LUBBOCK POWER & LIGHT
PURCHASING DEPARTMENT
402 MUNICIPAL DRIVE
LUBBOCK, TEXAS 79403
Phone: (806) 775-2170 Fax: (806) 775-3590
ADDENDUM #1
RFP NUMBER: 7128-14-EUA
TITLE: LP&L Capacity and Energy Supply Services
DUE DATE: September 22, 2014 not later than 2:00 p.m. CST
PRE-BID: August 11, 2014 at 10:00 a.m. CST
DATE ISSUED: August 4, 2014
All requests for additional information or clarification must be submitted in writing and directed to:
Buyer Name: Felix Orta
Email: [email protected]
The following items take precedence over requirements for the above named Request for Proposal (RFP). Where any
item called for in the RFP documents is supplemented here, the original requirements, not affected by this addendum,
shall remain in effect.
Questions and Answers (please see answers in red):
1. In the NPV evaluation on which proposals will be compared, please advise how the 100 MW of wind
supplied by SPS to LP&L from 2019 to 2032 will be modeled.
ANSWER: The wind generation is modeled as an hourly transaction in PROMOD® based on the
Oklahoma_36N_14 synthesized hourly profile provided by Ventyx and originating from the National
Renewable Energy Laboratory (NREL) Eastern Wind Integration Transmission Study (EWITS). The
wind supplied by SPS to LP&L (2019 to 2032) is subtracted from the hourly load profile for the
WTMPA system.
2. If a new facility is built at the Preferred Site, it will likely have multiple generators and multiple
GSU’s. The RFP states that LP&L scope will begin at the high side of the GSU. Please confirm this is
the case for a multiple GSU proposal, and that the cost of interconnecting the new facility to the
230kV system, including any desired onsite substation at the Preferred Site, will be in LP&L’s scope
of supply.
ANSWER: For new facilities built at the Preferred Site with multiple GSU’s, the delivery point will
be the high side of the GSU’s. LP&L will be responsible for any substation or switchyard as well as
any SPP interconnection costs for proposals providing all of their capacity to LP&L.
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3. Please confirm that the same financial assumptions used in LP&L’s self-build analysis (5.5% discount
rate and 2.5% general inflation rate) will be used in the NPV evaluation of bidder proposals.
ANSWER: The NPV evaluation of all bidder proposals will assume a 5.5 percent discount rate and a
2.5 percent general inflation rate.
4. Please confirm that LP&L intends to commit to a supplier and proposal submitted under this RFP
process in lieu of its self-build option at the end of this process should the evaluation results identify a
superior solution.
ANSWER: LP&L intends to commit to a supplier and proposal submitted under this RFP process in
lieu of its self-build option at the end of this process if selecting the solution is in LP&L’s best interest.
5. If a bidder proposes to use the Preferred Site, and LP&L elects not to acquire ownership of the facility
at the end of the contract term, please confirm that a mechanism to extend the land lease will be
considered, or advise if bidders should assume they would have to remove the facility at the end of the
term in such a scenario.
ANSWER: LP&L will entertain provisions for extending the land lease beyond the original terms if
LP&L elects not to acquire ownership.
6. If a proposal interconnects directly with LP&L at the Preferred Site with a 30-year contract term,
please advise if an Interconnection Agreement between LP&L and the Facility Owner will be required.
Additionally, please confirm that LP&L will handle all necessary interface and studies required to
integrate the facility into the regional grid.
ANSWER: An Interconnection Agreement between LP&L and the Facility Owner will be required.
For a facility built at the Preferred Site, LP&L will be responsible for all necessary interface and study
requirements to integrate the facility into the regional grid for the capacity supplied to LP&L to the
extent allowed by SPP.
7. Please confirm our understanding, in Section 5, that simple cycle combustion turbine proposals under
a tolling agreement must provide three days’ supply of No. 2 oil as backup, which implies that the
turbines need to be dual fuel, but that combined cycle offers can be natural gas fired only.
ANSWER: Under a tolling agreement arrangement, LP&L intends to provide interruptible gas service
for simple cycle alternatives and firm gas service for combined cycle alternatives. For interruptible gas
service three days’ of supply of No.2 oil as backup is required.
8. Section 5, please confirm that, under a tolling agreement, the bidder only needs to provide storage
capacity for three days of No. 2 oil, and that the actual supply and ownership of the oil would be by
LP&L.
ANSWER: Under a tolling agreement, the bidder only needs to provide storage capacity for three
days’ supply of No. 2 oil. LP&L will supply and own the oil.
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9. If a tolling agreement is proposed for a facility located at the Preferred Site, LP&L will deliver the gas
to the site via a new pipeline per the RFP. Please confirm that the bidder should assume that the gas
metering facilities are included in LP&L’s scope, or advise if provisions for gas metering need to be
accounted for in the bidder’s scope in this scenario.
ANSWER: Under a tolling agreement arrangement for a facility located at the Preferred Site, LP&L
will be responsible for gas metering facilities to the site delivery points.
10. The RFP states that bidders should assume a minimum natural gas delivery pressure of 561 psig at the
site boundary. Please advise the nominal and maximum design pressure that need to be
accommodated.
ANSWER: As of July 29, 2014 the selection of the upstream transmission pipeline has not been made
and therefore the bidder should assume a range of estimated pressures (minimum, nominal and
maximum). At this time these pressure estimates are reasonable assumptions for purposes of
responding to the RFP, however they may vary based on the final negotiations with the upstream
pipelines:

