Earlier today, the Connecticut Department of Energy & Environmental Protection (“DEEP”) issued an RFP for up to 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. Responses to the RFP will be evaluated by various state agencies and the electric distribution companies (“EDCs”), with the ultimate selection to be made by the Commissioner of DEEP.
Once selected, bidders will negotiate separate conforming Power Purchase Agreements (“PPAs”) with both EDCs. Any contracts resulting from the RFP process are subject to approval by the Connecticut Public Utilities Regulatory Authority.
Connecticut, Rhode Island, and Massachusetts recently signed a Memorandum of Understanding (“MOU”) to create a pathway for potential multi-state offshore wind procurements, a first in the United States. This is the first RFP of this type issued by Connecticut following the execution of the MOU, and due dates associated with the Connecticut RFP align closely with due dates for the Massachusetts 83C IV solicitation and a Rhode Island solicitation announced just last week. Responses to all three solicitations are due to the respective states by January 31, 2024.
Multi-State Bids Allowed
Much like the recent Rhode Island RFP, the Connecticut RFP allows for the consideration of multi-state bid proposals. Multi-state proposals from bidders may be made contingent upon being selected by multiple states, and 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.
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 Connecticut RFP requires bidders to propose a fixed price for energy and RECs. Bidders may also submit up to two alternative Indexed Price Bids subject to a one-time Indexing Adjustment. If bidders opt to propose an Indexed Price Bid, they must also propose “at least one price that is not an Indexed Bid Price but is the same in all other respects” to the Indexed Price Bid. The one-time Indexing Adjustment allows the Indexed Price Bid to increase or decrease by up to 15% based on a composite set of indices. This adjustment mechanism is very similar in design to those included in recent solicitations by Rhode Island, Massachusetts, and New York.
Bid Evaluation Criteria
The Connecticut RFP establishes a two-stage evaluation and selection process that operates similarly to processes proscribed in various east coast states’ solicitations.
In stage one, bids are evaluated based on certain eligibility and threshold requirements.
In stage two, bids are scored using a 100-point scale, with up to 75 points available for quantitative factors and up to 25 points available based on qualitative factors. Quantitative factors include the economic competitiveness of the proposal, price, and indirect economic benefits. Qualitative factors include consistency with state policy goals, meaningful public participation and environmental justice practices, plans for the use of skilled labor, and plans to address and minimize potential impacts to wildlife, natural resources, and existing water-dependent uses.
We’ll continue to monitor pending solicitations and prospects for multi-state developments.