Wind Energy RFP Final - 2002-12-18

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					      We Energies

    Renewable Energy
   Request for Proposal
2003-2004 WIND ENERGY




     December 18, 2002
We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

                                          TABLE OF CONTENTS

I.     Introduction ............................................................................................1
       A.   Purpose ..........................................................................................................................1
       B.   Background....................................................................................................................1
       C.   Location Preferences ....................................................................................................1
       D.   Reservation of Rights ...................................................................................................1
       E.   Confidentiality................................................................................................................2

II.    Summary of Key Activities .....................................................................2
       A. Process Schedule ...........................................................................................................2
       B. Submittals, Inquiries and Other Communications .......................................................2
       C. Proposal Submittal.........................................................................................................3

III.   General Information...............................................................................3
       A. General Requirements ..................................................................................................3
       B. Power Purchase Agreement ..........................................................................................4
       C. Regulatory Compliance and Environmental Requirements ........................................4

IV.    Proposal Format and Content................................................................4
       A. Format............................................................................................................................4
       B. Content...........................................................................................................................5

V.     Evaluation Process .................................................................................9

Appendices
       Acronyms Used in This Document ...................................................................................10
       Exhibit 1 - Project Technical Description.........................................................................11
       Exhibit 2 - Proposer Qualification ....................................................................................12
       Exhibit 3 - Financial Information......................................................................................13
       Exhibit 4 - Energy Delivery and Pricing...........................................................................14
       Exhibit 5 - Regulatory and Environmental Compliance ..................................................15
We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

I. Introduction

A. Purpose

We Energies requests proposals for up to 200 megawatts of wind generation. Contracts
resulting from proposals will be for a term of twenty (20) years and for a minimum of 20
megawatts. Projects must be in-service by no later than 12/31/04.

While We Energies is primarily interested in initiating the development of additional wind
resources, bids from wind facilities under construction or already in the planning stages will
also be considered. Successful proposals will be cost effective and will minimize transmission
and/or distribution system impacts.

Proposals received by 02/28/03 will be evaluated for the short list of qualified projects
selected for in-depth evaluation. We Energies acknowledges that many different types and
forms of contractual agreements can be structured to meet this Request For Proposal (RFP)
and welcomes bidder creativity and flexibility.

B. Background

We Energies is the principal subsidiary of Wisconsin Energy Corporation and provides electricity,
natural gas and/or steam service to about 2.3 million people in southeastern Wisconsin including the
Milwaukee area, the Appleton area, the Prairie du Chien area, and in northeastern Wisconsin and
Michigan’s Upper Peninsula. We Energies and its predecessors have been supplying electricity for over
a century. We Energies’ peak electric demand is about 6,200 MW. We Energies is connected to the
American Transmission Company (ATC), and through the ATC receives transmission services from the
Midwest Independent Transmission System Operator (MISO).

C. Location Preferences

Strong preference will be given to projects that are within the We Energies’ service territory or that are
within the state of Wisconsin. While We Energies will consider all viable proposals including off-shore
wind projects, location preferences are in the following order: within We Energies’ service territory in
Wisconsin, within the ATC’s service territory in Wisconsin, elsewhere within the state of Wisconsin,
outside of Wisconsin but within the MISO service territory.

D. Reservation of Rights

We Energies reserves the right, without qualification and in its sole discretion, to reject any and/or all
Proposals or to waive any informality, technicality or deficiency in Proposals received. We Energies
reserves the right to consider alternatives outside of this solicitation, in its sole discretion, to satisfy its



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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

capacity and energy needs. In addition, We Energies reserves the right, in its sole discretion, to modify
or waive any of the criteria contained herein and/or the process described herein. Those who submit
Proposals agree to do so without recourse against We Energies for either rejection or failure to execute
a Purchase Power Agreement (PPA) for any reason.

E. Confidentiality

We Energies recognizes that certain information contained in proposals submitted may be confidential
and may represent a competitive or business strategy. The proposer is responsible for identifying those
portions of their proposal which they consider confidential and their reasons. Proposals in their entirety
may be shared with the Public Service Commission of Wisconsin, the Public Service Commission of
Michigan, or any other governmental entity that has regulatory authority over We Energies.

II Summary of Key Activities

A. Process Schedule

Responses to this RFP must be received by We Energies no later than 4 PM, Central Standard Time on
February 28, 2003, at the address listed below.

Upon completion of the review process, We Energies will inform proposers of the status of their
proposal and will undertake further discussion with “shortlist” parties, which may ultimately result in
successful PPA negotiations.

