# Presentation: 423443

## Procuring Renewable Power

- Setting an Example for the
- Federal Community

## GSA:  Who Are We

- GSA as an agency manages Federal real property/leases and purchases various products and services needed by the Federal Government
- GSA’s Energy Center of Expertise in conjunction with GSA Regional associates provides expertise to GSA and other agencies in the various energy related areas such as energy efficiency, energy tracking, energy procurement, and utility areawide contracts

## Deregulated Electric Market Activities

- GSA’s goal is to be active in procuring deregulated retail power in all deregulated states
- GSA has shopped for retail power in the following areas:  CT, MA, RI, NH, ME, NY, NJ, PA, DE, MD, DC, OH, IL, TX, & CA
- GSA has 16 active power contracts in 9 states and DC
- 11 different contractors
- 793 MW of peak load under contract
- Approx. $194 million/year under contract
- One national contractor – Strategic Energy

## GSA Power Contracts

## GSA Experiences

- Most of the contracted load is in the corridor from Washington, DC to Boston
- 56% of the consumption is in the Washington, DC area
- Approx. 35% of the consumption is for GSA buildings and that represents approx. 46% of GSA’s national electric consumption
- 65% of the contracted load is for other agencies
- Average contract price is $0.0512/kWh
- Avg. contract prices range from 3.97 to 10.8 cents/kWh

## Buying Group Features

- 	When buying for other agencies GSA generally requires an interagency commitment (MOA) to the buy prior to inclusion in the group so that GSA can go quickly to award
- MOAs are subject to certain conditions which are expressed in the solicitation
- Generally group like accounts together for pricing purposes
- Try to minimize cross account subsidization and maximize economies of scale

## Procurement Methods

- GSA has used a lowest priced technically acceptable procurement method to select suppliers (exception DC/MD buy)
- All buys are now two step – meaning that all technical submissions are obtained prior to obtaining price
- GSA obtains pricing in one of two ways:
- Paper Fax (“Old Fashioned Method”)
- Internet Auction Platform

## Pricing Approaches

- All pricing obtained to date has been some form of firm fixed price
- All auction awards have been for a flat $/kWh though index pricing has been requested through the platform
- The “Old Fashioned” pricing is more varied with flat $/kWh pricing; rate schedule like pricing; and fixed percentage discounts off of Standard Offer Rates
- For DC/MD load in future, I foresee some form of rate schedule like pricing (on/off peak w/summer/winter – unsure about demand)

## Timely Award

- Suppliers do not want to sit on their prices due to market volatility
- “Old Fashioned” pricing in by 10 a.m. with award by 4 p.m. the same day
- Internet auction pricing awarded either the same day or by close of business the day following the auction (based on response time needed by customer)

## Renewable Power

- GSA is purchasing renewable power under its power contracts in TX, PA, DC/MD, NY, NJ, and CA
- GSA is buying renewable power for EPA in OH, MA, PA & NY and will soon in DC
- GSA is buying renewable power for DOE, USDA, World Bank, Dept. of Interior, Dept. of Labor and GSA in DC/MD totaling about 4 million kWh/mo
- GSA purchases renewable power for the Park Service’s Statue of Liberty and Ellis Island in NJ and for the Liberty Bell in Philadelphia
- GSA anticipates significant purchases of renewable power by both GSA and other Federal agencies in the next few years

## How was the Procurement Implemented

- GSA obtained kWh data for scores of Federal and non Federal electric accounts.
- Statement of Work was prepared which included different percentages of green power and blends from different sources.
- Reverse Auctions were performed by the team of Science Applications International Corporation (SAIC) and World Energy Solutions.

## How was the Procurement Implemented (Continued)

**Some of the green power awards in Region 2 have been made through the paper procurement process; a majority through the SAIC / World Energy  Auction Platform****.  **
- GSA has awarded over $278M in electricity contracts in two states (NJ / NY) and six utilities (Con Edison ; Central Hudson; Niagara Mohawk; Orange and Rockland; NYSEG, and PSE&G) through the platform
**230M kWh of green power (wind and renewable) awarded through the platform in Region 2 over the past year**
- Auctions allow GSA to request and compare generic and green power prices and terms for the same facilities on the same day, easily calculate the green power premium (if any), and ensure that awards are made based on robust competition and real-time information.

## How was the Procurement Implemented (Continued)

- Energy Service Companies which submitted the lowest fixed price per kWh for green and non green power were awarded contracts by GSA. (Constellation New Energy, Con Edison Solutions, First Energy, and Pepco).

## What did GSA Buy in R-2?

- 92 million kWh of green power for the United Nations, American Red Cross, Coast Guard, National Park Service, Social Security Administration, and GSA.
- Different contract terms for different escos.
- Premiums for green power varied based on blends, zones and percentages.

## Attestation of Green Power Attributes

- Green-e Certification Program Center for Resource Solutions in CA.
- New York State Public Service Commission Orders such as Case 94-E0952.
- Semi Annual Reports from escos. Environmental Labels from the NYSPSC and NJ Board of Public Utilities

## Environmental Benefits

- Decrease in the release of Sulfur Dioxide of 241,000 lbs per year; decrease in release of Nitrogen Oxides of 44,915 lbs per year; decrease in Carbon Dioxide of 64,599,974 lbs per year.

## Is Procurement Transferable?

- GSA has the expertise to:
- Perform research on feasibility of buying green power.
- Prepare RFP and Statement of Work
- Evaluate bids for technical and financial soundness; Award and monitor contract

## Point of Contact

- For additional information contact:
- Brian K. Magden
- Regional Energy Coordinator
- General Services Administration(R-2)
- Phone: (212) 264-0591  Fax (212) 264-2746
- E:MAIL brian.magden@gsa.gov

## Conclusion

- In select markets, electricity is becoming a commodity at both the wholesale and retail level
- Power markets are still immature and the post-ENRON fallout has slowed market development
- Natural gas is driving electric pricing and increasing off peak power prices and volatility
- Renewable power is poised to take off
- Price risk management will be a growing concern
- Sharp divide regulated/deregulated states