PORTFOLIO FIT. Xxxxxx questions the relevance of PG&E’s methodology for scoring proposals for Portfolio Fit. The CPUC has very clearly enunciated that IOUs should use a methodology that leads to selection of least-cost, best-fit resources. However, Xxxxxx notes that the degree to which a proposed new resource fits well or badly into PG&E’s existing and planned portfolio of supply resources is largely captured already in the valuation methodology. For example, the increased value of power delivered in super-peak hours and peak seasons vs. the decreased value of power delivered in night hours and off-peak seasons is captured by the valuation algorithm. The methodology to value RA benefits also captures the unique contribution of generators in peak hours when resources are most needed to meet reliability needs. PG&E’s valuation methodology is designed to capture value of the flexibility of dispatchable resources over as-available resources. So to a large extent the valuation methodology has been constructed to reflect in dollar terms the value of both the firmness and time-of-delivery characteristics of Offers. Also, the existing and prior methodologies for evaluating Portfolio Fit in PG&E’s RPS RFOs do not directly address the question of when baseload resources will be needed for the portfolio or when peaking resources will be needed. (Note that the bilaterally negotiated resources are not scored with the same methodology as proposals in the RPS solicitation). Therefore Xxxxxx surmises that most of the relevant features of fit with PG&E’s portfolio needs are already captured by PG&E’s valuation methodology, and scoring separately for Portfolio Fit is largely redundant. SCE appears to have captured its Fit evaluation within its valuation model and apparently doesn’t employ a separate score for Fit. It is hard to imagine a renewable resource whose Portfolio Fit characteristics are so superior that a reasonable person would select it for the short list despite deficiencies in value or viability, or a resource so inferior in Portfolio Fit (say, a non-dispatchable generator that produces power only between 1 a.m. and 4 a.m. in the springtime) that it would be rejected from the short list despite superior value and viability. Xxxxxx is not aware of any short list selections or rejections by PG&E that have been motivated primarily by a Portfolio Fit score. So Xxxxxx suggests the possibility that Portfolio Fit scoring be dropped in PG&E’s future solicitations unless such a specia...
PORTFOLIO FIT. Xxxxxx questions the relevance of PG&E’s methodology for scoring proposals for Portfolio Fit. The CPUC has very clearly enunciated that IOUs should use a methodology that leads to selection of least-cost, best-fit resources. However, Xxxxxx notes that the degree to which a proposed new resource fits well or badly into PG&E’s existing and planned portfolio of supply resources is largely captured already in the valuation methodology. For example, the increased value of power delivered in super-peak hours and peak seasons vs. the decreased value of power delivered in night hours and off-peak seasons is captured by the valuation algorithm. The methodology to value RA benefits also captures the unique contribution of generators in peak hours when resources are most needed to meet reliability needs. PG&E’s valuation methodology is designed to capture value of the flexibility of dispatchable resources over as-available 18 At least one Participant noticed this feature of the scoring guidelines and asserted that its prior experience installing customer premises equipment beyond the meter constitutes wholesale generation experience.
PORTFOLIO FIT. Xxxxxx ranks the CMS2 contract’s fit with PG&E’s supply portfolio needs as moderate. The generation profile provided by Sempra Generation for the facility correlates well on a time-of-day basis with PG&E’s portfolio needs in several months but not others, and correlates moderately well on a seasonal basis with the utility’s needs. As a solar photovoltaic resource, the facility should have modest day-ahead predictability of output. PROJECT VIABILITY In Arroyo’s opinion, the project viability of the CMS2 facility is high. The project has made considerable progress towards obtaining a CAISO interconnection agreement, and Sempra Generation now has good experience developing, designing, constructing, and bringing into operation utility-scale solar photovoltaic facilities in the desert Southwest. The project is quite well advanced in securing required permits. There are remaining issues regarding how and when the project will achieve full deliverability of energy to PG&E customers. Xxxxxx independently scored the CMS2 facility using the both the 2009 and 2011 versions of Energy Division’s Project Viability Calculator, and observed that the scores rank high compared to competing alternatives. RPS GOALS Delivery of power under the CMS2 PPA would advance PG&E towards its RPS goals for renewable energy delivery in the 2011-2013 compliance period and later periods. The contract would not advance the state towards the goal stated in Executive Order S-06-06 of providing at least 20% of the state’s renewable power needs from biomass-based generation.
PORTFOLIO FIT. Portfolio fit is how well an offer matches PG&E’s portfolio needs. Because Ausra’s solar thermal technology will produce power that is largely coincidental with PG&E’s peak demand, and will have a high degree of predictability for an “as- available” technology, this offer is a reasonable match to PG&E’s portfolio needs.
PORTFOLIO FIT. The portfolio fit measure differentiates Offers by the firmness of their energy delivery and by their energy delivery patterns. A higher portfolio fit measure is assigned to the energy that PG&E is sure to receive and fits the needs of the existing portfolio. It is extremely important that PG&E be able to count on energy when planned as part of managing its long term portfolio. The Portfolio Fit metric is an integer value between 0 and 100, inclusive. It is obtained by averaging, with equal weighting, the two scores obtained from (1) the delivery firmness, and (2) the time of delivery. The average value is rounded to the closest integer (a half- integer value is rounded up). The scores will be accompanied by an explanation of the rationale behind the scoring.