B. Submittals, Inquiries and Other Communication

FIVE copies of the proposal should be sent to the following address:

                We Energies
                Attention: Mr. Philip M. Theisen
                PO Box 2046
                333 W. Everett St.
                Milwaukee, WI 53203

All other submittals, inquiries and communications relating to any aspect of the RFP should be directed
to Philip Theisen, project coordinator, at the address listed above or one of the following locations:

                RFP Voice Mail                            (414) 221-2473
                RFP Fax                                   (414) 221-2350
                RFP E-Mail Address                        phil.theisen@we-energies.com




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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

Information related to this RFP and the service territories of We Energies, ATC and MISO can be
found at the following websites:

        http://www.we-energies.com/windrfp.htm

        http://www.wisconsinenergy.com/businesses/wec_servicearea.htm

        http://www.atcllc.com/about.shtml

        http://midwestiso.org/about_signatories.shtml

Proposers may download an electronic copy of the RFP from the website. This can be done to best
conform to proposal formatting requirements.

C. Proposal Submittal

To ensure consideration, proposals should conform to the format described in Section IV of this RFP.

All costs of Proposal development are to be borne by the proposer. We Energies will not reimburse
any proposer for costs incurred in responding to this RFP or for the costs incurred during any
subsequent negotiations.

III. General Information

A. General Requirements

We Energies is requesting proposals for projects between 20 and 200 megawatts of nameplate capacity
of wind generation. Multiple projects of 20 megawatts or larger submitted by one or more suppliers
may be aggregated to achieve the 200 megawatts of supply. We Energies shall have the right to all
energy associated with any Project. Please be aware that We Energies will receive any and all current
and/or future renewable energy certificates and emissions credits associated with the energy from a
project, and the pricing is required to reflect that.

All suppliers should deliver the energy to the MISO transmission system or We Energies’ distribution
system.

The wind facility developer will be responsible for all costs to interconnect with the transmission system,
including the cost of any distribution system upgrades in the event the facility connects to the grid at sub-
transmission voltages.


B. Power Purchase Agreement

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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY


We Energies expects to enter into one or more PPA(s) with the selected supplier(s). The preferred
term of each agreement will be 20 years, and will include pricing commitments in year of occurrence
U.S. dollars. If a proposer wishes to enter into an agreement with different terms and conditions, an
alternative proposal can be submitted for consideration and must be clearly labeled as an alternative
proposal.

The PPA(s) shall include provisions that:

        •   Require the supplier to comply with all applicable laws, rules and regulations that are in, or
            may come into, effect during the term of the contract.

        •   Prohibit the supplier from assigning the agreement without the prior consent of We Energies.

C. Regulatory Compliance and Environmental Requirements

Suppliers are responsible for acquiring and maintaining all present and future federal, state, and local
approvals, licenses, permits or variances, and the specific requirements or potential requirements
necessary to construct and/or operate any facilities to generate and/or deliver energy to We Energies.

We Energies will only consider suppliers who demonstrate that their facilities are sited in an
environmentally responsible and compliant manner and in compliance with applicable local, state, and
federal laws and regulations.

IV. Proposal Format and Content

A. Format

For ease of review and evaluation, all proposals should be prepared in accordance with the following
format. We Energies reserves the right to disregard Proposals which do not comply with this
instruction.


The proposal should be organized by Sections and Exhibits in the order described below. Pages are
limited to 8 1/2” x 11” with one (1) inch margins on the top, bottom and sides. The text is to be typed
or written neatly in black ink. Typed text should be no smaller than 12-point font.

Each page of the proposal should have the following information in the top right corner:


        We Energies - Wind Energy Proposal
        Bidder: ________________


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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

        Project: ________________
        Page # of #

Each exhibit included with the proposal should have the following information in the top right corner.

        We Energies - Wind Energy Proposal, Exhibit #
        Bidder: ________________
        Project: ________________
        Page # of #

B. Content

Each proposal shall contain the following sections and the contents as described below. If the proposal
includes generation located at multiple sites, then each location should be described as a separate
project. Some of this information must also be included in Exhibits 1 through 5 to be placed at the end
of the proposal.

        Section 1 - Executive Summary

        The Executive Summary section should provide an overall description of the proposal, including
        key features. It should include a general description of the location, business arrangement and
        financing of the proposal. If the proposal includes multiple locations, or substantially different
        wind turbines, each should be described as a separate Project.

