Florida Power & Light Company s Firm Gas Transportation Request for Proposals Pre-Proposal Workshop. January 16, 2013

Transcription

1 Florida Power & Light Company s Firm Gas Transportation Request for Proposals Pre-Proposal Workshop January 16, 2013

2 Important Dates Request for Proposals Q & A Agenda 2

3 FPL has established the following schedule to complete the RFP process RFP Schedule Activity Date RFP Release December 19, 2012 Pre-Proposal Workshop January 16, 2013 Proposals Due April 3, 2013 Target Date for Execution of Definitive Agreement July 15,

4 The objective of the RFP is to solicit proposals that can meet FPL s future gas requirements while also increasing the reliability and diversity of Florida s natural gas infrastructure RFP Overview Additional natural gas capacity is needed to support additional system demand expected in the near future FPL has a strong preference for new, independently routed pipeline infrastructure, which will: Increase the flexibility and reliability of Florida s gas transportation infrastructure by including multiple interconnections with existing pipelines Provide more competition to serve Florida s future gas transportation needs FPL is seeking to enhance the diversification of Florida s natural gas supply by providing direct access to expanded supply alternatives Access to onshore shale gas supplies which are less subject to tropical weather disruptions Access to new gas suppliers will allow FPL and other Florida customers to diversify existing natural gas supply and credit portfolios 4

5 Initial requirements are 400,000 MMBtu per day, increasing to 600,000 MMBtu per day in 2020, with future options Project Specifications Maximum Daily Quantity (MDQ) beginning May 1, 2017: 400,000 MMBtu/day MDQ beginning May 1, 2020: 600,000 MMBtu/day FPL will retain the right (but not the obligation) to: Request an additional quantity of up to 200,000 MMBtu/day on or before January 1, 2020 (Initial Optional Quantity) Request an additional quantity of up to 200,000 MMBtu/day on or before January 1, 2024 (Second Optional Quantity) Requested in-service date for each optional quantity must be at least 48 months but no later than 60 months after the date FPL exercises the option Minimum term of 25 years FPL has requested the right to unilaterally extend the contract for up to three five-year terms at the Negotiated Rate 5

6 The RFP divides the pipeline into two distinct segments to encourage participation and provide bidders more flexibility Bidders may elect to bid on: Upstream Pipeline Project Downstream Pipeline Project Both projects Project Segments 6

7 The Upstream Pipeline Project will originate near Transco Station 85 and terminate at the Downstream Pipeline Project Upstream Pipeline Project Transco Station 85 to Downstream Pipeline Project in Central Florida Primary Receipt Points: Must include interconnections with Transco (mainline), Gulf South, and Midcontinent Express each sized at the certificated capacity of the Upstream Pipeline Project Primary rights for the full MDQ at all three points Primary Delivery Point: Downstream Pipeline Project Delivery Pressure: 1400 psig Hourly Delivery Rights: 5% of MDQ per hour Required to interconnect with FGT and Gulfstream in Central Florida and provide a wheeling service at this hub at a minimal variable cost Bidders are encouraged to include additional interconnections 7

8 The Downstream Pipeline Project will originate at the Upstream Pipeline Project in Central Florida and terminate at FPL s Martin Plant Upstream Pipeline Project in Central Florida to FPL s Martin Plant Primary Receipt Point: Upstream Pipeline Project Primary Delivery Points: Downstream Pipeline Project FPL s Martin Plant & Riviera Beach Lateral Delivery Pressure: 850 psig Hourly Delivery Rights: 5% of MDQ per hour Bidders are encouraged to include additional interconnections 8

9 FPL is requesting a fixed price but will allow limited alternative pricing mechanisms Pricing Alternatives Bidders can submit a Fixed Price Proposal and/or an Alternative Price Proposal A Fixed Price Proposal must include a fixed demand/reservation rate that is not subject to any adjustments An Alternative Price Proposal must include a demand/reservation charge that is subject only to specific pricing adjustments provided by Bidder All proposed pricing adjustment mechanisms must be based on independent, verifiable indices (bidder must provide five years of historical performance of such indices) Must include a price cap FPL prefers a fixed price but will consider alternative pricing mechanisms as long as they meet the requirements specified above Alternative Price Proposals will be evaluated under a number of scenarios including at the price cap 9

