifying facility standards - Emissions performance standards o Development milestones - Site control - Large equipment status - Reasonableness of commercial operation date o Transmission area o Modifications to pro forma documents o Fuel supply and transportation arrangements/options o Cost effectiveness of GHG reductions o GHG contributions towards the Settlement Agreement target o Supplier diversity o Congestion, negative price, and curtailment considerations not captured in the quantitative valuation o Portfolio fit of energy, capacity, & term o Offeror concentration o Dispatchability & curtailability o Offer price in excess of public or independent data *** End of ARTICLE FOUR *** 2014 Combined Heat and Power Facilities Request for Offers Page 18 ARTICLE FIVE. 5.01 ELECTRIC INTERCONNECTION. Interconnection Disclaimer. The information in this Article Five is provided for reference purposes only and in no way constitutes an obligation or commitment of SCE with respect to any interconnectionrelated matter. The Power Procurement department of SCE does not handle, and is not responsible for, the interconnection process. Offeror must contact the CAISO or appropriate representatives of the applicable transmission or distribution provider for complete information on the interconnection process, and in order to initiate and complete the interconnection of its generating facility to the electrical grid. Capitalized terms used in this Article Five and not otherwise defined in these RFO Instructions have the meanings set forth in the CAISO Tariff. With respect to this RFO and any Final Agreements, SCE will have no liability to Offeror whatsoever for the time taken by the applicable Transmission Provider to complete interconnection studies or facilities upgrades that are necessary for the Offeror’s Generating Facility to achieve Commercial Operation. With respect to this RFO and any Final Agreements, SCE will not be liable to Offeror for any reduction in Offeror’s payments or reduction in the term of the contract in the event Commercial Operation is delayed or not achieved as a result of any interconnection activity of the applicable Transmission Provider. Any agreements executed between Offeror and the applicable Transmission Provider as part of the interconnection process for purposes of providing interconnection service to the electric system shall not act as any guarantee as to whether a Final Agreement will be reached with SCE. 5.02 Interconnection Requirements for Offer(s). SCE is requesting and considering Offers that have (1) a Phase I Interconnection Study or system impact study (SIS), (2) a Phase II Interconnection Study or Facility Study, or (3) an executed Interconnection Agreement. If an Offeror does not have at least a Phase I Interconnection Study or SIS, SCE will include an interconnection-related termination right in the applicable PPA. Offeror must contact the applicable Transmission Provider or distribution provider if the requested point of interconnection is not to SCE’s system. SCE will consider those Offers interconnecting outside of SCE’s system that have: (1) submitted or will submit a valid interconnection request to the applicable transmission provider, (2) an interconnection study identifying the Network Upgrade cost, or (3) an executed interconnection agreement. SCE will consider those Offers interconnecting at the transmission system level that have: (1) submitted or will submit a valid Interconnection Request to the CAISO or an applicable Transmission Provider, (2) a Phase 1 Interconnection Study or a Phase 2 Interconnection Study, or (3) an executed Interconnection Agreement. SCE will consider 2014 Combined Heat and Power Facilities Request for Offers Page 19 those Offers interconnecting at the distribution system level that have: (1) submitted or will submit a valid Interconnection Request and request for distribution service to SCE, (2) a Phase 1 Interconnection Study or Phase 2 Interconnection Study, or (3) an executed Interconnection Agreement. Offeror’s Interconnection Request shall reflect a request for Full Capacity Deliverability Status. 5.03 Interconnection Procedure. For purposes of the discussion related to interconnection, the term “transmission system” refers to any part of the grid operating at a voltage higher than 66 kV. Conversely, the term “distribution system” refers to 66kV or lower. There are occasional exceptions, depending on the exact location of interconnection. If Offeror is interconnecting to SCE’s system, they can contact InterconnectionQA@sce.com if unsure about whether the point of interconnection is transmission or distribution. Any request for interconnection to the SCE transmission system must be directed to the CAISO in accordance with the CAISO Tariff. SCE’s electric circuits that are greater than 66 kV are generally considered to be part of the transmission system and are under CAISO control. Conversely, applicants seeking interconnection to SCE’s distribution system (generally, those that are 66 kV or less) are required to file an Interconnection Request and a request for distribution service under SCE’s Wholesale