EVALUATION OF PORTFOLIO FIT. PG&E’s current approach to evaluate portfolio fit within its renewable power solicitations has specific advantages: • The numerical score is based on quantitative calculations or on technology-specific attributes, and is fairly objective in its development. • The scoring for time of delivery is closely related to how well the generation profile of the project matches PG&E’s contractually designed super-peak periods vs. night periods, which in turn are intended to reflect the match with PG&E’s portfolio needs. • The range of score from zero to 100 enables a reviewer to discern differences between offers more easily than the range of zero to 5 used in the 2008 solicitation. There are a few drawbacks to this approach: • The methodology does not discern between how a contract might fit with PG&E’s portfolio needs today (when the utility has little or no need for new baseload power) vs. needs a decade from now, when load growth and the retirement of older facilities might engender a stronger need for baseload power. Similarly, the methodology does not distinguish a short-term from a long-term contract, though the latter might provide a better fit in the future given possible future portfolio needs. • The methodology doesn’t explicitly address the cost of remarketing power during off-peak periods, though it clearly recognizes the worse fit of resources that generate more in the early hours of the morning and more in winter rather than in summer. • It may be difficult to accommodate the portfolio fit of certain technologies, such as solar thermal facilities with storage, in the framework being used. It is not clear whether such a facility that has a limited ability to schedule generation past the peak hours of insolation and a limited ability to respond to dispatch orders fits well into the existing scoring system for portfolio fit. • In the greater scheme of things, the portfolio fit criterion does not appear to have as much impact as others such as market valuation, project viability, and RPS goals. To Xxxxxx’x knowledge there has not yet been a situation where a renewable PPA’s superior portfolio fit score has enabled it to be shortlisted despite inferior value or viability; nor has there been a situation where an inferior portfolio fit score has led a PPA to be rejected.
EVALUATION OF PORTFOLIO FIT. The approach PG&E employed in the 2011 RPS RFO to score Offers on portfolio fit differed from that used in prior years. The current approach has specific advantages: • The numerical score is based on quantitative calculations or on technology-specific attributes, and is objective in its development with little discretion or judgment involved in applying scoring guidelines. • The scoring for time of delivery is closely related to how PG&E currently perceives its greatest needs for new RPS procurement, an important consideration for compliance strategy. There are a few drawbacks to this approach: • The current scoring approach is somewhat black and white; it tends to provide either a high score or a low score with few steps in between. • In the greater scheme of things, the portfolio fit criterion does not appear to have as much impact as others such as market valuation, project viability, and RPS goals. To Xxxxxx’x awareness there has not yet been a situation where a renewable Xxxxx’s superior portfolio fit score has enabled it to be shortlisted by PG&E despite inferior value or viability; nor has there been a situation where an inferior portfolio fit score has led an Offer to be rejected from a short list. PG&E’s revised portfolio fit criterion for the 2011 RPS solicitation is consistent with the utility’s current understanding of its generation need for each compliance period under SBX
