O AHU ENERGY STORAGE SYSTEM REQUEST FOR PROPOSALS RFP NO

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1 O AHU ENERGY STORAGE SYSTEM REQUEST FOR PROPOSALS RFP NO

2 REQUEST FOR PROPOSALS Hawaiian Electric Company, Inc. ( Hawaiian Electric ) hereby requests a proposal for a firm lump- sum price proposal to Engineer, Procure, and Construct ( EPC ) energy storage systems ( ESS ) from 60 megawatts (MW) up to 200 MW for 30 minutes to grid, to be installed on the island of O ahu in the state of Hawai i. This Request for Proposals ( RFP ) is being sent to you and others as potential contractors. Hawaiian Electric requires that responsive proposals be submitted consistent with the requirements set forth herein. PROPRIETARY RIGHTS AND CONFIDENTIALITY OF RFP This RFP has been prepared exclusively for Hawaiian Electric and is proprietary in nature. Hawaiian Electric reserves all copyrights for this document and its constituent parts and prohibits any unauthorized use or reproduction hereof. All or portions of this RFP and/or Attachments hereto may be designated or marked confidential ("Confidential Information"). Confidential Information shall not be disclosed to third parties without Hawaiian Electric's prior written consent, except that you may disclose Confidential Information to your consultants, affiliates, attorneys or potential subcontractors who need the Confidential Information for purposes of preparing a responsive proposal, and provided that such recipient is advised of the confidentiality of the Confidential Information and is bound by agreement or otherwise to preserve the confidentiality of the same. RFP DOCUMENTS This RFP includes and incorporates the following attached documents: Attachment A: Intent to Bid Form Attachment B: RFP Schedule Attachment C: Requested Bidder Information Attachment D: RFP Project Specification Attachment E: Schedule of Permits and Government Approvals Attachment F: Bidder s Response Package Attachment G: Hawaiian Electric State of the System Summary for ESS RFP Attachment H: Draft EPC Contract Page 1

3 SUMMARY OF PROJECT BRIEF BACKGROUND Hawaiian Electric is a regulated electric public utility engaged in the production, purchase, transmission, distribution and sale of electricity. Hawaiian Electric intends to install one or more ESS ( Project ) from 60 MW up to 200 MW for 30 minutes. The Project includes but is not limited to engineering, procurement, construction, testing, commissioning, start-up and performance verification. Hawaiian Electric is seeking ESS solutions to provide the opportunity for the continuing integration of increasing renewable energy generation. Due to several factors, variable renewable energy penetration onto the island grid is increasing rapidly. Hawaiian Electric s plan to meet consumer energy needs with increasing amounts of renewable energy is detailed within an Integrated Resource Plan filed with Hawai i s Public Utilities Commission on June 28, 2013 in Docket No The Integrated Resource Plan (IRP) is available on the internet 1. The renewable energy sources on the island of O ahu are primarily wind generation and photovoltaic (PV) generation. PV on the island is both large scale farm installations and distributed rooftop solar from Hawaiian Electric customers. Wind generation is from large scale wind farms. This rapid growth in variable renewable energy penetration to the electrical grid has become a challenge to manage. The intermittent nature of wind and solar generation requires that the existing thermal generation fleet continue to be available. This has led to inefficient utilization of the existing thermal generation fleet since it needs to manage the volatility of the variable generation. Voltage and frequency regulation on the grid are expected to become increasingly challenging with progressively higher levels of variable renewable generation. Hawaiian Electric anticipates that the ESS will assist in addressing these challenges and allow for more of O ahu s electricity to come from variable renewable resources by providing certain functions, including but not limited to sub-second frequency response and minute-to-minute load following, to the extent it is cost effective. Refer to Attachment G for a more in-depth discussion of these topics. The purpose of this RFP is to enable Hawaiian Electric to evaluate ESS options and potential EPC contractor(s) and ultimately select a contractor(s). The selected EPC contractor(s) 1 Page 2