Distribution Access Tariff (“WDAT”). All of SCE’s electric circuits that are not under CAISO control are considered to be part of the distribution system. Any application for interconnection to the SCE distribution system must be directed to SCE in accordance with the WDAT. (a) Interconnection to the CAISO Controlled Grid. If the Offeror’s interconnection point is to the CAISO Controlled Grid, the Interconnection Request should be sent directly to the CAISO in accordance with the CAISO Tariff. The CAISO’s interconnection procedures and application form can be found in the CAISO Tariff under Section 25, “Interconnection of Generating Units and Facilities,” which is available at: http://www.caiso.com/pubinfo/tariffs/index.html (b) Interconnection to SCE’s Distribution System. Interconnection to SCE’s distribution system requires two submissions: (i) An Interconnection Request to SCE under the WDAT. SCE’s WDAT is available at: http://www.sce.com/AboutSCE/Regulatory/openaccess/default.htm 2014 Combined Heat and Power Facilities Request for Offers Page 20 Offerors will need to scroll to the section titled “Wholesale Distribution Access Tariff”. A series of links to the various sections of the tariff is accessible. (ii) An Application for Wholesale Distribution. In addition to applying for interconnection service, a project that connects to SCE’s distribution system must also apply to SCE for wholesale distribution service (pursuant to Section 15.2 of the WDAT) in order to transmit the generator output from the point of interconnection on the distribution system to the CAISO Controlled Grid. A separate deposit, in the amount of $2.00 per anticipated average monthly kilowatts of generation or wholesale distribution load (as more particularly described in the WDAT), is required with that application. However, if the generation facility already exists and is interconnected within SCE territory, a deposit will not be required. Questions related to the WDAT application, interconnection procedures or wholesale distribution service can be directed to SCE’s Grid Interconnection and Contract Development Department at InterconnectionQA@sce.com. (Include “2014 CHP RFO” in the subject field.) The WDAT and Distribution Service applications are available at http://www.sce.com/AboutSCE/Regulatory/openaccess/default.htm. Offerors that have already submitted an interconnection application and received feedback from the Transmission Provider, including, but not limited to, draft study reports, and study reports, must provide such information prepared by the Transmission Provider to SCE no later than three (3) business days after the delivery of such study or analysis to the applicant. (c) Interconnection to Other Systems. If the interconnection point is outside of the CAISO Controlled Grid or SCE’s distribution system, the interconnection request is typically submitted to the applicable interconnecting utility or Balancing Authority Area operator. The application process and forms are provided by the interconnecting utility or Balancing Authority Area operator. In order to import electric energy into the CAISO’s Balancing Authority Area, Offeror must contact the CAISO so that necessary assessments of the CAISOcontrolled facilities can be performed for Offeror’s Generating Facility. 5.04 References. CAISO New Generator Interconnection http://www.caiso.com/docs/2002/06/11/2002061110300427214.html 2014 Combined Heat and Power Facilities Request for Offers Page 21 CAISO Generation Requirements http://www.caiso.com/thegrid/generation/index.html *** End of ARTICLE FIVE *** 2014 Combined Heat and Power Facilities Request for Offers Page 22 ARTICLE SIX. 6.01 REGULATORY APPROVAL. CPUC and FERC Approvals. SCE’s obligations to purchase any product under a Final Agreement will only become effective upon CPUC Approval. SCE will submit a Tier 2 Advice Letter (as defined in the Settlement Agreement) for Existing CHP Facilities that execute the CHP PPA without material modification. SCE will submit a Tier 3 Advice Letter (as defined in the Settlement Agreement) for all other executed PPAs with Terms greater than or equal to five years. In the event that a transaction occurs between SCE and an Offeror resulting in a Final Agreement that requires approval by the FERC (e.g., a transaction between SCE and any of its affiliates), SCE’s obligations to purchase any product under such Final Agreement will only become effective upon receipt of both CPUC Approval and approval by FERC. 6.02 Emissions Performance Standard Approvals. For those PPAs equal to or greater than five (5) years in length, the CPUC must make a specific finding that the PPA with the Generating Facility is in compliance with the Emissions Performance Standard (as defined in the Settlement Agreement) (“EPS”). The Offeror must provide, on the Offer Template or upon request by SCE, information to SCE, on a confidential basis as necessary, to allow SCE to make a sufficient showing of compliance with the EPS for all PPAs with terms five (5) years or greater. *** End of ARTICLE SIX *** 2014 Combined Heat and Power Facilities Request for Offers Page 23 ARTICLE SEVEN. 