Time-Sensitive Electricity Pricing Demonstrations $2.4 Million Available Program Opportunity Notice (PON) No. 671-02

The New York State Energy Research and Development Authority (NYSERDA) invites proposals that enhance customer choice and expand demand responsiveness in the retail electricity marketplace. Projects that demonstrate and evaluate innovative time-sensitive electricity rates and technologies that facilitate their adoption (e.g., advanced meters, gateways, direct load control, and display technologies) are requested.

Proposal teams should include appropriate entities to manage all of the following functions: provide electricity to customers, install and service meters, read meters, and provide meter data and billing services. Preference will be given to proposals that include at least 500 residential customers (1000 if the customers reside in multi-family buildings) or at least 150 small-to-medium sized commercial/industrial customers (i.e., sites with less than 1.5MW load). Projects that involve customers from multiple end-use sectors are also eligible. It is preferred, but not required, that proposals articulate a plan where the actual demonstration phase (e.g., all customer recruitment/education, technology installation, rate development, and billing system setup is complete) begins in Spring 2003. The demonstration phase of each project should last for at least 2 years.

NYSERDA anticipates making multiple awards at a maximum funding commitment of $600,000 per project, for a total not to exceed $2,400,000. All proposals are preferred to be cost-shared at or above 33%. Awards will not require repayment but may require the team, including the end-users, to participate in an independent evaluation of project effectiveness. NYSERDA funds may be used for customer education and marketing, innovative rate design, the purchase and installation of enabling technologies, meter reading, customer billing, administration and project evaluation. It is anticipated that award recipients will be notified by mid-December.

Nine copies of your proposal must be clearly labeled and submitted to:

Karen Whalen
PON No. 671-02
NYS Energy Research and Development Authority
17 Columbia Circle
Albany, New York 12203

Technical questions: Dave Coup at (518) 862-1090, ext. 3379 or jdc@nyserda.org; Contractual questions: Diane Vogel at (518) 862-1090, ext. 3299 or drv@nyserda.org.

This is not the entire solicitation. Those who intend to propose should visit the NYSERDA website (http://www.nyserda.org/stdforms.html) and review a copy of the standard contract terms and conditions (item 1 and sections 5-7 of item 10) and application forms (items 7-9). These items can also be obtained by contacting Karen Whalen (518) 862-1090 ext. 3268.

* Late proposals will be returned. Faxed or e-mailed proposals will not be accepted. Proposals will not be accepted at any other NYSERDA location other than the address specified above.

I. PROPOSAL REQUIREMENTS

Submit nine (9) copies of your proposal in the following format:

Proposal Checklist - Complete the proposal checklist attached to this PON, and include it as the front cover of each copy of your proposal. Be sure the individual signing the Checklist is authorized to commit the proposer's organization to the proposal as submitted.

Executive Summary/Abstract
Briefly summarize the proposed effort emphasizing the proposed rate structure/technology solution, teaming arrangements, and project benefits.

Proposed Demonstration and Technology Solution
Describe each of the following aspects of the proposed demonstration project. While explaining each element, clearly delineate the role and involvement of each party participating in the project, including that of end-users, technology vendors, consultants, energy service providers, and entities that will provide various meter related services:

• Describe the number and type of customers (i.e., sector, size, location) that will be involved in the demonstration. Provide details about any customers that have already agreed to participate in the demonstration. Proposals containing evidence of customers' commitments to participate will be given preference. Explain the team's specific gameplan for marketing the program and recruiting additional customers. Eligible customers should be located in the service territories of Central Hudson Gas & Electric Corp., Consolidated Edison Company of New York, Inc., New York State Electric & Gas Corporation, Niagara Mohawk Power Corporation, Orange and Rockland Utilities, Inc., or Rochester Gas and Electric Corporation and pay the System Benefits Charge. Projects proposed for New York Power Authority customers or with customers in the Long Island Power Authority territory must articulate how the lessons learned from the project will result in state-wide public benefits (e.g., replicable elsewhere in New York) and appropriate co-funding will be required.
  