4 shall meet all Hawaiian Electric procedures and practices, worker safety requirements, and shall have demonstrated the technical engineering, construction and commissioning capabilities prior to award. Refer to Attachment C. Contractors bidding to this RFP ( Bidder ) will be evaluated and selected on the basis of certain price (overall cost) and non-price criteria, including but not limited to design concept and feasibility, implementation and operational viability and operating flexibility. Hawaiian Electric reserves the right to maintain flexibility in the selection process due to the complexity of selection and development for the ESS. REQUIREMENTS Proposals shall be submitted for the required engineering, procurement, construction, testing, commissioning, start-up and performance verification to engineer, procure and construct the Project from 60 MW up to 200 MW for 30 minutes ESS (hereinafter called Work ) set forth in Attachment D, EPC Specification ( Specification ) and the documents listed in this RFP. Bidders may offer a range of options for output capacity, in MW, as provided in Attachment D, to enable Hawaiian Electric to determine the most cost-effective fit for its electrical system. The following sections contain instructions and Proposal format requirements, which shall be followed by a Contractor in order for a Proposal to be given a complete and proper evaluation. Failure to comply with these bidding instructions may disqualify a Contractor from further consideration. Regulatory Process Per Hawai i Public Utilities Commission ( Commission ) General Order No. 7, Paragraph 2.3(g)(2), projects with expenditures of $2.5 million or more, must be approved by the Commission, if Hawaiian Electric intends to recover project costs through rates charged to its customers. Project expenditures for material procurement and construction are not allowed until the Commission has granted its approval of the project. However, a sufficient amount of planning and engineering work is allowed to develop the project application seeking approval from the Commission. At a minimum, the Commission application should fully describe the justification for the Project and define the scope, schedule and cost estimate of the project. Currently, the Commission s approval process (application submittal to Decision & Order) typically takes 12 to 18 months. The EPC contractor(s) will be required to work with Hawaiian Electric and perform a sufficient amount of planning and engineering work required to develop the application for the Page 3

5 Project, which will be submitted to the Commission for approval. The EPC contractor(s) will also be required to participate (e.g., responding to Information Requests and providing testimony) in the Commission docket with Hawaiian Electric as may be required. Furthermore, the EPC contractor(s) will be responsible to implement the project per the scope, schedule and cost ultimately approved by the Commission. If the Commission-approved application with the scope, schedule and cost that is materially different from the contract executed EPC, Hawaiian Electric will have the option of executing an amendment to the EPC Contract(s) to address the difference or terminate the contract(s). In selecting an EPC contractor(s) for this Project, Hawaiian Electric will evaluate the entire Proposal (from inception of planning and engineering to start of commercial operation). However, in order to conform to the regulatory process, Hawaiian Electric will initially issue a Notice-To-Proceed to the successful EPC contractor(s) on only the planning and engineering activities that are required to support application for the approval of the Project. The Notice- To-Proceed on the remainder of the EPC Contract(s) (e.g. detailed engineering, procurement, construction) will be issued after receiving Commission approval for the Project that is acceptable to Hawaiian Electric. Therefore, the EPC contractor(s) s proposal should clearly define the planning and engineering activities that are required to support the regulatory approval process, including the associated labor effort and costs. Overall Schedule In the 2013 Integrated Resource Plan Report and Action Plan filed by Hawaiian Electric with the Commission in June 2013, the following milestone schedule was outlined in Chapter 20 for an energy storage project: Complete preliminary design and engineering 2 nd Qtr Release Request for Proposals for turn-key ESS project 2 nd Qtr Execute turn-key ESS project contract 4 th Qtr File G.O. 7 application with the Commission 4 th Qtr As part of a proposal, the EPC contractor(s) is required to develop a detailed Project schedule with critical path activities clearly identified that meets the IRP milestone schedule above. Since the IRP was issued, the Project has also increased in size. Therefore the actual Project schedule will differ from the schedule in the IRP. It may be possible to re-sequence the Project tasks or do some of the task concurrently. It is still the goal of this Project to have the EES in service in the first quarter of 2017, or sooner. Page 4

