EVALUATION OF BIDS WITH VARYING SIZES, IN-SERVICE DATES, AND CONTRACT LENGTH Sample Clauses

EVALUATION OF BIDS WITH VARYING SIZES, IN-SERVICE DATES, AND CONTRACT LENGTH. PG&E’s valuation methodology is essentially blind to project size; it does not consider the extrinsic variables of MW capacity or GWh volume as positive or negative factors but rather reduces the value of the contract to a normalized $/MWh metric. To the extent project size has an impact, it reveals itself in the proposed contract price if the technology is one that provides economies of scale and enables developers to propose lower prices for larger projects. This might be the case where fixed costs for elements such as switchyards, towers, steam turbines etc. can be spread over more MW capacity. The viability scoring system, however, is not neutral to project size. It is evident that projects within California that can use the CAISO’s Small Generator Interconnection Procedures (SGIP) will score higher for the Interconnection Progress criterion than any larger project that uses the Large Generator Interconnection Procedures (LGIP), except for those that have already progressed to the LGIP Phase II study or have obtained an interconnection agreement.13 This tends to favor projects with capacity of 20 MW or less. Similarly, the larger the project, the less likely it is that the developer has succeeded in the past in developing similar or larger sized projects, owned and operated similar or larger sized projects, or financed similar or larger sized projects. So the proposal is likelier to score lower on Project Development Experience, Ownership/O&M Experience, and Project Financing Status if the project is larger. Also, in the case of newer technologies where there is limited manufacturing capacity worldwide for key components, a larger capacity project may score worse on Manufacturing Supply Chain than a smaller one, all else being equal. Xxxxxx agrees that a developer who has never previously built, financed, or owned and operated a generation facility of the same or larger MW capacity as the current proposal may 13 On average, developers seem to prefer to have an executed PPA already in hand before paying the cost of a Phase II study, so it’s less likely that Offers to an RFO that use LGIP are in Phase II already have poorer prospects for success in completing a facility on schedule than one who has two or more larger projects in her resume. This feature of the Project Viability Calculator, however, has the effect of “letting the rich get richer” by favoring proposals from developers who have successful track records and disfavoring those who lack large g...