7.01 CONFIDENTIALITY. Treatment of Confidential Information. Each of SCE and Offeror (individually, a “Party”, and collectively, the “Parties”) agrees, as of the date of Offeror’s submission of the Complete Offer Submittal Package, to treat Confidential Information (as defined in Section 7.03) as confidential with respect to third parties, and not to disclose Confidential Information except as specifically authorized in this Article Seven or as specifically agreed to by each Party in writing. Accordingly, each Party must take all necessary precautions and implement all requisite procedures and practices to protect Confidential Information provided by the other Party. 7.02 Permitted Disclosures. (a) Neither Party may disclose any Confidential Information to a third party, other than to the following persons (collectively, and together with the Independent Evaluator, “Permitted Disclosees”): (i) To such Party’s or its upstream parent’s (which, in the case of SCE, is Edison International) employees, Lenders, investors, attorneys, accountants or advisors who have a need to know such information and have agreed to keep such terms confidential; (ii) To potential Lenders with the consent of SCE, which consent will not be unreasonably withheld; provided, however, that disclosure (1) of cash flow and other financial projections to any potential Lender or investor in connection with a potential loan or tax equity investment; or (2) to potential Lenders or investors with whom Offeror has negotiated (but not necessarily executed) a term sheet or other similar written mutual understanding, will not require such consent of SCE; provided further, that in each case such potential Lender or investor has a need to know such information and has agreed to keep such terms confidential; (iii) To SCE’s Procurement Review Group, as defined in D.02-08-071, and SCE’s Cost Allocation Mechanism Group, pursuant to the Settlement Agreement and related CPUC decisions, subject to a protective order applicable to SCE’s Procurement Review Group or Cost Allocation Mechanism Group; (iv) To the CPUC, the CEC or the FERC, under seal (where applicable) for any regulatory purpose, including policymaking, but only provided that, where applicable, the confidentiality protections from the CPUC under Section 583 of the California Public Utilities Code or other statute, order or rule offering comparable confidentiality protection are in place before the communication of such Confidential Information; (v) In order to comply with any Applicable Laws or any exchange, Control Area or CAISO rule, or order issued by a court or entity with competent jurisdiction 2014 Combined Heat and Power Facilities Request for Offers Page 24 over the disclosing party, other than to those entities set forth in Section 7.02(a)(vi); (vi) In order to comply with any Applicable Laws, including applicable regulation, rule, subpoena, or order of the CPUC, CEC, FERC, any court, administrative agency, legislative body or other tribunal, or any discovery or data request of the CPUC or FERC; (vii) To representatives of a Party’s credit ratings agencies who have a need to review all or some of the Confidential Information for the purpose of assisting the Party in evaluating an Offer for this RFO for credit rating purposes or with respect to the potential impact of a Final Agreement, if any, on the Party’s financial reporting obligations, in each case subject to confidentiality restrictions no less stringent than as set forth in these RFO Instructions; (viii) As may reasonably be required to participate in the WREGIS or other process recognized under Applicable Laws for the registration, transfer or ownership of Green Attributes associated with the Related Products; and (ix) To SCE’s (and Edison International’s) lenders and potential lenders. (b) (c) The Independent Evaluator for this RFO may also disclose Confidential Information to the persons described in Sections 7.02(a)(iii), 7.02(a)(iv), and 7.02(a)(vi) in furtherance of this RFO. In connection with requirements, requests or orders to produce documents or information in the circumstances provided in Sections 7.02(a)(v) and 7.02(a)(vi) (“Disclosure Order”) each Party shall, to the extent practicable, use reasonable efforts to (i) notify the other Party before disclosing the confidential information, and (ii) prevent or limit such disclosure. After using such reasonable efforts, the disclosing party may not be (x) prohibited from complying with a Disclosure Order, or (y) liable to the other Party for monetary or other damages incurred in connection with the disclosure of any Confidential Information from this RFO that is the subject of such Disclosure Order; provided however, a Party shall remain subject to, and liable for non-disclosure under, the confidentiality provisions of any Final Agreement. Except as provided in clause (y) of Section 7.02(c), the Parties are entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, the confidentiality obligations set forth in this Article Seven. 