Common use of CONSIDERATIONS OF SUPPLIER CONCENTRATION Clause in Contracts

CONSIDERATIONS OF SUPPLIER CONCENTRATION. In this year’s solicitation, PG&E stated in its protocol that aversion of excess supplier concentration would be an evaluation criterion. The team reviewed developers who proposed multiple Offers that met the valuation and viability screens, and assigned MW limits to how many of those Offers to short-list based on how many contracts the utility already had executed with the counterparty. In assigning those limits the team used its judgment, taking into account factors such as 20 California Public Utilities Commission, Decision 00-00-000, “Opinion Adopting Criteria for the Selection [of] Least-Cost and Best-Fit Renewable Resources”, July 8, 2004, Findings of Fact #28 and 29 • The number of megawatts of executed contracts for projects not yet operational vs. the number of megawatts for contracted projects that have achieved commercial operation (the former being considered a greater source of risk), • The view of transactors about the likelihood that mutually acceptable contractual terms could be negotiated with the counterparty, vs. the risk of failure to achieve executed contracts through negotiation, and • Guidance from PG&E’s PRG.

CONSIDERATIONS OF SUPPLIER CONCENTRATION. In this year’s solicitation, PG&E stated in its protocol that aversion of excess supplier concentration would be an evaluation criterion. The team reviewed developers who proposed multiple Offers that met the valuation and viability screens, and assigned MW limits to how many of those Offers to short-list based on how many contracts the utility already had executed with the counterparty. In assigning those limits the team used its judgment, taking into account factors such as 20 21 California Public Utilities Commission, Decision 00-00-000, “Opinion Adopting Criteria for the Selection [of] Least-Cost and Best-Fit Renewable Resources”, July 8, 2004, Findings of Fact #28 and 29 • The number of megawatts of executed contracts for projects not yet operational vs. the number of megawatts for contracted projects that have achieved commercial operation (the former being considered a greater source of risk), • The view of transactors about the likelihood that mutually acceptable contractual terms could be negotiated with the counterparty, vs. the risk of failure to achieve executed contracts through negotiation, and • Guidance from PG&E’s PRG.