6 Potential ESS sites are anticipated to be located within Hawaiian Electric substation facilities and properties. Ultimate siting shall be determined after award. Time is of the essence for construction of the Project and shall be completed by the date as specified herein. Page 5

7 COMMERCIAL TERMS AND CONDITIONS Following the RFP process, Hawaiian Electric and the selected Bidder(s) will execute the EPC Contract. The EPC Contract will be based in part on the selected contractor s Proposal and other information, if any, submitted by the Bidder during the RFP process. In addition to the EPC services to be provided, a complete system warranty and maintenance support shall be provided per periods indicated in Attachment D Section 1.7. INSTRUCTIONS FOR SUBMISSION OF PROPOSALS PROPOSAL REQUIREMENTS, TERMS AND CONDITIONS 1. Definition of Terms and Abbreviations Bidder Commission refers to a supplier of goods and/or services who submits a Bid in response to this RFP. refers to the state of Hawai i Public Utilities Commission. Consumer Advocate refers to the Consumer Advocate for the Department of Commerce and Consumer Affairs, Division of Consumer Advocacy Day EPC Contract ESS refers to a calendar day. refers to the Engineer, Procure, Construct contract to be executed by Hawaiian Electric and the Selected Bidder following the RFP process. means energy storage system. IRP MW Potential Bidder refers to the 2013 Integrated Resource Planning Report and Action ( IRP ) filed by Hawaiian Electric. means Megawatt. refers to a potential supplier of goods and/or services to whom Hawaiian Electric has sent this RFP. Page 6

8 Project Proposal Proposal Due Date Selected Bidder Specification Work refers to the ESS solicited in this RFP. The Project encompasses engineering, procurement, construction, testing, commissioning, start-up and performance verification of the ESS from 60 MW up to 200 MW for 30 minutes of energy storage. refers to a bid, quote or proposal submitted by a Bidder in response to this RFP. refers to the date by which a Proposal must be delivered to Hawaiian Electric to be considered for this RFP, which date is identified below. refers to the Bidder(s) selected for award of the EPC Contract under this RFP. refers to the Engineering, Procurement and Construction (EPC) Specification stated in Attachment D. refers to the engineering, procurement, construction, testing, commissioning, start-up and performance verification required to engineer, procure and construct the Project, as specified in Attachment D, EPC Specification, and the documents listed in this RFP. 2. Proposals 2.1. A Proposal may only be submitted by Bidders Please submit the Intent To Submit Bid Form (Attachment A) to the contact person specified in subsection 13.1 of this RFP, by 10:00 a.m. Hawai i standard time, May 16, 2014 to confirm your intention to submit a Proposal. Hawaiian Electric reserves the right to not consider any Proposal from a Bidder who fails to provide a timely Intent To Bid Form The Proposal must be signed and dated by one having authority to contractually obligate the Bidder to the terms of the Proposal. Page 7

9 2.4. The Proposal must be delivered to and received by Hawaiian Electric at the following address on or before the Proposal Due Date: Hawaiian Electric Attention: Judy Facuri, CP11-VP PO Box 2750 Honolulu, HI The Proposal is due on or before 10:00 a.m., Hawaii Standard Time, on July 21, 2014, which date and time constitute the Proposal Due Date. Hawaiian Electric in its sole discretion may cancel or postpone the Proposal Due Date at any time by providing notice to each Bidder, which notice shall be deemed an amendment of this RFP The hardcopy Proposal must be contained in a sealed envelope within the mailing or delivery envelope. The face of such sealed envelope must be clearly marked in large letters with "O AHU ENERGY STORAGE SYSTEM PROPOSAL, RFP No. [ ]: Deliver to Judy Facuri and must also clearly identify the Potential Supplier. Bidder must also (but not in place of a hardcopy) submit an electronic copy of its Proposal to the following address: PurchasingED@hawaiianelectric.com 2.7. Hardcopy Proposals will be date-stamped by Hawaiian Electric on the mailing or delivery envelope as well as on the sealed envelope upon receipt, with such date stamp to be deemed controlling in the event of any dispute whatsoever relating to the delivery of a Proposal The Bidder bears sole responsibility for assuring that the hardcopy Proposal and any electronic copy submitted is complete, correctly formatted, legible, and timely delivered and transmitted Proposals that are delivered after the Proposal Due Date, or otherwise not in conformity with the requirements of this RFP, may be rejected and may not be considered, at Hawaiian Electric's sole discretion The Bidder has the sole responsibility for careful review of the Proposal to correct any errors prior to submission. Hawaiian Electric shall be entitled to rely on the correctness and accuracy of the Proposal contents The Bidder is responsible for proposing all products, terms and/or services that will be Page 8