10 FPL has set certain minimum requirements to ensure that bidders are qualified to bid RFP Minimum Requirements Submission: Proposals must be received by FPL on or before 3:00 PM Eastern Time on April 3, 2013: 4 printed copies (in binders) and 5 electronic copies (CD) of all 15 forms (including required attachments) provided in the RFP Must post a Bid Bond of $2.0 MM Must include the $25,000 Evaluation Fee Price and Project Specifications: Bidders must submit the required pricing information Fixed Price or Alternative Price (must be based on published indices and must include cap) Proposal must be for the project specifications provided by FPL Completion Security Bidders must agree to provide the Completion Security if selected as the Winning Bidder 10

11 Failure to satisfy the minimum requirements will be grounds for rejecting a proposal RFP Minimum Requirements Disclaimer: To ensure integrity of the RFP process and to ensure FPL and winning bidders will not become involved in a legal dispute to the detriment of FPL s customers, all bidders must agree not to assert in any forum (legal, regulatory, etc.) any claim or complaint with respect to the RFP process Financial Viability: Bidders must provide information and a detailed description of the financing utilized by bidder (or bidder s parent company) for the last three large scale energy projects constructed Bidders must provide basic capital structure of proposed project Binding Nature of Proposal: All proposals must remain valid for 120 days Proposals must be certified by an officer of the company 11

12 All proposals will be evaluated based on economic and noneconomic factors Evaluation Process A consultant will assist FPL in the evaluation of all proposals Proposals not meeting Minimum Requirements are subject to rejection If a bid is rejected, 75% of the Evaluation Fee will be refunded The economics of all proposals will be evaluated on the basis of the Cumulative Present Value Revenue Requirements (CPVRR) CPVRR will be evaluated based on a 40-year term (similar to FPL s evaluation of other linear facilities) For proposals without a unilateral right to extend for three five-year periods, FPL will assume the demand charge will escalate at 2.5% per year for years 26 through 40 Alternative Price Proposals will be evaluated using the indexed values for a range of assumptions and at the cap 12

13 Bidders are encouraged to consider proposing new pipeline infrastructure and creative, value-added features Evaluation Process FPL will also evaluate the proposals based on a number of non-economic factors FPL has a strong preference for new, independently routed pipeline infrastructure to enhance competition and supply reliability A portion of the non-economic evaluation will be based on the bidder s acceptance of the terms and conditions proposed in the Precedent Agreement Proposals will also be evaluated based on: Expansion capabilities Right to future expansions at incremental costs Rate and service stability Operational flexibility Tariff provisions Access to additional supply sources Bidder s creditworthiness 13

14 Bidders are required to complete a number of forms that must be included with each bid package submitted FPL has developed 15 forms to help collect and organize the information that has been requested in the RFP All bidders must submit these forms and the appropriate attachments with each bid package These forms include: Required Forms #1 Proposal Pricing #6 #2 Executive Summary #7 Identification and Qualification of Entities Permits, Licenses and Regulatory Approvals & ROW Experience #11 Contractual Provisions #12 Optional Quantities #3 Financial Information #8 Public Outreach Program #13 Tariff #4 Major Milestones and Completion Security #5 Respondent s Experience #9 Financing #14 Respondent s Exceptions to the RFP #10 Bid Bond #15 Proposal Certification 14

15 Bidders are asked to provide projected completion dates for a number of project milestones Form #4: Major Milestones Critical Milestones Projected Completion Date FERC Pre-Filing Process FERC Application Filed Other Federal Applications Filed Environmental Permits Filed FERC Preliminary Determination Granted FERC Certificate Granted Other Federal Authorizations Granted All Environmental Permits Long Term Financing Closed Engineering Contracts Executed Construction Contracts Executed Execution of Transporter s Pipe Contract(s) Execution of Transporter s Compressor Contract(s) Acquisition of All ROW and Other Surface Rights All Authorizations Required to Start Construction Issued Construction Starts Major Equipment Deliveries (specify date for each) Interconnection Agreements Executed Expected Commencement Date X 5/1/2017 X X X X 15

16 RFP package includes a draft Precedent Agreement for each pipeline segment Precedent Agreement FPL has provided draft Precedent Agreements Contain FPL s proposed terms and conditions Bidder may determine to use other documents (e.g., Service Agreement, Negotiated Rate Agreement and/or Tariff) for each proposed term and condition The extent of bidder s acceptance of these terms and conditions will be considered during the non-economic evaluation Bidders must attach draft forms of Service Agreement and Negotiated Rate Agreement These agreements should be complete, executable documents with all appropriate attachments included 16

17 All proposals must be received by FPL no later than 3:00 PM Eastern Time on Wednesday, April 3 rd RFP Questions Questions concerning the RFP should be submitted via to: 2012FPLGASTRANSPORTATIONRFP@fpl.com Each week, FPL will update the Q&A link on the website ( Respondents should periodically check the website for RFP updates 17