PORTFOLIO FIT. For the 2011 renewable solicitation, PG&E employed a quantitative scoring system to assess the portfolio fit of a contract into its overall set of energy resources and obligations. The team calculated one score for the firmness of delivery of the offered resource and another score for the time of delivery of the resource (relative to PG&E’s portfolio needs). The overall score for portfolio fit is the numerical average of the two. This detailed methodology is not typically employed by PG&E for evaluating bilateral contracts.
PORTFOLIO FIT. Xxxxxx ranks the HLP contract amendment’s fit with PG&E’s supply portfolio needs as moderate. The existing facility generally operates as a baseload generator. While PG&E does not have an immediate need for more baseload generation, removing the project’s 7 While the amendments modify existing QF contracts for power delivery from eligible renewable resources and are not strictly RPS agreements, Xxxxxx regards the 2011 RPS IE template as the most applicable approach to discussing the amendments’ merits, rather than a non-RPS template. production from the portfolio might create or accelerate such a need at some point in time. Similarly, if HLP should curtail or cease production in the absence of temporary price relief, this might create or accelerate a need for PG&E to procure more RPS-eligible power in the first or second RPS compliance periods.
PORTFOLIO FIT. Portfolio fit considers how well an offer’s features match PG&E’s portfolio needs. PG&E evaluated the offer’s consistency with portfolio fit as described in the 2011 RPS Plan and Protocol and filed its initial 2011 RPS Shortlist Report on November 11, 2012. In a subsequent supplemental filing dated February 8, 2012 in Advice Letter 3938-E-A,9, PG&E submitted an updated Shortlist Report that includes a new approach to calculate a portfolio- adjusted value (“PAV”). The PAV intends to more accurately reflect the value of renewable resources to PG&E customers. Specifically, the PAV methodology starts with net market value results, which reflect the value of a transaction relative to market forward curves, as an initial quantitative valuation. Additional quantitative adjustments are then made for aspects of market valuation, transmission adder, and portfolio fit described herein and for other factors that impact the value of a transaction with respect to PG&E’s portfolio. Using PG&E’s PAV methodology for the 2011 RPS Solicitation, the offer compared favorably to the other 2011 RPS shortlisted offers. Additional information about the PAV methodology is provided in Confidential Appendix A and Advice Letter 3938-E-A. Using its PAV methodology, the Projects compared favorably to the other 2011 RPS shortlisted offers.
PORTFOLIO FIT. PG&E’s approved 2012 RPS procurement plan expressed an expectation that it would have procured sufficient RPS-eligible energy to meet its RPS compliance needs through the third compliance period of 2017-2020. As an existing contract within PG&E’s supply portfolio, the CalRENEW-1 PPA is already counted within the baseline assumption that PG&E uses when projecting when its RPS compliance position will be long or short. The amended contract is expected to continue to contribute towards RPS compliance through its delivery term including years when the compliance position is expected to be short or long. On that basis Xxxxxx believes that its fit with PG&E’s portfolio is moderate; its production is expected to contribute to the estimated net long position through 2020 and will help reduce the estimated net short position in later years. PROJECT VIABILITY As an existing generation facility that has operated reliably with production levels above its annual contract quantity, Xxxxxx assesses the project viability of the CalRENEW-1 facility as ranking quite high.
PORTFOLIO FIT. Xxxxxx ranks the SGS-1 contract’s fit with PG&E’s supply portfolio needs as moderate. The generation profile provided by Sempra Generation for the facility correlates well on a time-of-day basis with PG&E’s portfolio needs, but correlates poorly on a seasonal basis with the utility’s needs (for example, the highest months of projected output are April and May, when PG&E’s hydroelectric resources tend to have strong production). As a solar photovoltaic resource, the facility should have modest day-ahead predictability of output, and the PPA does not provide PG&E with real-time dispatch control. PROJECT VIABILITY In Xxxxxx’x opinion, the project viability of the Mesquite Solar wind facility is moderate to high. The project has obtained an interconnection agreement into the Salt River Project’s grid and necessary permits from Maricopa County and the Arizona Corporation Commission, and Sempra Generation now has good experience developing, designing, and constructing utility-scale solar photovoltaic facilities in the desert Southwest. There are remaining issues regarding institutional arrangements for how the project’s output could be imported to the California ISO balancing authority area and whether network upgrades may be required to achieve full deliverability of energy to PG&E customers. Xxxxxx independently scored the Mesquite Solar facility using the Energy Division’s final Project Viability Calculator, and observed that the score ranked as moderate to high compared to competing alternatives. RPS GOALS Delivery of power under the SGS-1 PPA would advance PG&E towards its long-term RPS goals for renewable energy delivery in 2020. Xxxxxx believes it is quite likely that the contract will contribute to PG&E’s short-term RPS goals under flexible compliance rules. The contract would not advance the state towards the goal stated in Executive Order S-06- 06 of providing at least 20% of the state’s renewable power needs from biomass-based generation.
