Request For Proposals
For Firm Full Requirements Natural Gas Supply and Related Services

                                       Issued by
                                PowerOptions, Inc.

                                   December 1, 2009

PowerOptions, Inc. (“PowerOptions”) is soliciting proposals to provide natural gas
supply and related services for a purchasing group of 503 nonprofit and government
institutions in Massachusetts. About 350 of these institutions are currently purchasing
their firm, full requirements gas supply through PowerOptions-facilitated contracts.

The deadline for submitting proposals is 2:00 p.m., January 7, 2010. Proposals must
follow the specifications described herein.

Seven (7) copies of the proposals must be submitted to and received by:

      Don Carroll
      Director of Programs
      99 Summer Street - Suite 1040
      Boston, MA 02110

Any questions concerning the RFP should be sent by email to Don Carroll.

                                TABLE OF CONTENTS

I. Description of the PowerOptions® Consortium, Scope of this RFP
II. Proposal Contents and Evaluation of Proposals
III. Procurement Schedule, Process, and Forms

Appendix A - Form of Participant Agreement
Appendix B - Form of Program Agreement
I.      Description of the PowerOptions Consortium, Scope of this RFP

PowerOptions® is the registered name of the Massachusetts Non-Profit Energy
Purchasers Consortium (the “Consortium”) and its group purchasing programs. The
Consortium was organized in 1996 by the Massachusetts Health and Educational
Facilities Authority (“HEFA”) and is operated by its private non-profit subsidiary,
PowerOptions, Inc. PowerOptions has facilitated electric and gas supply arrangements
on behalf of the Consortium and negotiated a number of electric and gas supply
programs and contracts since 1997 with several electricity and gas suppliers.

Membership:               Currently more than 500 non-profit and government institutions
                          (“Members”) belong to the PowerOptions ® consortium, with about
                          350 of them participating in the natural gas supply program in 2009.

Current program: PowerOptions is one of the largest energy buying consortia in New
                 England. An estimated annual 11 million decatherms of natural gas
                 was purchased through Consortium-sponsored contracts in 2009.
                 Summarized actual annual usage data for these contracts for 2004-
                 2009 and detailed data by LDC and pipeline for the twelve months
                 ending October 2009 are below in Tables 1 and 2.1

Scope of this RFP: Gas contracts under the current program terminate on or before the
                   November 2011.meter readings. The successor arrangement is
                   the subject of this RFP. PowerOptions is soliciting proposals for full
                   firm natural gas supply for three or four years, for delivery to begin
                   no earlier than November 2011. PowerOptions intends to select
                   and recommend to the Consortium one or more firms (the
                   “Provider(s)”) with whom the Members would contract individually
                   for provision of natural gas services. Members who contract for
                   natural gas supply are hereafter referred to as “Participant(s)”.

                          PowerOptions desires to enter into a master agreement (the
                          “Program Agreement”, see Appendix B) with the Provider for the
                          offering of firm natural gas service to meet the needs of each of the
                          Participants throughout the term of any contracts resulting from this
                          RFP. Such gas service is to be provided to Participants under
                          standard individual contracts (the “Participant Agreements”)
                          executed with them by the Provider. A form of Participant
                          Agreement is at Appendix A.

 PowerOptions has endeavored to ensure consistency and accuracy in the data represented but does not warrant the
consistency or accuracy of the data. PowerOptions does not make a commitment to a minimum load for the

                    Table 1: PowerOptions Gas Program - Summary of Usage 2004-2009
                                              (millions Dth)

                                            2004      2005       2006      2007        2008      2009 *

Total annual load                             3.50       5.00      6.50       7.80       10.10     10.80

Note: PowerOptions has endeavored to ensure consistency and accuracy in the data but does not warrant the consistency or accuracy of the data.
* estimated

Table 2:     PowerOption Natural Gas Program - Estimated Summary Monthly Data for PowerOptions Members
             Currently Under Contract - 12 months ending October 2009 (decatherms)

[page replaced with spreadsheet]

II.    Proposal Contents and Evaluation of Proposals

Proposals are expected to include and will be evaluated on the elements described in
this section. Proposers may provide a limited amount of additional relevant information
regarding their services if such information has not been provided elsewhere in
response to this section, or the RFP.

A.     Description of Proposer

PowerOptions will evaluate the Proposer’s background and experience as an additional
indicator of its reliability. Experience, past performance, and references will be
considered in the evaluation.