7.03 Certain Defined Terms. For purposes of these RFO Instructions, “Confidential Information” means all oral or written (including electronic) communications exchanged between the Parties related to an Offer, including, without limitation, the fact that an Offeror has submitted an Offer, and, if applicable, the facts (1) that SCE has short-listed the Offer, and (2) the Parties are negotiating the Offer. 2014 Combined Heat and Power Facilities Request for Offers Page 25 Notwithstanding anything to the contrary set forth herein, the obligations set forth in this Article Seven do not apply to, and the term “Confidential Information” does not include: 7.04 (a) Information that is in the public domain as of the date that Offeror submitted its Complete Offer Submittal Package or that later comes into the public domain from a source other than from the Party obligated to treat the Confidential Information as confidential, as well as such Party’s Permitted Disclosees or representatives of such Party’s rating agencies; (b) Information that SCE or Offeror can demonstrate in writing was already known to SCE or Offeror, as applicable, before the date that Offeror submitted its Complete Offer Submittal Package; (c) Information which comes to SCE or Offeror from a bona fide third party not under an obligation of confidentiality; or (d) Information which is independently developed by SCE or Offeror without use of or reference to Confidential Information or information containing Confidential Information. Miscellaneous. (a) The Parties agree that irreparable damage would occur if the terms and conditions set forth in this Article Seven were not performed in accordance with their terms or were otherwise breached. Accordingly, a Party may be entitled to seek an injunction or injunctions to prevent breach of the terms and conditions set forth in this Article Seven and to enforce specifically its provisions in any court of competent jurisdiction, in addition to any other remedy to which such Party may be entitled by law or equity, subject to clause (y) of Section 7.02(c). (b) The Parties agree not to introduce into evidence or otherwise voluntarily disclose in any administrative or judicial proceeding, any Confidential Information, except as permitted in Section 7.02(a) above, or as required by Applicable Laws or with the written consent of the Party providing the Confidential Information or as SCE or Offeror may be required to disclose to duly authorized governmental or regulatory agencies, including the CPUC or any division thereof, in order to demonstrate the reasonableness of its actions. (c) All written Confidential Information supplied by a Party, and all copies or translations thereof made by the Party or Permitted Disclosee who received the Confidential Information, shall, upon written request of the Party who initially provided the Confidential Information, be returned to that Party, destroyed, or held and maintained subject to the terms of this Article Seven, provided that a Party or Permitted Disclosee is not obligated to return or destroy any Confidential Information contained in its archive computer back-up system and, provided further, that a Party may retain copies of Confidential Information to the extent that retention is required by Applicable Laws. 2014 Combined Heat and Power Facilities Request for Offers Page 26 (d) Nothing in this Article Seven is intended to waive any attorney-client, work-product or other privilege applicable to any statement, document, communication, or other material of any Party. (e) The terms of this Article Seven shall be effective as of the date that Offeror submitted its Complete Offer Submittal Package and shall terminate five (5) calendar years thereafter, or earlier upon the mutual written consent of the Parties or as required by Applicable Laws. (f) This Article Seven shall be interpreted, governed and construed under the laws of the State of California (without giving effect to its conflict of laws provisions that could apply to the law of another jurisdiction) as if executed in and to be wholly performed within the State of California. (g) If any provision of this Article Seven is unenforceable or invalid, it shall be given effect to the extent it may be enforceable or valid, and such enforceability or invalidity will not affect the enforceability or invalidity of any other provisions of this Article Seven. *** End of ARTICLE SEVEN *** 2014 Combined Heat and Power Facilities Request for Offers Page 27 ARTICLE EIGHT. WAIVERS AND RESERVATION OF RIGHTS. 