It is estimated that the minimum pressure delivered to the site boundary will range between
531 psig and 561 psig.

It is estimated that the nominal pressure delivered to the site boundary will range between 751
psig and 802 psig.

It is estimated that the maximum pressure delivered to the site boundary will range between
961 psig and 1168 psig.
11. Please advise LP&L’s estimate of gas transportation costs which will be added to its fuel price
assumptions for the purposes of evaluating tolling agreement proposals.
ANSWER: For interruptible supply of natural gas, gas transportation costs are estimated to include a
delivery charge of a commodity rate of $0.16/MMBtu (2014 dollars) plus a fuel rate of 1.23% of the
hub price. Firm natural gas supply includes a daily reservation rate of $0.19/MMBtu (2014 dollars)
and a variable commodity rate of $0.01/MMBtu (2014 dollars) plus a rate of 2.0% of the hub price
(variable commodity rate = ANR SW hub Price x 2.0% + $0.19/MMBtu).
12. Page 33 of the RFP states that bidders should assume 2846 annual hours of operation and 221 starts
for a CCGT (~13 hours per start), and 91 annual hours and 27 starts for each SCGT (3.4 hours/start).
Please respond to the following:
a. Please provide the assumed technology (machine and model) and/or operating characteristics
upon which this forecast dispatch is based.
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ANSWER: LP&L is not committed, nor does it have any preference with respect to vendor or
models of combustion turbine or combined cycle equipment. The self-build assessment
assumed F-class combustion turbines.
b. For both simple cycle and combined cycle configurations, the run hours per start seem to
dictate a starts-based maintenance program. For evaluation purposes, please indicate whether
LP&L is assuming, for its self-build option, an LTSA with the manufacturer to perform
scheduled maintenance for the combustion turbines or that it would self-perform scheduled
CTG maintenance.
ANSWER: For the self-build option LP&L assumed combustion turbine maintenance
expenses that are indicative of costs expected under a long term service agreement. However,
LP&L has not made any final decisions on LTSA or self-perform scheduled CGT maintenance.
Based on the assumed operating profiles it is expected that CT maintenance frequency will be
based on starts rather than operating hours.
c. If a bidder proposes a technology with improved operating characteristics compared to LP&L’s
assumed self-build option, such technology may cause increased dispatch of the units being
proposed. This would have both a positive (increased operating revenue) and negative (more
frequent scheduled maintenance) impact. LP&L’s evaluation method may not accurately
account for these impacts if the dispatch profile is fixed for all proposals. Please advise how
LP&L will account for this issue in the evaluation process.
ANSWER: LP&L will use the valuation model outlined in Section 7.2.1 of the RFP. As stated
in the RFP, for proposals not screened out in the bus-bar analysis, “a more detailed, integrated
evaluation using the chronological production costing model PROMOD® that, in the base
case, will assume operation of the proposed option and all WTMPA assets in the SPP
Integrated Marketplace.”
13. Please provide any available geotechnical reports for the Preferred Site.
ANSWER: No geotechnical reports are available.
Thank You,
Felix Orta, CTPM
Purchasing Mgr. Electric Utilities
Lubbock Power & Light
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