 Provide the name of Proposer and the Proposer’s headquarters’ street, mail,
   telephone, fax, website address and e-mail addresses of principal contacts. Provide
   the same information for Proposer’s principal office in Massachusetts, if different.
   Identify Proposer’s key management (including key staff in Massachusetts), the
   individual serving as Proposer’s principal point of contact, and the individual serving
   as Proposer’s principal point of contact during the RFP consideration period, if
 Describe the organizational relationships between or among Proposer and
   Proposer’s parent or affiliate entities. Include all relationships above the Proposer to
   the top-most organization and all relevant affiliates, that is, any affiliate entities in
   related businesses, and any which may be called upon for financial, technical, staff,
   or supply program support.
 Provide Proposer’s most recent audited financial statements, annual reports,
   consolidated financials, and Form 10-K, any available published evaluations of credit
   or business condition, such as Moody’s Global Credit Research report, published
   notices of credit standing occurring within the past two years, and five year credit
   rating history. If available, provide similar materials for parent entities, significant
   affiliates, as discussed above, and collaborators.
 Describe the company and describe its experience in serving natural gas customers
   in New England. The experience should include information on the length of time in
   the natural gas marketing business, average daily sales quantities for annual or
   seasonal periods, number of customers corresponding to the average sales
   quantities, the interstate pipelines on which deliveries were made to the gas LDCs,
   the names of the gas LDCs on whose systems the Proposer has been active, and
   the names and telephone numbers of three customers who can be contacted as
   references regarding business operations and customer service.

B.     Price

Price is a threshold element of the evaluation. The degree to which pricing allows
Members flexibility and options will be a favorable factor.

Contracted prices will be stated as two components, basis and commodity, which may
be established for different lengths of time. The Basis component is the subject of this
RFP. It is expected that commodity prices will be established at the time of execution of
Pricing Confirmations using load weighted NYMEX strip values. Alternative commodity
pricing options may be suggested by Proposers. These commodity options might
include a price cap with downside participation or a collar.

The pricing point for basis is at the city gate station of each LDC. Proposers are
required to offer fixed price quotations but are encouraged to offer other pricing options,
such as a price tied to an index, a collar or some specific formula. Fixed price
quotations do not necessarily have to have a constant price for the entire term of the
contract. Fixed price quotations should be provided annually or seasonally over a
potential contract term of three or four years.

PowerOptions believes one effective means of managing price risk is to be able to
make price commitments for only a percentage of future full requirements needs at a
particular point in time, similar to dollar cost averaging. Certain Participants may
respond favorably to an option to price, at various points in advance, percentages of
their gas requirements for one or more months such that all of a Participant’s
requirements in any month would not have been priced at one time, in effect allowing for
a layering of prices and mitigation of price risk. Proposer may offer layering as an
option, not replacement, to the fixed price required above. Pricing commitments
created via layering will be applied pro-rata to the actual load.

It should be assumed that city gate prices include any implications of the upstr eam
capacity assigned to the customer by its LDC. The customer will assign the capacity to
the supplier who will be responsible for the cost or other implications of the assignment
and receive any benefits from the management of that capacity. The supplier will be
able to use the capacity as it sees fit, but will have to recover any costs of the
assignment in the city gate price. It should be assumed that the city gate price
determined by adding the basis to the appropriate NYMEX strip price is applicable to
the total volume of gas that a customer takes in a given month, adjusted for fuel use. If
a customer’s actual load is greater or less than the historical volume for the
corresponding month of the previous year, the same price will apply to all volumes.

To the extent that Participants do not elect to fix the commodity price of their natural gas
in advance for a particular month or months, Proposer shall offer to Participants an
additional option to fix their commodity pricing for natural gas for any month in the
contract term as long as provider is notified of such election at least 5 business days
prior to the commencement of such month. In the event that Participants do not elect to
fix gas commodity pricing for the specific month, pricing for the natural gas for that
month will be calculated at the settlement price of the relevant NYMEX natural gas
futures contract.

Proposers are encouraged to submit pricing options to members who have dual fuel
capabilities. One example of this might include offering the member an economic
incentive to switch to an alternate fuel during periods of high pipeline demand for an
agreed upon number of winter days.

 Submit completed Form 3 in Excel spreadsheet format.
 Specify proposed procedures for fixing natural gas and/or fuel oil prices under this
   service arrangement.
 Describe fully any guarantees that are included in the Proposal. Specifically, address
   whether the Proposer would be willing to match lower prices it may offer to other
   similarly situated customers during the term of the Agreement and contracts.

C.     Reliability of Supply and Transportation Arrangements for Firm Service

Reliability of supply is a primary aspect of the Proposer’s capability and will be a
principal factor in the evaluation.

The Provider will be required to sell and deliver on a 365-day primary firm basis to the
Delivery Point(s) for Participant and Participant will agree to purchase and cause to be
received from Provider natural gas sufficient (including an amount sufficient to cover the
Local Distribution Company’s (“LDC's”) tariff provision for natural gas used or retained,
lost and/or unaccounted for in conjunction with transportation from the Delivery Point(s)
to the Participant’s facilities) to provide the Participant with firm full requirements service
during the term of the Agreement.