8.01 SCE’s Rights. Subject to any restrictions set forth in the Settlement Agreement, SCE reserves the right at any time, in its sole discretion, to modify any dates and/or terms specified in these RFO Instructions (including its Attachments) and/or to abandon or suspend this RFO without notice, without assigning any reasons to any Offeror, and without liability of Edison International, SCE or any of their subsidiaries, affiliates or representatives. SCE reserves, in its sole discretion, the right to reject any Offer at any time on the grounds that it does not conform to the terms and conditions of these RFO Instructions and/or the applicable PPAs, or contains terms that are not acceptable to SCE. This RFO and these RFO Instructions do not separately or together constitute an offer to buy any product from any party or an obligation to enter into any transaction or execute any Final Agreement with any party. SCE will not be deemed to have accepted any Offer or Final Binding Offer and will not be bound by any term thereof, unless and until authorized representatives of SCE and Offeror execute a Final Agreement and, if appropriate, related collateral and other required agreements. Each participant will be solely responsible for expenses it incurs as a result of its participation in the RFO, including without limitation in the event that this RFO is terminated by SCE prior to the acceptance of any Offers. 8.02 Release of SCE for any Delays. Offeror acknowledges that except for SCE’s obligation to submit a fully executed Final Agreement to the CPUC for approval (as applicable) or to submit a PPA with an affiliate to the FERC for approval (as applicable), Offeror bears sole responsibility for submitting all applications and obtaining all permits, leases or mortgages, and interconnection, financing and other agreements necessary for Offeror to perform under a Final Agreement. Offeror further acknowledges and agrees that, with respect to this RFO and any Final Agreement, SCE shall have no liability for the: (a) Time required to complete any studies, obtain any required permits for generating facility operation, or enter into any agreements discussed or contemplated under this RFO (including, without limitation, interconnection studies, leases, mortgages, financing or permits); (b) Time required to perform construction for network upgrades necessary to meet the commencement of the term of an agreement; (c) Time to construct the generating facility; or 2014 Combined Heat and Power Facilities Request for Offers Page 28 (d) 8.03 Time required to acquire any environmental permits to construct or operate the generating facility, including acquisition of any emission credits required by law or regulation. Waived Claims. By submitting an Offer, Offeror knowingly, voluntarily, and completely waives any rights under statute, regulation, state or federal constitution or common law to assert any claim, complaint or other challenge in any regulatory, judicial or other forum, including without limitation, the CPUC (except as expressly provided below), the FERC, the Superior Court of the State of California (“State Court”) or any United States District Court (“Federal Court”) concerning or related in any way to the conduct or results of the RFO or these RFO Instructions, including all exhibits, attachments, and appendices thereto (“Waived Claims”). Offeror further expressly acknowledges and consents that if it asserts any Waived Claim at the CPUC, FERC, State Court or Federal Court, or otherwise in any forum, to the extent that Offeror’s Offer or Offers have not already been disqualified, SCE is entitled to automatically disqualify all of Offeror’s Offers from further consideration in this RFO or otherwise, and further, SCE may elect to terminate this RFO. By submitting an Offer, Offeror further agrees that the sole forum in which Offeror may assert any challenge with respect to the conduct or results of this RFO is at the CPUC. Offeror further agrees that: (1) the sole means of challenging the conduct or results of this RFO is a complaint filed under Division 2, Chapter 2, Article 4, Complaints and Investigations, of Title 20, Public Utilities and Energy, of the California Code of Regulations; (2) the sole basis for any such protest shall be that SCE allegedly failed in a material respect to conduct the solicitation in accordance with this RFO; and (3) the exclusive remedy available to Offeror in the case of such a protest shall be an order of the CPUC that SCE again conduct any portion of the solicitation that the CPUC determines was not previously conducted in accordance with this RFO or these RFO Instructions (including its Attachments). Offeror expressly waives, with respect to SCE, any and all other remedies, including, without limitation, compensatory and/or exemplary damages, restitution, injunctive relief, interest, costs and/or attorneys’ fees. Unless SCE elects to do otherwise in its sole discretion, during the pendency of such a protest, this RFO and any related regulatory proceedings related to this RFO will continue as if the protest had not been filed, unless the CPUC issues an order suspending this RFO or SCE has elected to terminate this RFO. Offeror further acknowledges and agrees that if Offeror asserts any Waived Claim, SCE shall be entitled to seek immediate dismissal of Offeror’s claim, complaint or other challenge, with prejudice, by filing a motion to dismiss (or similar procedural device) supported by the language in this Article Eight and that Offeror will not challenge or oppose such a request for dismissal. Offeror further acknowledges and agrees that if it asserts any Waived Claim, and if SCE successfully has that claim dismissed or transferred to the CPUC, Offeror shall pay SCE’s full costs and expenses incurred in seeking such dismissal or transfer, including, without