Rhode Island Energy recently issued an Request for Proposals (RFP) for up to 1.2 GW of offshore wind. The RFP solicits bids to enter into long-term power purchase agreements for energy, renewable energy certificates (RECs), and related environmental attributes. Rhode Island Energy, in consultation with the state’s Office of Energy Resources and Division of Public Utilities and Carrier, will evaluate and select bids and any resulting contracts will be subject to approval by the Rhode Island Public Utilities Commission.
A week prior to publishing the RFP, Rhode Island signed a Memorandum of Understanding (MOU) with Connecticut and Massachusetts to create a pathway for potential multi-state offshore wind procurements, a first in the United States. Multi-state offshore wind procurements could provide for greater economies of scale, offer advantages for regional supply chain development, and overall ensure greater viability of offshore wind projects. This Rhode Island RFP represents the first RFP issued by any of the three states since the MOU was executed, and the Rhode Island RFP expressly allows bidders to submit multi-state proposals.
Bids in response to the Rhode Island RFP are due on January 31, 2024, aligned with the due date for the Massachusetts 83C IV solicitation and the due date contemplated by Connecticut’s draft request for proposals issued in July.
This post provides a brief overview of the Rhode Island RFP with respect to multi-state bid mechanics, pricing structures, and evaluation criteria.
Multi-State Bids Allowed
The MOU provides that each state will consider participating and coordinating with other parties in their solicitations if such coordination would “result in a positive or neutral impact” on the state’s ratepayers and provides other benefits. The Rhode Island RFP mirrors this language.
Both the MOU and the Rhode Island RFP provide that multi-state proposals from bidders may be made contingent upon being selected by multiple states, and that, if selected, the parties may agree to share energy and RECs generated by a multi-state development in proportion to the states’ respective load share. Bidders of multi-state proposals must offer the same pricing to each party to the MOU, though bidders will be required to separately negotiate PPAs with applicable entities in the various states.
With respect to economic development and related benefits, the MOU provides that if benefits cannot be separated and allocated among the states, benefits will be allocated in the manner proposed in the multi-state bid.
Allowable Pricing Structures
The Rhode Island RFP requires that bidders provide fixed pricing for energy and RECs and may optionally select between two alternative pricing forms: fixed escalator pricing or a one-time inflationary adjustment. The fixed escalator pricing allows the bidder to offer an initial price and propose a fixed rate for that price to change over time, capped at a maximum of 3% per year. The inflationary adjustment mechanism provides a one-time adjustment to the price of energy and RECs at certain milestones, with increases capped at 16%.
Bid Evaluation Criteria
The RFP establishes a three-stage evaluation and selection process that largely mirrors Rhode Island’s 2022 offshore wind solicitation as well as other recent solicitations in East Coast states:
- In stage one, bids are evaluated based on eligibility and threshold requirements.
- In stage two, bids are assessed using both a price and non-price quantitative evaluation; non-price factors considered include site status, status of permits and approvals, credibility with respect to interconnection and transmission, progress made toward certain identified milestones, and economic benefits to the state.
- In stage three, bids will be evaluated based on factors such as commercial reasonableness, project viability, additional economic and environmental benefits, and potential portfolio effects associated with any combination of bids.
We’ll continue to monitor pending solicitations and prospects for multi-state developments.