10 required for or incidental to the delivery of the ESS requested herein, including but not limited to products, terms, and services that may not have been specifically identified or requested herein. If the Bidder s Proposal is accepted and Bidder failed to propose any such product, term, or service, Bidder shall be responsible for providing such product, term, or service at no additional cost to Hawaiian Electric This RFP, the Selected Bidder s Proposal, and all other material representations made by that Bidder in connection with its Proposal may or will be written or incorporated into the Contract between that Bidder and Hawaiian Electric. Thus, by submitting a Proposal, the Bidder understands and acknowledges that Hawaiian Electric will rely on the Proposal and all material representations made by the Bidder in selecting the Bidder and in entering into the Contract, and the Bidder warrants that the statements made in the Proposal and other material representations are truthful and accurate The Proposal constitutes an irrevocable offer to Hawaiian Electric if not modified or withdrawn prior to the Proposal Due Date pursuant to sections 5 or 6, below, which shall remain open and which cannot be withdrawn by the Bidder for a period of ninety (90) days following the Proposal Due Date Based on its evaluation of the Proposals, Hawaiian Electric may require some or all Bidders to answer additional follow up questions and/or submit additional information for Hawaiian Electric s review. Hawaiian Electric is not obligated to request the same follow up information from all Bidders. Following the Proposal Due Date, Hawaiian Electric may request or agree to product or services demonstrations from, or have discussions with, some or all Bidders. 3. Required Information 3.1. The Proposal Letter shall contain complete and accurate responses to the questions set forth in Attachment F hereto The Proposal shall affirmatively state that the contract terms contained in Attachment are acceptable to the Bidder, or, the Bidder shall identify specifically which such terms and conditions are objectionable and shall propose substitute language for the same acceptable to the Bidder. Terms and conditions with respect to which a Bidder does not identify objections shall be deemed by Hawaiian Electric to be acceptable to the Bidder The Proposal must identify the legal name of the specific business entity constituting the Bidder. The Proposal should identify every person, consultant, entity and Page 9

11 subcontractor who played a significant part in preparing or developing the Proposal and who the Bidder expects would be involved in providing the goods or services if selected Proposals should be concise and factually supported. All questions should be answered, but the vendor may indicate why certain questions are not relevant for its product or services. An unanswered question may be treated as an unsatisfactory response. Questions may be answered in whole or in part as appropriate by specific cross-reference to other answers in the proposal. Such cross-references should cite the exact section, page number, and/or paragraph number of the other answer or portion thereof. Imprecise or unclear references to other sections of the proposal, or references that do not specifically answer the question posed will be treated as an unsatisfactory response to the question. All questions must be followed immediately by its answer or reference The Proposal must include complete pricing information with respect to all options if more than one is proposed. 4. Preparation of Proposal 4.1. Submit seven (7) hardcopies of the proposal documents. Electronic copies are to be submitted in a.pdf format Bidders have the sole responsibility for carefully reviewing the RFP and all attachments and for thoroughly investigating and informing themselves with respect to all matters pertinent to this RFP, its Proposal, and its anticipated performance under the Contract. Bidders shall have the obligation to seek clarification of any ambiguities contained in this RFP prior to the Proposal Due Date. Any failure by a Bidder to do so shall be at its sole risk In preparing and submitting Proposals, Bidders shall not rely upon any oral statements made by Hawaiian Electric employees, consultants or agents Each Bidder shall be solely responsible for and shall bear all costs incurred in its preparation of its Proposal and/or its participation in this RFP, including, but not limited to, all costs incurred with respect to the review of the RFP documents, site visits, third party consultant consultation, and investigation and informing itself with respect to matters pertaining to its Proposal and this RFP, and the same shall not be reimbursed by Hawaiian Electric to any Bidder, including the selected Bidder. Page 10

