Common use of PRINCIPLES FOR EVALUATING THE METHODOLOGY Clause in Contracts

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided a set of principles for evaluating the process used by IOUs for evaluating contracts in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: • The IOU bid evaluation should be based only on information submitted in bid proposal documents. • There should be no consideration of any information that might indicate whether the bidder is an affiliate. • Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. • The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. • The LCBF methodology should evaluate bids in a technology-neutral manner. • The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contracts. Unlike some utilities, PG&E does not rely on weighted-average calculations of scores for various evaluation criteria to arrive at a total aggregate score. Instead, the team ranks contracts by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: • The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts should be clear to counterparties. • The logic of using non-valuation criteria or preferences to reject high-value contracts and select low-value contracts should be applied consistently and without bias. • The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided a set of principles for evaluating the process used by IOUs for evaluating contracts in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: • The IOU bid evaluation should be based only on information submitted in bid proposal documents. • There should be no consideration of any information that might indicate whether the bidder is an affiliate. • Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. • The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. • The LCBF methodology should evaluate bids in a technology-neutral manner. • The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contracts. Unlike some utilities, PG&E does not rely on weighted-average calculations of scores for various evaluation criteria to arrive at a total aggregate score. Instead, the team ranks contracts by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 ”7 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: • The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts should be clear to counterparties. • The logic of using non-valuation criteria or preferences to reject high-value contracts and select low-value contracts should be applied consistently and without bias. • The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided a set of principles for evaluating the process used by IOUs for evaluating contracts in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: • The IOU bid evaluation should be based only on information submitted in bid proposal documents. • There should be no consideration of any information that might indicate whether the bidder is an affiliate. • Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. • The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. • The LCBF methodology should evaluate bids in a technology-neutral manner. • The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contracts. Unlike some utilities, PG&E does not 5 This approach is a modified version of the methodology applied to Offers received in PG&E’s competitive RPS solicitations; the modification is described below, under “Transmission Cost Adders” rely on weighted-average calculations of scores for various evaluation criteria to arrive at a total aggregate score. Instead, the team ranks contracts by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: • The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts should be clear to counterparties. • The logic of using non-valuation criteria or preferences to reject high-value contracts and select low-value contracts should be applied consistently and without bias. • The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided suggested a set of principles for evaluating the process used by IOUs for evaluating contracts in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: • The IOU bid evaluation should be based only on information submitted in bid proposal documents. • There should be no consideration of any information that might indicate whether the bidder is an affiliate. • Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. • The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. • The LCBF methodology should evaluate bids in a technology-neutral manner. • The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contracts. Unlike some utilities, PG&E does not rely on weighted-average calculations of scores for various evaluation criteria to arrive at a total aggregate score. Instead, the team ranks contracts by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 ”4 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: • The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts should be clear to counterparties. • The logic of using non-valuation criteria or preferences to reject high-value contracts and select low-value contracts should be applied consistently and without bias. • The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided a set of principles for evaluating the process used by IOUs for evaluating contracts selecting Offers in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: • The IOU bid evaluation should be based only on information submitted in bid proposal documents. • There should be no consideration of any information that might indicate whether the bidder is an affiliate. • Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. • The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. • The LCBF methodology should evaluate bids in a technology-neutral manner. • The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contractsduring the 2009 RPS RFO. Unlike some utilities, PG&E does not rely on weighted-weighted- average calculations of scores for various evaluation criteria to arrive at a total aggregate score. Instead, the team ranks contracts Offers by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 ”7 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: • The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts selecting Offers should be clear to counterpartiesParticipants. • The logic of using non-valuation criteria or preferences to reject high-value contracts Offers and select low-value contracts Offers should be applied consistently and without bias. • The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided suggested a set of principles for evaluating the process used by IOUs for evaluating contracts selecting Offers in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles These include: • The