        Section 2 - Project Description

        This section should include a detailed description of the project, including:

                •   Generation equipment description,
                •   Location of project and site description,
                •   Energy analysis, and
                •   Local community siting issues.

        Generation Equipment Description: Describe the proposed wind generation equipment and
        how it will be operated and maintained. The information should include the manufacturer and
        model of the turbines, the tower height, and any other relevant equipment information.

        Location of Project and Site Description: Provide details on where the project will be
        located. For evaluation purposes, strong preference will be given to projects that are within the
        We Energies’ service territory or that are within the state of Wisconsin. While We Energies will
        consider all viable proposals, locations preferences are in the following order:




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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

              1.   Within We Energies’ service territory in Wisconsin,
              2.   Within the ATC’s service territory in Wisconsin,
              3.   Elsewhere within the state of Wisconsin, and
              4.   Outside of Wisconsin but within the MISO service territory.

      If a question exists regarding the location of a proposed facility, please contact We Energies as
      described in Section II of this RFP.

      Energy Analysis: Based upon site specific wind speed data and equipment performance
      specifications, include an initial study of the energy production from the facility covering the
      bulleted items below. The basis for the energy production projections should be included.

              •    A calculation of gross monthly and annual energy production using the wind
                   frequency distribution and the turbine power curve;
              •    A calculation of energy losses. All sources of losses considered should be listed and
                   individually quantified with a basis for the quantification provided;
              •    A calculation of projected net energy output on a monthly basis; and
              •    A guaranteed monthly net megawatt hour energy production.

      Local Community Siting Issues: The proposer should give a brief description of, and any
      plans for assessing, local community siting issues. If there have been any efforts to address any
      of these issues, please describe them.

      Section 3 - Proposer’s Qualifications

      This section should include, but not be limited to, the following information:

              •    Corporate/business structure, including primary and secondary businesses;
              •    Proposer’s projects and independent power supply ventures participated in over
                   the last ten years;
              •    At least one contact (name and phone number) for each power supply venture (for
                   reference purposes);
              •    Description of any past, current or proposed litigation concerning power supply
                   agreements; your proposed energy supply facility; and/or your ability to supply
                   power under our proposed PPA; and
              •    Separate descriptions, as appropriate, for each member if there is a consortium or
                   partnership of two or more firms and the relationship between the entities for this
                   Proposal.

      Section 4 - Financial Considerations




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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

      The financial viability of any Proposal should be demonstrated to provide assurance that the
      proposer, as well as any firm(s) involved in the Proposal, has adequate financial strength.
      Financial strength is an indicator of the likelihood that the proposer is able to carry out the
      responsibilities of a supplier and that the energy will be available as projected. Each proposal
      must include the following financial information for each proposer/entity involved in the Proposal:

              •   Current annual report for each party (If an annual report is not available, a listing of
                  assets, liabilities and cash flow must be provided);
              •   Current (within past three months) profit and loss statement for each party; and
              •   Description of project financing.

      Section 5 - Power Supply Contract Duration, Pricing and Timing

      This section should detail the Proposal’s pricing and timing:

              •   Price for delivered energy;
              •   Date the facility will come on-line;
              •   Anticipated amount of energy capable of being delivered to We Energies annually;
              •   Anticipated amount of energy to be delivered by month; and
              •   Anticipated guaranteed minimum energy production.

      Price for Energy: We Energies encourages creative pricing proposals. We Energies’
      customers enjoy some of the lowest rates in the nation, and all proposals will be evaluated from
      the perspective of these low prices. Prices should be stated in year of occurrence U.S. dollars.
      Pricing should be based upon proposer's receipt of all applicable federal and state tax credits
      that apply to the renewable energy generation source. Please be aware that We Energies will
      receive any and all current and/or future renewable energy certificates and emissions credits
      associated with the energy from a project, and the pricing is required to reflect that.

      Duration of Energy Supply Offer: We Energies is seeking the ability to draw upon wind
      energy resources for a contract term of twenty years. If a proposer requires a different length
      contract, that should be presented as an alternative Proposal.

      Timing of Energy Availability: We Energies is seeking resources to come on-line in calendar
      years 2003 or 2004. Projects that can meet this time requirement will be given preference in
      the evaluation process. Projects that cannot meet the deadline may be considered separately on
      a case by case basis.

      Section 6 - Transmission Plans

      The Proposal should include a description of the means of delivering the energy to the
      transmission system, including any distribution system related issues, if applicable. This should



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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

      include the location, route and voltage level of the transmission and/or distribution facilities. If
      the project is connected to a transmission system that is not operated by the MISO or to a
      distribution system that is not connected to the MISO, describe how the energy will be
      delivered to the MISO.