12 5. Modification of Proposal 5.1. A Proposal may be modified at any time prior to the Proposal Due Date In order to modify its Proposal, the Bidder must submit a Revised Proposal, clearly identified as such, which expressly supersedes and replaces the earlier Proposal from the Bidder; the Revised Proposal must identify the date of the earlier Proposal which it is superseding and replacing Revised Proposals are subject to all requirements of this RFP, shall not incorporate or rely upon the Proposal that it is superseding and replacing and must be delivered to or received by Hawaiian Electric on or before the Proposal Due Date A Proposal may not be modified or revised after the Proposal Due Date. 6. Withdrawal of Proposals 6.1. A Proposal may be withdrawn at any time prior to the Proposal Due Date A Proposal will be deemed withdrawn upon receipt by Hawaiian Electric of a Withdrawal of Proposal notice at the office identified in section 2.4, above, on or before the Proposal Due Date Proposals that have been withdrawn pursuant to this section will not be considered by Hawaiian Electric and may be discarded by Hawaiian Electric Proposals may not be withdrawn after the Proposal Due Date for any reason, including, but not limited to, errors or mistakes. 7. Correction of Errors in Proposals 7.1. A Bidder may correct errors in its Proposal prior to the Proposal Due Date by modification or withdrawal of a Proposal pursuant to sections 5 and 6, above. 8. Opening of Proposals 8.1. Proposals will be opened by Hawaiian Electric at such date and time and in such manner as Hawaiian Electric, in its sole judgment and discretion, deems appropriate Bidders are not entitled to be present for Hawaiian Electric's opening of Proposals. Page 11

13 9. Exceptions 9.1. Bidders shall be entitled to take express exception to any term or condition of the RFP All exceptions shall be clearly stated in the Proposal. Each exception shall be separately stated, shall identify the relevant section/subsection of this RFP or its attachments, shall identify the reason(s) for taking the exception, and shall propose a clearly stated alternative Hawaiian Electric shall have the right in its sole judgment and discretion to reject any Proposal or evaluate a Proposal unfavorably based on exceptions taken by a Bidder. 10. Evaluation of Proposals Proposals will be considered relative to other Proposals as well as any additional information as Hawaiian Electric, in its sole discretion, deems appropriate The evaluation of Proposals will be based upon criteria that Hawaiian Electric, in its sole judgment and discretion, believes to be in the best interest of Hawaiian Electric and its customers. Bidders shall not be entitled to disclosure of Hawaiian Electric s evaluation criteria or information pertaining to Hawaiian Electric s actual evaluation and analysis of Proposals Hawaiian Electric shall have the right to reject any Proposal, which Hawaiian Electric, in its sole judgment and discretion, believes to be unsatisfactory or unresponsive, and may, as well, at any time up to the award of the Contract, withdraw this RFP and elect not to award the Contract Subsequent to the opening of Proposals, but prior to award of the Contract, Hawaiian Electric shall have the right to contact any Bidder(s) to request additional information or to clarify a Bidder s Proposal. Hawaiian Electric may do so without notice or disclosure to any other Bidder of such inquiry or of the information derived from such inquiry At Hawaiian Electric s sole discretion, selected bidders may be asked to participate in a site walk through and in-person interviews at Hawaiian Electric facilities. 11. Award Page 12