  
• Provide a systematic description of the innovative pricing structure to be demonstrated and evaluated under this project. Include a description of the type of rate to be offered (e.g., 4-block time-of-use with a critical peak pricing period, hourly prices based on the wholesale electricity market, etc.). Explain whether this rate currently exists or whether it will be developed under this project. Describe any fees or obligations that customers will need to fulfill (e.g., access fees, monthly fees, or minimum contract periods). Explain whether the rate has been (or will be) designed to be revenue neutral (e.g., the energy services provider receives the same amount of revenue from customers if they do not change their usage patterns). Provide as much detail about the rate structure(s) to be demonstrated as possible and the rationale for selecting it versus other pricing options. Include information on transmission/distribution, commodity and other charges, if necessary. Enclose draft New York State Department of Public Service (NYDPS) tariff leaves, if necessary.
  
  
• Provide an explanation of each technology component involved (hardware and software) and the functions that they will perform including a description of the system architecture and interfaces (a diagram of system components and data flow is strongly encouraged). This explanation should include a description of data reporting and graphics capabilities (on-site energy pricing/consumption displays, web browser energy information system, etc.). Metering technologies must: 1) have at least hourly-interval measurement capability; 2) be approved by the NYDPS (this requirement does not apply for submeters); and 3) have remote access capability.
  
  
• Describe the kind of education that will be provided to customers on how to benefit from the time-sensitive rate and any enabling technologies being utilized under the project. Describe the synergy between the technology solutions and the innovative rate being offered. Explain whether and how site-specific curtailment strategies/advice will be provided to customers. Essentially, the proposal should explain why this team's approach will dramatically facilitate customers' ability and motivation to respond to dynamic prices.
  
  
• Explain how meter reading and billing will be performed (e.g., actual vs. "shadow" billing, e-billing through Internet, etc.). If applicable to the demonstration, explain how the settlement and balancing process will be managed between the energy service provider and both the utility/transmission owner and the New York Independent System Operator.
  
  
• Detail how your team will perform a dry run test of the overall technology and billing system.
  
  
• Describe how this demonstration project can be adjusted to meet future needs and explain the program expansion plan for applying this program to larger groups of end-users.

Performance and Benefits
Explain the team's approach for evaluating the results and benefits of the project. At a minimum, the team should describe how it will evaluate the following:

• The number of customers that registered for the program and the number that completed it.
  
  
• A characterization of the actual changes in load in response to various price signals (e.g., kWh decreases, kw reductions). Include an assessment of which price responsive load strategies were/weren't effective - and explain why.
  
  
• The cost/benefit of the program to the energy service provider (e.g., provide analysis explaining whether this program is a sustainable business model), to the end-users involved (e.g., characterize the changes in customers' electricity bills), and other customers in the marketplace (e.g., quantify the potential reduction of peak prices in the marketplace).
  
  
• The aspects of the rate structure that promoted/detracted from price responsive behavior.
  
  
  
• The features of the enabling technologies that promoted/detracted from price responsive behavior
  
  
• Customer satisfaction with the enabling technologies and innovative pricing scheme.

Statement of Work
List the major tasks necessary to complete the project. Provide a detailed description of each task, indicating who will perform it, how it will be performed, and anticipated results and deliverables. Describe the work to be performed in clear, concise, action-oriented sentences. Use the following phrase to start each task: "The Contractor shall ...."; and clearly indicate the scope of work to be performed. Include a task that explains how the team will evaluate the effectiveness of the rates and technologies used in the project and another task that explains how the program will be expanded to other customers if the project is viewed to be a success.

Schedule
Prepare a master schedule showing starting and completion times for each task outlined in the Statement of Work in terms of weeks or months. Identify major milestones (e.g., customers recruited, technology installed, rate developed, customers educated on how to be price responsive, billing system setup, demonstration begins/ends, evaluation begins/ends, etc.), reporting intervals and other deliverables, as well as meetings.

Proposer Qualifications
Briefly describe each organization and the department or group proposing to carry out the work. Include education and experience that are relevant to the proposed work. Describe the team's understanding of and experience with the New York State energy market. Enclose one-page resumes of all key project personnel, including those of subcontractors and consultants, in the appendix. Place any brochures in an appendix.

