N.M. Admin. Code § 17.7.3.12

Current through Register Vol. 35, No. 17, September 10, 2024

Section 17.7.3.12 - REQUEST FOR PROPOSALS PROCESS

A. Scope and purpose: Unless the commission grants a public utility's variance application pursuant to 17.7.3.17 NMAC for a variance from Section 12 of this rule, the utility shall follow the request for proposals process to ensure cost competitiveness and fairness in procurement by comparing proposals among bidders through a transparently designed and monitored request for proposals.

B. To address the utility's procurement need, if any, as described in the statement of need, and to fulfill the objectives of the utility's action plan, the utility shall issue a request for proposals (RFP) in the current IRP docket, within five months of the commission's acceptance of its statement of need and action plan.

C. Prior to the utility's commencement of an RFP solicitation, the utility shall provide the commission, the IM, and parties to the utility's pending IRP case with the documents and contracts that constitute the RFP solicitation (RFP documents) and a timeline for soliciting, accepting, and evaluating bids.

D. Within 21 days of receipt of the RFP documents, commissioners, commission utility division staff, and intervenors may submit comments to the utility, including on whether its proposed RFP conforms with its accepted statement of need and action plan and is not unduly discriminatory. Comments shall be considered, and may be incorporated, by the utility prior to the issuance of the RFP.

E. The utility may issue the RFP after comments are submitted on the independent monitor's design report pursuant to Subsection I of 17.7.3.14 NMAC. The utility shall file a notice with the commission of any final changes to the RFP design upon issuance.

F. The proposed RFP(s) shall include:

(1) bid evaluation criteria;

(2) the overall amount and duration of power the utility is soliciting and any other details concerning its resource needs;

(3) a request for bidders' reasonable estimates of any new transmission costs and transmission upgrade costs for resources, if known;

(4) the extent and degree to which resources shall be dispatchable, including the requirement, if necessary, that resources be able to operate under automatic dispatch control;

(5) the utility's proposed contract(s) for the acquisition of resources;

(6) proposed contract term lengths;

(7) the applicable discount rate;

(8) the timeline, including the solicitation period, the evaluation period, and the expected selection period;

(9) all security requirements and the rationale behind them; and

(10) any other information necessary to implement a competitive RFP process.

G. For a proposed RFP, each utility shall provide:

(1) a description of information that the utility claims is confidential;

(2) descriptions of proposed protection methods for:

(a) bid prices; and

(b) other bid details.

H. Not later than 120 days after the utility receives bids for its projected needs, the utility shall provide the IM with an evaluation of proposals that meet the above stated criteria, a detailed description of price and non-price criteria, its preferred portfolio of resources, along with a timeline for resource development.

I. The utility shall evaluate bids submitted in response to an RFP using the following price and non-price criteria:

(1) consistency with the terms and requirements of the Efficient Use of Energy Act and the Renewable Energy Act; and other public policies regarding resource preferences adopted by New Mexico or the federal government;

(2) cost of the resource that would be borne by ratepayers, described in terms of the net present value of capacity cost and lifetime cost of energy calculation;

(3) resource effect on system operations and reliability, credit, and financial risks to the utility;

(4) any risks imposed on ratepayers, including assessment of relative amounts of risk inherent among different technologies, fuel sources, or financing arrangements;

(5) environmental impacts including, but not limited to, those associated with resources that emit carbon dioxide or create long-term waste disposal issues;

(6) resource dispatchability and operational flexibility benefits or constraints;

(7) the utility shall include in its evaluation the estimated cost and environmental impact of transmission upgrades or distribution infrastructure upgrades necessary to deliver the project's energy, capacity, or services;

(8) each bidder shall be responsible for all costs associated with interconnecting its project to the transmission grid or, if applicable, to local distribution facilities; and

(9) completeness and credibility of a detailed critical path schedule, and ability to meet scheduled construction start date and commercial operational date, including completing the interconnection process.

J. Additional criteria used by the utility for evaluation may not establish a preference for utility ownership or for projects proposed by a utility-affiliated company. The utility shall not unreasonably discriminate between proposals for a utility-owned or utility affiliate-owned resource and proposals for a resource owned by an independent power producer through a purchased power agreement.

K. The bid evaluation shall ensure that all bids are compared and evaluated on a consistent basis that is competitive, fair, and shall be subject to review by the commission.

L. The utility may issue additional RFPs in the current IRP docket, adhering to the processes and procedures described in 17.7.3.12 NMAC, if prudent following a material event pursuant to Subsection D of 17.7.3.11 NMAC.

M. Nothing in this rule shall be construed to prevent a public utility from procuring resources as required by the REA, Section 62-16-4 NMSA 1978, the EUEA, Section 62-17-5 NMSA 1978, or 17.9.570 NMAC. Such procurements shall be included in the utility's forecasting, statement of need, and action plan.

N.M. Admin. Code § 17.7.3.12

17.7.3.12 NMAC - N, 4-16-07, Amended by New Mexico Register, Volume XXVIII, Issue 16, August 29, 2017, eff. 8/29/2017, Amended by New Mexico Register, Volume XXIX, Issue 02, January 30, 2018, eff. 1/30/2018, Adopted by New Mexico Register, Volume XXXIII, Issue 20, October 25, 2022, eff. 10/27/2022, Amended by New Mexico Register, Volume XXXIII, Issue 22, November 29, 2022, eff. 11/29/2022