Unclassified1 Competitive Acquisition of Renewable Energy & Renewable Energy Certificates Andrea L. Kincaid, Contracting Officer Electricity & Renewables Defense Energy Support Center

Unclassified2 EPAct 05 Requirements Section 203. Federal Purchase Requirements –Renewable Energy Goals Not less than 3% FY07-FY09 Not less than 5% FY10-FY12 Not less than 7.5% FY13- –Acceptable Resources Solar, Wind, Biomass, Landfill Gas, geothermal, municipal solid waste, new hydroelectric generation

Unclassified3 EPAct 05 Ability to double count RECs associated with- –Generation on Federal Installations –On Indian Lands –On other Federal Land However – must be generated and used Policy/Guidelines still being developed

Unclassified4 Electricity Restructuring Status Open to competition, competitive contracts awarded Open for competition, no competitive awards Competitive contracts no allowed

Unclassified5 Renewable Power Policy originally provided in Executive Order and EPAct 05 – Solar – Wind – Geothermal – Biomass – Tidal, thermal, landfill gas, waste-to-energy, others Additional Input – National Energy Policy – Agency Policy

Unclassified6 What are the Goals? EO dated Jan 24, 2007 – 50% of purchased renewables from resources operational after Jan 1, 1999 EPAct05 – Not less than 3% FY07-FY09 – Not less than 5% FY10-FY12 – Not less than 7.5% FY13-? To the extent economically feasible and technically practicable

Unclassified7 Facilitated Projects We see as the wave of the future – Build the most feasible projects on-site Energy security The real green power (not a REC, not rebundled) – Significant up front costs – RECs count twice

Unclassified8 Utility Green Power Options Do they exist? Yes but… – Not well publicized – Cost has been a factor Always a premium ($) Not much room to negotiate price – Must take or leave what is offered Fewer source options

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10 Competitive Green Power Purchases Only in deregulated states Request for Proposal (RFP) for electrons including a % green – More costly than electrons + RECs Usually different suppliers – Often reduces the number of offerors – Easier for many customers to justify – Potential for long term contracts Price justification can be an issue

Unclassified11 REC Diagram RECs/Green Tags: Renewable Energy Generation Electricity Environmental Attributes Renewable Power REC

Unclassified12 REC Diagram Conventional Power Green Power Power Grid Electricity Supplier REC Supplier Electricity Consumer Power REC $ Power REC $ $

Unclassified13 Renewable Energy Procurement Approaches Renewable Energy Certificates – Pros RECs currently the least costly alternative Ability to purchase nationwide – Cons Not viewed as a long term solution Not without issues – Not everyone agrees with purchasing – Green Power Partnership conflicts – RPS driving price up, availability decreasing – Never mentioned in EPAct05

Unclassified14 Renewables Portfolio Standards State Goal ☼ PA: 18%¹ by 2020 ☼ NJ: 22.5% by 2021 CT: 10% by 2010 MA: 4% by % annual increase WI: requirement varies by utility; 10% by 2015 goal IA: 105 MW MN: 25% by 2025; (Xcel: 30% by 2020) TX: 5,880 MW by 2015 *NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) ☼ AZ: 15% by 2025 CA: 20% by 2010 ☼ NV: 20% by 2015 ME: 30% by 2000; 10% by 2017 goal - new RE State RPS *MD: 7.5% by 2019 ☼ Minimum solar or customer-sited requirement * Increased credit for solar or customer-sited ¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource HI: 20% by 2020 RI: 15% by 2020 ☼ CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis ) ☼ DC: 11% by 2022 ☼ NY: 24% by 2013 MT: 15% by 2015 *DE: 10% by 2019 IL: 8% by 2013 VT: RE meets load growth by 2012 Solar water heating (SWH) eligible *WA: 15% by 2020 DSIRE: March 2007

Unclassified15 Recent REC Purchases DoE Paducah Lab – awarded Sep 06 – GPP requested – 72,000 MWh – 2 year – awarded $1.29/MWh –wind/biomass/geothermal blend NASA (KSC)/IHS – awarded Apr 07 – GPP requested – one time delivery NLT 1 May 07 – 8,953 MWh awarded at $2.30/MWh – Biomass (LFG)

Unclassified16 Recent REC Purchases BOPD – awarded Aug 06 – GPP requested – 12,000 MWh – 4 year – awarded $1.73/MWh – biomass Commerce – Awarded 12 Sep 06 – no special requirements – one time delivery NLT 30 Sep 06 Municipal Solid Waste – 100,000 MWh awarded at $0.30/MWh

Unclassified17 Recent REC Purchases EPA various – to finish off 100% renewable for EPA Labs – “NEW” March 1, 2006 – delivery Sep 06 – Sep 07 – 110,000 MWh – Wind $1.50/MWh Interior/Agri./DHS – Renewable resource commenced operation after January 1, 1991 – Delivery date(s) Agri.- 30 Sep 06, 01 Dec 06, 31 Jul 07 Interior/DHS – NLT 30 Sep ,900 MWh – Wind and Biomass $0.32/MWh

Unclassified18 Points of Contact John Nelson Division Chief, Electricity & Coal PH: (703) John Nelson Division Chief, Electricity & Coal PH: (703) Leslie Simpson Contract Specialist Electricity and Renewables PH: (703) Leslie Simpson Contract Specialist Electricity and Renewables PH: (703) Andrea Kincaid Contracting Officer Electricity and Renewables PH: (703) Andrea Kincaid Contracting Officer Electricity and Renewables PH: (703)