Members are located throughout Massachusetts and are served by LDCs that are
interconnected with Tennessee Gas Pipeline or with Algonquin Gas Transmission.
Some Members are customers of more than one LDC. The Provider is responsible for
making all necessary pipeline and LDC nominations and will absorb any daily or
monthly imbalance charges imposed by either the interstate transporters or the local

 State that Proposer has the capability of serving the entire Consortium’s
   requirements on either or both pipelines.
 Describe the supply and transportation arrangements that will be used to provide the
   service, describe what services the Participants are required to contract for with the
   LDC, if any, and describe how the service will work for the Participant under the
   LDC’s tariff. Describe how Proposer plans to manage imbalances and whether the
   Participant is expected to subscribe to any type of balancing service offered by the
 Warrant that specific types of upstream arrangements have been made or are
   planned to provide Participants with firm natural gas service. State whether the

     necessary contractual arrangements are already in place, the extent to which some
     of the contracts are in place, and what steps would need to be taken and the time
     frame for taking the steps necessary to firm up the portfolio.

D.      Performance Guaranty

The Proposer’s ability to meet its contractual obligations and to provide a reliable supply
of natural gas is a significant issue and will be specifically evaluated. PowerOptions will
evaluate the financial condition, experience and operational performance of the
Proposer, the quality of performance and risk assurances provided, and the extent of
supply-assuring practices and techniques, and other commitments provided by
Proposer. PowerOptions will examine the extent to which Proposer has gained
commitments from parties to be relied upon in the reliable delivery of natural gas,
including suppliers, intermediaries, system operators, pipelines, distribution companies
and services contractors. PowerOptions will carefully evaluate recourses available to
Participants for failure of the Provider to deliver services and levels of performance
expected or implied in the Proposal. In this connection, PowerOptions will evaluate the
financial strength of the Proposer. For purposes of this analysis, any security or parent
or affiliate guarantees proposed by the Proposer shall be considered. To the extent
possible, PowerOptions will consider both the present financial condition of the
Proposer and its risk management strategy.

It is expected that Provider will hold Participants harmless (if the Proposer is a wholly
owned subsidiary, LLC, affiliate, etc., a parental guaranty or other acceptable
Performance Assurance is required) as a result of any failure on the part of the Provider
to perform and the Provider is expected to absorb any penalties imposed by the LDC for
any failure to deliver to the LDC or comply with the LDC’s requirements and procedures.

 Provide a precise description of any performance bond, parent or affiliate guaranty,
   letter of credit or deposit of cash or securities offered to guarantee or secure
   satisfactory performance by the Proposer of its obligations. Describe any limitations
   or approvals that would apply to delivery of such security.

E.      Contracts

PowerOptions has developed a form of Program Agreement (Appendix A) and a form of
Participant Contract (Appendix B) that have provided a clear, comprehensive and
beneficial framework for the relationships of the parties. It is PowerOptions intention to
continue using these forms of agreements, adjusted as necessary to reflect specifics of
the supply arrangements agreed between PowerOptions and Provider. Draft contracts
are being provided in WORD format. PowerOptions requests that Proposers note
specifically all exceptions and redline all suggested changes to the provisions of the

agreements, and provide a written explanation as to any exception taken to the

F.    Customer Service: Metering, Billing, Inquiry, Complaint and Dispute
Resolution, Credit

PowerOptions will consider the quality of administrative services provided by the
Proposer to the Participants. The Proposer’s plan for and current and expected
capabilities in coordination of data acquisition and nominations processing, billing and
customer service will be evaluated. Further, any other customer related services
designed to ensure Provider responsiveness to Participants, including customer inquiry,
complaint, collections, and dispute resolution processes, will be considered.

The Proposer will be expected to provide Participants with a minimum package of
administrative services as follows; summary monthly billings with sufficient supporting
detail of consumption and cost by account and meter to facilitate reconciliation of billing
data to LDC statements, recomputation of billed costs, and timely and efficient entry of
consumption and cost data into participants accounting and energy management