Budget
Complete the Contract Pricing Proposal Form (CPPF) for the proposed project and include it in the proposal. A separate breakdown of the budget by the following categories is also preferred: 1) program marketing and customer recruitment; 2) innovative rate design; 3) the purchase and installation of enabling technologies; 4) meter reading, data management and customer billing; 5) customer education/support to develop price-responsive strategies; 6) project administration (including monthly progress reports and a final report); and 7) project evaluation costs. Note that the proposals are preferred to be cost shared at or above 33%; however, alternate levels could be considered. The proposer's cost share may include in-kind contributions and may also include funding from other organizations. Proposers may NOT obtain funding from NYSERDA's Peak Load Management, Residential Comprehensive Energy Management, or Advanced Monitoring programs for the work to be conducted under this solicitation.

It is anticipated that successful proposers will be notified by mid-December. For successful proposals NYSERDA may, at its sole discretion, allow for the reimbursement of identified costs incurred after the award notification date and prior to the execution of an agreement in order to expedite work on the project. Provided that the successful proposer has received written notice from NYSERDA allowing payment of the identified costs and the proposer and NYSERDA execute an agreement for this project, the contractor may invoice NYSERDA for these costs after executing the agreement. Notwithstanding such written notice, successful proposers will be conducting work at their own risk until an agreement is fully executed.

Letters of Commitment or Support
Include letters of commitment, signed by a person authorized to contractually obligate the organization for all participating organizations and cost sharing parties. Letters from the entities that will be providing the following services/functions under the project should be included: provide energy to customers, market the project and recruit customers, install and service meters and/or other technologies, read meters, and provide meter data and billing services. Letters from end-users that have committed to participate in the project should be included. All participating organizations should include a statement of their willingness to participate in the program evaluation process with NYSERDA and the rest of the project team. Absence of letters of commitment or support will be interpreted as the proposer not having commitment or support from those parties.

II. PROPOSAL EVALUATION

Proposals that meet all the Proposal Requirements will be reviewed and ranked for technical merit, program merit, and cost-value relationship, including cost-sharing or co-funding, by a Technical Evaluation Panel (TEP). Verbal presentations may be required of each proposal team as part of the evaluation process. Presentations may be conducted in person or over the phone in a manner that minimizes effort/cost for the proposal team. After the proposals are reviewed, NYSERDA will issue a letter to each proposer indicating the proposal evaluation results. Proposals will be scored according to the following technical criteria listed in order of importance:

Proposed Work - How many end-use customers will be involved in the project and how do these numbers compare against the preferred minimum targets? Does the proposal include an effective marketing and recruitment strategy for the targeted customer base? Does the proposal include sufficient detail about the innovative rate structure to be offered and provide compelling information about why this price structure will be attractive to both end-use customers and to the provider of the rate (e.g., show that there will be sufficient incentives for customers to change behavior to save money and to reduce peak load)? Does the proposal effectively explain how customers will be educated on strategies that will allow them to be price-responsive? Are these price responsive load strategies realistic given the end-use sector, rate structure, and technologies involved? Does the proposal include an effective approach for managing the essential metering, data management, billing, and balancing/settling activities? Is the schedule both aggressive and realistic? Does the proposal clearly articulate the roles of all of the team members and does it contain sufficient evidence that a complete team is in place? Is the proposed work innovative, well-conceived, and technologically feasible? Does the solution advance or employ the state-of-the art technologies? Is the proposed solution flexible, allowing for rapidly changing market issues and requirements of future dynamic pricing programs? Does the proposal include a comprehensive plan for evaluating program effectiveness? Is the project scalable, and can it be applied on a larger scale and to a wider audience?

New York State Energy, Economic and Environmental Impact - Does the proposed effort result in energy and cost savings benefits for the customers and the energy service provider? How much load reduction/shifting is anticipated? Does the team include New York State organization(s)? Does a significant portion of the proposed activity occur in New York State? Does the proposed work lead to New York State economic growth and/or yield environmental benefits?

Proposer(s) - Does each member of the team possess the relevant and necessary technical background and experience? Does the team possess the requisite knowledge to develop and market an innovative electricity pricing program to the number and type of customers articulated in the proposal? Does the team demonstrate resourcefulness, cooperation and teamwork? Have all of the necessary team members committed to work together or have they only expressed interest in pursuing the opportunity further?