14 11.1. Hawaiian Electric shall have the right to award the EPC Contract to the Bidder(s) that, in Hawaiian Electric s sole judgment and discretion, has provided a Proposal that is in the best interests and has the best value to Hawaiian Electric and its customers ( Selected Bidder ) Bidders expressly acknowledge that Hawaiian Electric shall have the right to award the EPC Contract to other than the lowest bidder Hawaiian Electric shall have the right to determine not to award the EPC Contract, or to re-bid, restate, revise or cancel this RFP at any time The award of the Contract is anticipated to be made within 30 days following the Proposal Due Date. This is an estimation, but not a commitment by Hawaiian Electric. 12. Notification of Award The award of the EPC Contract, if any, will be announced in writing to the Selected Bidder(s). Hawaiian Electric shall provide written notice to all other Bidders that their offers have not been accepted The selection is provisional until execution of a Contract by Hawaiian Electric and the Selected Bidder. Until such time, Hawaiian Electric may revoke or change its selection for any reason, including but not limited to failure of Hawaiian Electric and the Selected Bidder to agree on final terms for the Contract Hawaiian Electric shall not be required to explain its selection of the Selected Bidder(s) or explain to any Bidder why its Proposal was not selected. Bidders expressly acknowledge that they have no right to a debriefing after award and have no right to appeal or protest an award under this RFP. 13. Questions Regarding the RFP Any questions or communication regarding the RFP must be made in a written format and submitted by June 30, 2014 to the following: Judy Facuri Address: PurchasingED@hawaiianelectric.com Hawaiian Electric shall have the sole option of determining whether a response to a question is necessary or appropriate under the circumstances. Page 13

15 If a question is generally applicable to other Bidders or Proposals and Hawaiian Electric elects to respond to such question, than Hawaiian Electric shall provide the response to all Bidders. Page 14

16 14. Confidentiality of Proposals Bidders shall clearly identify information in their Proposals that they are requesting be treated as confidential and not be disclosed outside of Hawaiian Electric and its employees, consultants and representatives involved with the RFP and its evaluation. Bidders shall describe the basis for such confidentiality designation. Blanket and unsupported confidentiality designations shall not be honored by Hawaiian Electric. Hawaiian Electric shall have the right to disclose Proposals, including all information therein and otherwise submitted as part of the RFP process which is designated as confidential by the Bidder to the Commission and Consumer Advocate and the respective staffs and consultants of the same. As appropriate, Hawaiian Electric will request that any confidential information be submitted to the Commission and/or Consumer Advocate pursuant and subject to a protective order. Hawaiian Electric may also disclose Bidder confidential information to any participate or party to any Commission docket who has agreed in writing to be bound by the terms of a protective order approved and entered by the Commission in such docket. Any statement or condition in any Proposal that attempts to restrict Hawaiian Electric's rights under this section shall be void No Bidder shall be entitled to Proposals from any other Bidder or any other information contained therein or provided by or with respect to any other Bidder, nor shall any Bidder or other person or entity be entitled to any information from Hawaiian Electric pertaining to this RFP or the evaluation of Proposals. 15. Rights Reserved 16. Integration 17. Headings Hawaiian Electric may, at any time, in its sole discretion postpone, withdraw and/or cancel this RFP; alter, extend or cancel any due date; and/or, alter, amend, withdraw and/or cancel any requirement, term or condition of this RFP, any and all of which shall be without any liability to Hawaiian Electric. This RFP, including all documents attached hereto or referenced herein, constitutes the terms of agreement between the parties with respect to this RFP; there are no other applicable terms or conditions not found herein. Page 15

17 The headings utilized in this RFP are for convenience of reference only; they are not substantive and may not be used to interpret the agreement between the parties. 18. Acceptance of RFP Terms and Conditions by Potential Suppliers By retaining this RFP or copies of it, and/or by submitting a Proposal, Bidders agree that they accept and consent to the terms and conditions stated in this RFP. If a Bidder does not accept the foregoing terms and conditions, all originals and copies of the RFP and any portion thereof must be returned to Hawaiian Electric immediately (address provided in section 2.4). Please accompany the returned materials with a statement that you have chosen not to respond to the RFP. Page 16

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