IOU bid evaluation should be based only on information submitted in bid proposal documents. • There should be no consideration of any information that might indicate whether the bidder is an affiliate. • Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. • The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. • The LCBF methodology should evaluate bids in a technology-neutral manner. • The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the PG&E’s specific situation PG&E finds itself in when evaluating renewable power contractssituation. Unlike some utilities, PG&E does not rely on weighted-average calculations of scores for various evaluation criteria to arrive at a total aggregate score. Instead, the team ranks contracts Offers by net market value using its methodologyvalue, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 ”5 The application of judgment in bringing the non-valuation criteria to bear on 5Pacific Gas and Electric Company, “Renewables Portfolio Standard, 2011 Solicitation Protocol, May 11, 2011 (Updated June 7, 2011)”, page 40. decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: • The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts selecting Offers should be clear transparent to counterpartiesParticipants. • The logic of using how non-valuation criteria or preferences are used to reject highhigher-value contracts Offers and select lowlower-value contracts Offers should be applied consistently and without bias. • The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided suggested a set of principles for evaluating the process used by IOUs for evaluating contracts in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: •  The IOU bid evaluation should be based only on information submitted in bid proposal documents. •  There should be no consideration of any information that might indicate whether the bidder is an affiliate. •  Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. •  The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. •  The LCBF methodology should evaluate bids in a technology-neutral manner. •  The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contracts. Unlike some utilities, PG&E does not rely on weighted-average calculations of scores for various evaluation criteria to arrive at a 4 This approach is a modified version of the methodology applied to Offers received in PG&E’s competitive RPS solicitations; the modification is described below, under “Transmission Cost Adders” total aggregate score. Instead, the team ranks contracts by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 ”5 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: •  The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts should be clear to counterparties. •  The logic of using non-valuation criteria or preferences to reject high-value contracts and select low-value contracts should be applied consistently and without bias. •  The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided suggested a set of principles for evaluating the process used by IOUs for evaluating contracts in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: •  The IOU bid evaluation should be based only on information submitted in bid proposal documents. •  There should be no consideration of any information that might indicate whether the bidder is an affiliate. •  Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. •  The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. •  The LCBF methodology should evaluate bids in a technology-neutral manner. •  The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contracts. Unlike some utilities, PG&E does not rely on weighted-average calculations of scores for various evaluation criteria to arrive at a total aggregate score. Instead, the team ranks contracts by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 ”4 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: •  The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts should be clear to counterparties. •  The logic of using non-valuation criteria or preferences to reject high-value contracts and select low-value contracts should be applied consistently and without bias. •  The valuation methodology should be reasonably consistent with industry practices.

PRINCIPLES FOR EVALUATING THE METHODOLOGY. The Energy Division of the CPUC has usefully provided suggested a set of principles for evaluating the process used by IOUs for evaluating contracts in competitive renewable solicitations, within the template intended for use by IEs in reporting. The principles include: • The IOU bid evaluation should be based only on information submitted in bid proposal documents. • There should be no consideration of any information that might indicate whether the bidder is an affiliate. • Procurement targets and objectives were clearly defined in the IOU’s solicitation materials. • The IOU’s methodology should identify quantitative and qualitative criteria and describe how they will be used to rank bids. These criteria should be applied consistently to all bids. • The LCBF methodology should evaluate bids in a technology-neutral manner. • The LCBF methodology should allow for consistent evaluation and comparison of bids of different sizes, in-service dates, and contract length. Some additional considerations appear relevant to the specific situation PG&E finds itself in when evaluating renewable power contracts. Unlike some utilities, PG&E does not rely on weighted-average calculations of scores for various evaluation criteria to arrive at a 4 This approach is a modified version of the methodology applied to Offers received in PG&E’s competitive RPS solicitations; the modification is described below, under “Transmission Cost Adders” total aggregate score. Instead, the team ranks contracts by net market value using its methodology, after which, “[u]sing the information and scores in each of the other evaluation criteria, PG&E will decide which Offers to include and which ones not to include on the Shortlist.”6 ”5 The application of judgment in bringing the non-valuation criteria to bear on decision-making, rather than a mechanical, quantitative means of doing so, implies an opportunity to test the fairness and consistency of the method using additional principles: • The methodology should identify how non-valuation measures will be considered; non-valuation criteria used in evaluating contracts should be clear to counterparties. • The logic of using non-valuation criteria or preferences to reject high-value contracts and select low-value contracts should be applied consistently and without bias. • The valuation methodology should be reasonably consistent with industry practices.