Statement of Work and Schedule - Is the Statement of Work comprehensive, realistic, explicit, and consistent with the Proposal Requirements? Are staff allocations reasonable? Is the schedule reasonable and complete?

Cost Criteria - Is the overall cost reasonable? Is the overall project cost justified based on the expected outcome and benefits? Is the co-funding 33% or more? Are the proposer's co-funding contributions (cash, in-kind services etc.) justified and reasonable?

Other Considerations - Projects will be reviewed to determine whether they reflect the overall objectives of NYSERDA. Some of the considerations include:

• The balance among NYSERDA projects of long-term and short-term benefits, and risk/reward relationships;
  
  
• The general distribution of NYSERDA projects among diverse end-use sectors, as well as the distribution of projects within New York State.

III. GENERAL CONDITIONS

Proprietary Information - Careful consideration should be given before confidential information is submitted to NYSERDA as part of your proposal. Review should include whether it is critical for evaluating a proposal, and whether general, non-confidential information, may be adequate for review purposes.

The NYS Freedom of Information Law, Public Officers law, Article 6, provides for public access to information NYSERDA possesses. Public Officers Law, Section 87(d)(2) provides for exceptions to disclosure for records or portions thereof that "are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise and which if disclosed would cause substantial injury to the competitive position of the subject enterprise." Information submitted to NYSERDA that the proposer wishes to have treated as proprietary, and confidential trade secret information, should be identified and labeled "Confidential" or "Proprietary" on each page at the time of disclosure. This information should include a written request to except it from disclosure, including a written statement of the reasons why the information should be excepted. See Public Officers Law, Section 89(5) and the procedures set forth in 21 NYCRR Part 501.

Omnibus Procurement Act of 1992 - It is the policy of New York State to maximize opportunities for the participation of New York State business enterprises, including minority- and women-owned business enterprises, as bidders, subcontractors, and suppliers on its procurement Agreements.

Information on the availability of New York subcontractors and suppliers is available from:

Empire State Development
Division For Small Business
30 South Pearl Street
Albany, NY 12245

A directory of certified minority- and women-owned business enterprises is available from:

Empire State Development
Minority and Women's Business Development Division
30 South Pearl Street
Albany, NY 12245

Contract Award - NYSERDA anticipates making multiple awards under this solicitation. It may award a contract based on initial applications without discussion, or following limited discussion or negotiations. Each offer should be submitted using the most favorable cost and technical terms. NYSERDA may request additional data or material to support applications. NYSERDA will use the Sample Agreement to contract successful proposals.

Limitation - This solicitation does not commit NYSERDA to award a contract, pay any costs incurred in preparing a proposal, or to procure or contract for services or supplies. NYSERDA reserves the right to accept or reject any or all proposals received, to negotiate with all qualified sources, or to cancel in part or in its entirety the solicitation when it is in NYSERDA's best interest.

Disclosure Requirement - The proposer shall disclose any indictment for any alleged felony, or any conviction for a felony within the past five years, under the laws of the United States or any state or territory of the United States, and shall describe circumstances for each. When a proposer is an association, partnership, corporation, or other organization, this disclosure requirement includes the organization and its officers, partners, and directors or members of any similarly governing body. If an indictment or conviction should come to the attention of NYSERDA after the award of a contract, NYSERDA may exercise its stop-work right pending further investigation, or terminate the agreement; the contractor may be subject to penalties for violation of any law which may apply in the particular circumstances. Proposers must also disclose if they have ever been debarred or suspended by any agency of the U.S. Government or the New York State Department of Labor.

Attachments
Attachment A - Intent To Propose Form
Attachment B - Proposal Checklist
Attachment C - Contract Pricing Proposal Form (CPPF) with supporting schedules
Attachment D - Sample Agreement
Attachment E - Web Addendum (Sections 5-7)
Attachment F - Tentative Agenda for Time-Sensitive Pricing Workshop (Attendance is Optional)

17 Columbia Circle, Albany, NY 12203-6399    Toll-Free: 1-866-NYSERDA or Local: 518-862-1090    Fax: 518-862-1091
New York City and Buffalo Regional Offices

© 2004 New York State Energy Research and Development Authority