      The proposer is responsible for all costs involved in interconnecting with the local utility or
      transmission system, and transmitting the energy to MISO, or to such point where energy can
      be delivered to We Energies via We Energies’ network transmission service with the MISO. In
      the event there are any transmission studies required, either to interconnect the facility to the
      electrical grid, or to transmit the energy from the facility to We Energies, the proposer will be
      responsible for those costs. Please outline the results of any contacts to date with the local
      utility or transmission provider concerning interconnection issues.

      Section 7 - Regulatory and Environmental Compliance

      The proposer is exclusively and entirely responsible for meeting and satisfying all federal, state
      and local permits, licenses, approvals and/or variances that are currently, or become in the
      future, required for the operation of the project and the delivery of energy in accordance with
      the PPA.

      The proposer’s facility operation records should be available for periodic inspection by We
      Energies representatives or an agent of We Energies for purposes of auditing environmental
      compliance, impact and safety. These records shall remain available throughout the term of the
      PPA and for five years thereafter.

      Section 8 - Other Information

      This section provides the opportunity to describe other aspects of the proposal that may not fit
      into one of the above categories. This might include alternative approaches to providing
      renewable energy benefits.

      Section 9 - Exhibits

      Proposals will include the following exhibits:

              Exhibit 1 - Project Technical Description
                      • If the proposal covers generation facilities located at multiple sites, a
                           separate exhibit is needed for each site.
                      • If the proposal covers multiple types of wind turbines at a site, a separate
                           exhibit is needed for each type of turbine.
              Exhibit 2 - Proposer Qualifications




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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY

                        •    If multiple companies or organizations are involved in the proposal, a
                             separate exhibit must be filled out for each company and organization.
                Exhibit 3 - Proposer Financial Information
                        • A separate exhibit is required for each company or organization involved in
                             the proposal.
                Exhibit 4 - Energy Delivery and Pricing
                        • A separate exhibit is required for each project in this proposal,
                             corresponding to the projects listed in Exhibit 2.
                Exhibit 5 - Compliance Certification
                        • A separate exhibit is required for each project in this proposal.

V. Evaluation Process

We Energies will assess all proposals to determine which, in We Energies’ sole opinion, are the most
economical, feasible and viable options for meeting We Energies’ generation diversity and system
needs. The assessment will take into account both price and non-price factors. Upon completion of
this assessment, We Energies will create a short list of qualified projects. We Energies will provide this
group of respondents with a model PPA for discussion purposes and initiate preliminary contract
discussions.

Proposers who enter into preliminary discussions with We Energies will be required to demonstrate the
following:

•   Site Control: The proposer must demonstrate site control, by showing evidence of either site
    ownership, an option to purchase the site or an option for a long term lease.

•   Local Community Acceptance: The proposer must present a plan for determining local
    community reaction to the project, and develop an action plan for working with the local community
    on project issues. The study should included the following elements:

        •   A list of the references used to assess the community reaction, and the methodology used to
            draw study conclusions;
        •   A list of key local contacts interviewed and their opinions;
        •   An assessment of the local community reaction;
        •   An action plan for working with the local community to successfully complete the project;
            and
        •   A description of their process for conflict resolution.

The commencement of negotiations between any potential supplier and We Energies does not create or
imply any commitment by We Energies to enter into an agreement with that supplier.




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We Energies Renewable Energy Request for Proposal
2004-2005 WIND ENERGY




                        Acronyms Used in This Document


      MWh           Megawatt-hour
      MAIN          Mid-America Interconnected Network
      MW            Megawatt
      PPA           Power Purchase Agreement
      RFP           Request For Proposal
      ATC           American Transmission Company
      MISO          Midwest Independent System Operator




                    [Remainder of this page intentionally left blank]




                                                                    Page 10 of 15
                                                                          We Energies-Renewable Energy Proposal,
Exhibit 1
                                                                          Bidder:
                                                                          Project:



                         EXHIBIT 1 - Project Technical Description
GENERATION
Wind Turbine location (complete physical address):
                                                      _______
                                                      _______
Manufacturer of turbine: ______                                                                          ______
Name plate capacity of project in megawatts (MW):             _________________
Tower Height:                                 If a contract were signed in June, 2003, what would be the
anticipated in-service date of the project:
______________________________________________________________________________
______________________________________________________________________________
____________