limitation, reasonable attorneys’ fees. 2014 Combined Heat and Power Facilities Request for Offers Page 29 Offeror agrees to indemnify and hold SCE harmless from any and all claims by any other Offeror asserted in response to the assertion of any Waived Claim by Offeror or as a result of an Offeror’s protest to a filing at the CPUC resulting from this RFO. Except as expressly provided in these RFO Instructions, nothing in these RFO Instructions, including Offeror’s waiver of any Waived Claims as set forth above, shall in any way limit or otherwise affect the rights and remedies of SCE. 8.04 Offeror’s Representations, Warranties and Covenants. (a) By submitting an Offer (including a Final Binding Offer), Offeror agrees to be bound by the conditions of this RFO and these RFO Instructions, and makes the following representations, warranties, and covenants to SCE, which representations, warranties, and covenants shall be deemed to be incorporated in their entireties into each of Offeror’s Offers, any refreshed or updated Offer Template and any Final Binding Offers: (i) Offeror has read, understands and agrees to be bound by all terms, conditions and other provisions of these RFO Instructions; (ii) Offeror has had the opportunity to seek independent legal and financial advice of its own choosing with respect to this RFO and these RFO Instructions, including the Attachments hereto; (iii) Offeror has obtained all necessary authorizations, approvals and waivers, if any, required by Offeror to: (A) Submit its Complete Offer Submittal Package; (B) Submit any additional information or refreshed or final Offer Templates; (C) Submit its Final Binding Offer(s), if Offeror submits a Final Binding Offer; and (D) Enter into and execute a Final Agreement with SCE, if Offeror submits a Final Binding Offer; (iv) Offeror’s Offer complies with all Applicable Laws; (v) Offeror has not engaged, and covenants that it will not engage, in any communications with any other actual or potential Offeror in this RFO concerning Competitively-sensitive aspects of an Offer for submission on its own behalf, on behalf of its affiliates or on behalf of any other actual or potential Offeror (“Prohibited Communications”); (A) For the purpose of this Paragraph (v): 2014 Combined Heat and Power Facilities Request for Offers Page 30 (1) “Offeror” means an entity making a good faith effort to prepare an actual or potential Offer for this RFO. Such entity may be an individual owner, corporation, partnership, joint venture or other alliance among such entities formed for the purpose of submitting an offer in this RFO; and (2) “Competitively-sensitive aspects of an Offer” means terms and conditions including, but not limited to, pricing, output, capacity levels, delivery and performance obligations, credit and collateral provisions, economic curtailment, dispatchability, termination provisions, proposed contract revisions or any other element of an Offer that could reasonably be expected to affect the value of the Offer to SCE or to provide an Offeror with an advantage over actual or potential competing Offerors. (B) So long as it complies with Paragraph (v)(C) below, any Offeror may, on its own or in collaboration with other actual or potential Offerors, retain, rely upon and share information with independent advisors, counsel, experts or employees that have agreed to keep such information confidential (collectively, “Advisors”) of its choosing, and such Advisors may provide support for multiple actual or potential Offerors. (C) Offerors shall not allow Advisors representing multiple actual or potential Offerors to share Competitively-sensitive aspects of an Offer with any other Offeror. In addition, an Offeror shall only share information relating to an actual or potential Offer, including Competitively-sensitive aspects of an Offer, with Advisors to the extent such Advisors need to know such information in connection with the preparation of such Offeror’s actual or potential Offer(s) and have agreed to keep such information confidential (including, without limitation, by not sharing Competitively-sensitive aspects of an Offer with other Offerors). For the avoidance of doubt, in no event shall the owner or parent of multiple Offerors be deemed to be an Offeror, or to have violated these RFO Instructions, merely by being the owner or parent of multiple Offerors; provided, however, that in no event shall such parent or owner share information related to the actual or potential Offer of one Offeror, including Competitively-sensitive aspects of an Offer, with another Offeror. Notwithstanding the foregoing, the term “another Offeror” for the purposes of this subsection (C) shall not include any Offeror that directly or indirectly, through one or more intermediaries, is under common control with the Offeror for all purposes relevant to development and submission of an Offer in this RFO and that does not possess independent authority to submit an Offer without the consent and approval of the common controlling entity. (vi) If Offeror is deemed eligible by SCE to submit a Final Binding Offer, any Final Binding Offer