PRINCIPLES USED TO DETERMINE FAIRNESS OF PROCESS. The Energy Division has provided a set of principles proposed to guide IEs in determining whether an IOU’s evaluation and selection process was fair: • Were all bids treated the same regardless of the identity of the bidder? • Were bidder questions answered fairly and consistently and the answers made available to all bidders? • Did the utility ask for “clarifications” that provided one bidder an advantage over others? • Was the economic evaluation of the bids fair and consistent? • Was there a reasonable justification for any fixed parameters that were a part of the IOU’s LCBF methodology (e.g., RMR values; debt equivalence parameters)? • What qualitative and quantitative factors were used to evaluate bids? Some other considerations appear relevant to reviewing PG&E’s methodology. The application of subjective judgment in bringing multiple non-valuation criteria to bear on decision-making, rather than a mathematical, objective means of doing so, implies an opportunity to test the fairness of the administration of the process using additional principles: • Were the decisions to reject higher-valued contracts from the short list because of low scores in criteria other than valuation or PG&E’s preferences applied consistently across all contracts? • Were the decisions to accept lower-valued contracts into the short list based on superior scores in criteria other than valuation, despite lower values of those specific contracts, applied consistently across all contracts? • Were the judgments used to create the short list based on stated evaluation criteria or preferences that were publicly made available to potential counterparties prior to proposal submittal through the Solicitation Protocol?
PRINCIPLES USED TO DETERMINE FAIRNESS OF PROCESS. In evaluating PG&E’s performance in implementing its competitive bidding process, Merrimack Energy has applied a number of principles and factors, which incorporate those suggested by the Commission’s Energy Division as well as additional principles that Merrimack Energy has used in its oversight of other competitive bidding processes. These include: • Were bidder questions answered fairly and consistently and the answers made available to all? • Did the bid evaluation team maintain consistent scoring and evaluation among and across projects, including different types of projects? • Were the requirements listed in the Solicitation Protocol applied in the same manner to all proposals? • Was there evidence of any undue bias regarding the evaluation and selection of different type of technologies, project structures, bid sizes, or contract terms that cannot be reasonably explained? • Were the bids given equal credibility in the economic evaluation? • Did PG&E ask for “clarifications” that provided the bidder an advantage over others? • Did all bidders have access to the same information? • Were all cost factors (e.g. imputed debt, transmission costs) treated in an equitable and consistent manner? • Did PG&E consistently apply the requirements, procedures and criteria of the evaluation process as identified in the RFP documents to different bids and types of projects? • Was the evaluation and selection process based on complete information about each proposal and a thorough investigation by PG&E’s project team?