TRANSMISSION
Route by which energy will be transmitted to We Energies if your facility is not connected directly to We
Energies’ distribution system or to a transmission system operated by MISO (include name of each
transmission provider, a contact name and phone number):

            Owner / Operator                                  Contact                           Phone Number




                                                                                                Page 11 of 15
                                                                      We Energies-Renewable Energy Proposal,
Exhibit 3
                                                                      Bidder:
                                                                      Project:


                              EXHIBIT 2 - Proposer Qualifications

Organization name:
Type of firm (circle one): Corporation, Sole Proprietor, Partnership, Other (Describe below)


       If incorporated, State of incorporation:                     Date of incorporation:


Address for mail delivery:                                Address for courier delivery:




Primary and Secondary Contacts:
Name:                                                     Name:
Title:                                                    Title:
Phone:                                                    Phone:
Fax:                                                      Fax:


For each current and/or former energy sales contract relationships, provide the following
information. Customer information pertains to the purchaser of your energy. Attach additional
sheets if necessary.

Name:                                             Contract Start:
Address:                                          Contract End:
                                                  Capacity (MW):
                                                  Annual Energy (MWh):


Contact: _______________            ______
Phone number:




                                                                                             Page 12 of 15
                                                                   We Energies-Renewable Energy Proposal,
Exhibit 3
                                                                   Bidder:
                                                                   Project:


                          EXHIBIT 3 - Financial Information
Describe how you will finance your portion of the Project:




Are there any past, current, threatened or proposed lawsuits related to your renewable energy
resources, your facilities or your ability to deliver power under the PPA?
If yes, please explain:




Has your company/organization or any of the principals ever declared bankruptcy?


If yes, please explain:




Please provide credit references:
Institution:                                        Institution:
Address:                                            Address:
Contact:                                            Contact:
Phone Number:                                       Phone Number:


Institution:                                        Institution:
Address:                                            Address:
Contact:                                            Contact:
Phone Number:                                       Phone Number:




                                                                                         Page 13 of 15
                                                                  We Energies-Renewable Energy Proposal,
Exhibit 3
                                                                  Bidder:
                                                                  Project:

Provide a copy of your most recent annual report (if unavailable, please provide a current listing
of assets, liabilities and cash flow) and a current profit and loss statement that is closely related
to the operations of your renewable energy facility(s)
                                                  .




                                                                                        Page 14 of 15
                                                                 We Energies-Renewable Energy Proposal,
Exhibit 5
                                                                 Bidder:
                                                                 Project:



                         EXHIBIT 4 - Energy Delivery and Pricing
Generator location (complete physical address):



Anticipated on-line date: _____________
Installed Capacity: _______________
Planned Outages Per Year Per Turbine:________ (hours / year)


In the columns below, please summarize monthly energy production and energy prices in year of
occurrence dollars. Minimum energy production values should be shown as the minimum annual
megawatt hours of energy production that the developer will guarantee.

            Monthly Energy Delivery                    Prices in Year of Occurrence Dollars
                  Projected    Guaranteed
                   (MWh)         (MWh)                       $/MWh                      $/MWh
January          _________     _________            2004 ________             2015 ________
February         _________     _________            2005 ________             2016 ________
March            _________     _________            2006 ________             2017 ________
April            _________     _________            2007 ________             2018 ________
May              _________     _________            2008 ________             2019 ________
June             _________     _________            2009 ________             2020 ________
July             _________     _________            2010 ________             2021 ________
August           _________     _________            2011 ________             2022 ________
September        _________     _________            2012 ________             2023 ________
October          _________     _________            2013 ________             2024 ________
November         _________     _________            2014 ________             2025 ________
December         _________     _________
Annual           _________




                                                                                       Page 15 of 15
                                                                      We Energies-Renewable Energy Proposal,
Exhibit 5
                                                                      Bidder:
                                                                      Project:



             EXHIBIT 5 - Regulatory and Environmental Compliance

Please indicate what permits, certificate or studies may be required for your project, and the status in
your attempts to acquire them:




Please explain the local community issues that may affect your project, siting concerns, and any activities
you’ve taken to date to manage these issues. Please describe the method by which you will manage
local community communications and concerns through project completion, and during the 20 year
contract period:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________



                                                                                            Page 16 of 15
                                                   We Energies-Renewable Energy Proposal,
Exhibit 5
                                                   Bidder:
                                                   Project:



______________________________________________________________________________
______________________________________________________________________________




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