submitted by Offeror is subject only to SCE’s acceptance, 2014 Combined Heat and Power Facilities Request for Offers Page 31 in SCE’s sole discretion, and if so accepted, Offeror will enter into the applicable Final Agreement with SCE; (vii) The information submitted by Offeror to SCE in connection with this RFO and all information submitted as part of any Offer (including any additional information, or refreshed or updated Offer Templates or Final Binding Offer) is true and accurate as of the date of Offeror’s submission of such information. Offeror also covenants that it will promptly update such information upon any material change thereto; and (viii) The person submitting any information to SCE with respect to this RFO, including any Offer, Offer Template and Final Binding Offer, is a duly authorized representative of Offeror. (b) By submitting an Offer, Offeror acknowledges and agrees that: (i) SCE may rely on any or all of Offeror’s representations, warranties, and covenants in the RFO (including any Offer submitted by Offeror); (ii) SCE may disclose information as set forth in Article Seven of these RFO Instructions; and (iii) In SCE’s evaluation of Offers pursuant to this RFO, SCE has the right to disqualify an Offeror that is unwilling or unable to meet any requirement of this RFO, as determined by SCE in its sole discretion. (c) 8.05 BY SUBMITTING AN OFFER, OFFEROR HEREBY ACKNOWLEDGES AND AGREES THAT ANY BREACH BY OFFEROR OF ANY OF THE REPRESENTATIONS, WARRANTIES AND COVENANTS IN THESE RFO INSTRUCTIONS SHALL CONSTITUTE GROUNDS FOR IMMEDIATE DISQUALIFICATION OF SUCH OFFEROR, IN ADDITION TO ANY OTHER REMEDIES THAT MAY BE AVAILABLE TO SCE UNDER APPLICABLE LAW, AND DEPENDING ON THE NATURE OF THE BREACH, MAY ALSO BE GROUNDS FOR TERMINATING THE RFO IN ITS ENTIRETY. Good Faith Dealings. It is expected that the Parties will act in good faith in their dealings with each other with respect to this RFO. *** End of ARTICLE EIGHT *** 2014 Combined Heat and Power Facilities Request for Offers Page 32 ARTICLE NINE. 9.01 INDEPENDENT EVALUATOR; COMMUNICATIONS. Independent Evaluator. SCE has engaged an independent evaluator (“Independent Evaluator”) to evaluate and report on this RFO, including the evaluation, selection, and negotiation process for this RFO. The Independent Evaluator will review all Offers and will have the opportunity to be present at meetings and conference calls between SCE and Offerors. In accordance with Section 9.02, Offeror must include the Independent Evaluator in all email communications with SCE related to the RFO. Questions regarding the integrity of the evaluation process or the role of the Independent Evaluator may be referred to the Independent Evaluator at Waynejoliver@aol.com. 9.02 Communications. Any exchange of material information concerning this RFO, including, without limitation, the submission of a Complete Offer Submittal Package as well as any exchange concerning the preparation or submission of Offers or other submissions to SCE related to this RFO, must be submitted to both SCE and the Independent Evaluator for the RFO in the form of an email at the following email addresses: (a) SCE: CHPRFO@sce.com; and (b) The Independent Evaluator at Waynejoliver@aol.com Note: The maximum size of any email submitted to SCE is limited to 8 MB. The website address for the RFO is www.sce.com/CHPRFO. SCE may, in its sole discretion, decline to respond to any email or other inquiry without liability or responsibility. 9.03 Questions. Questions relating to this RFO should be addressed to SCE by email at CHPRFO@sce.com (with copies to the Independent Evaluator) or by telephone to Benny Wu at (626) 302-3230 or Gene Lee at (626) 302-3081. *** End of ARTICLE NINE *** 2014 Combined Heat and Power Facilities Request for Offers Page 33 ARTICLE TEN. COMMITMENT TO DIVERSITY AND SAFETY. 10.01 Commitment to Diversity. SCE is committed to meeting the requirements of GO 156. SCE is also committed to encouraging a diverse supplier base. SCE provides access and opportunity for all potential counterparties to participate in our solicitation and procurement process. 10.02 Commitment to Safety. SCE is committed to safety and the safe development, if applicable, and operation of project. Prior to the start of construction Seller must provide to SCE a report from an independent engineer that Seller has a written safety plan for the safe construction and operation of the Generating Facility. *** End of ARTICLE TEN *** 2014 Combined Heat and Power Facilities Request for Offers Page 34 EXHIBIT A Form of Offer Structure Letter [Insert Offeror’s Letterhead] _______________, 2014 Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA 91770 Attention: Benny Wu Contract Origination, GO1, Quad 1C Subject: SCE’s 2014 CHP Request for Offers Regarding: [Short Form of Offeror’s Name] Offer Dear Benny, [Please refer to Section 3.02 (a) for applicable content.] Very truly yours, ______________________________________ [A person with authority to legally bind Offeror] Name Title 2014 Combined Heat and Power Facilities Request for Offers Page 35
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