 Explain the anticipated metering and billing process for natural gas delivered for
   Participants. Provide sample bills. Describe any arrangements developed with
   LDCs regarding metering and billing (or plans for such arrangements) and provide
   any materials that would demonstrate the efficacy of such activities.
 Describe in detail the means of being available to Members and Participants for
   inquiry about participation, service matters, complaints, or any other matter relating
   to their firm natural gas supply.
 PowerOptions believes that the Members comprise customers with a superior
   history of bill payment and is not aware of any payment defaults, or demand for
   credit assurance (as such has been permitted) during the past ten years of
   PowerOptions supply contracts among these entities. It is a goal of PowerOptions to
   facilitate only supply arrangements that have no unexpected cost or financial
   exposures that may arise after contract execution. Finally, a large number of the
   PowerOptions membership are small and/or have limited obligation or ability to
   produce audited financial statements. Accordingly, it is PowerOptions intention to
   retain the current practice of 1) exempting the smallest Members from a credit
   assurance obligation and 2) for others, to limit the credit examination to the
   beginning of the contract or, with respect to accounts that may be added later, to the
   exposure they may bring. Proposer is invited to discuss alternatives that preserve
   this goal.
   Describe the Proposer’s plan for dealing with Member and Participant credit issues,
    including any implications on price if affected by adjustment factors. Provide
    Proposer’s dispute resolution procedure and policies regarding non-payment and
    termination of business arrangements with a customer.

    Provide references from four existing customers in Massachusetts, preferably
     institutional or governmental customers.

G.      Marketing Approach

Because the Consortium is a voluntary organization, its ultimate success will depend on
the execution of gas supply contracts by Members, the retention of Participants and the
ability of the Provider to attract additional qualified Participants. PowerOptions intends
to evaluate the marketing approach offered by the Proposer, including the adequacy of
staff resources and the timeframe for introduction of the PowerOptions firm gas supply

 Describe Proposer’s plan for marketing the PowerOptions firm gas supply
   arrangements to Members and recruiting and retaining Participants. Specifically
   indicate the timetable and number and qualifications of personnel, of either Provider
   or PowerOptions, expected to be needed for the initial enrollment effort.
 Indicate the minimum and maximum consortium size, including minimum and
   maximum load and number of Participants (or segments of the Consortium
   business) the Proposer believes would be acceptable to serve effectively. Please
   note that PowerOptions desires to make this program available to all Members
   regardless of size, and will therefore disfavor proposals that seek to limit Participants
   by either size or number.

H.      PowerOptions Costs

PowerOptions has performed a substantial service in creating PowerOptions ® and
organizing a consortium membership that is informed, prepared for the competitive
market and, in most cases, has participated in competitive supplier delivery of gas for a
number of years. PowerOptions will continue to work with the Provider to market and
enroll Participants, develop arrangements for delivery of services, and monitor
performance of Providers. The Board of PowerOptions intends that PowerOptions be
financially self-supporting by means of a fee mechanism to providers of services to the
Consortium. Accordingly, the Provider’s obligation to PowerOptions will be a base fee
of $50,000 per quarter for each quarter of the proposed contract, plus a negotiated per-
decatherm fee for any gas sold above an annual threshold. Recognizing that individual
contracts with Participants may be for multiple year periods, the Provider must
acknowledge that this obligation continues during renewal years of the individual
contracts with members and the agreement with PowerOptions.

   Proposers are to specifically acknowledge their obligation to PowerOptions for these
    costs. Proposers may suggest means of allocating these costs to the periods
    covered by the agreement.
   Proposers should propose an annual threshold above which a per-decatherm fee
    would be paid to PowerOptions. Proposer should also propose the per-decatherm
    fee for gas sold above that threshold.

Provider shall acknowledge that PowerOptions has and will continue to provide its
members with electric procurement and demand response programs. Accordingly,
during the Term, Provider shall not, either directly or indirectly (e.g., through its channel
partners or affiliates), solicit any PowerOptions Member or Participant for electric supply
or demand response.

III.   Procurement Schedule, Process and Forms

     This RFP is being distributed to any entity requesting a copy by 2:00 PM on
     December 23, 2009. Availability of the RFP will be advertised in several
     newspapers with general circulation in Massachusetts prior to this cutoff date.
     Proposals must be received by 2:00 p.m. EST on January 7, 2010. The
     proposal must be submitted by to:

       Don Carroll
       Director of Programs
       99 Summer Street - Suite 1040
       Boston, MA 02110

Contents of Proposal
     Proposals must include all information requested in Section II and proposal forms
     included in Section III of this RFP, including (a) a signed copy of Form 1,
     Submittal Statement, in .pdf format, which includes an acknowledgment that the
     offer embodied by the proposal is firm and shall remain open until March 4,     ,
     2010, notwithstanding any counteroffer by, or negotiations with, PowerOptions,
     Inc. or any Member in the Consortium, and affirms Proposer’s commitment to
     provide the resources required to fulfill obligations to the program, and (b) a
     signed copy of Form 2, Release and Waiver of Claims and Non-suit Agreement,
     in .pdf format.

       If the proposal represents that obligations of the Proposer will be guaranteed by
       one or more parents or affiliate entities, Form 1 must also be executed by such
       parent entities or affiliates. All materials submitted in response to this RFP shall
       become the property of PowerOptions and will not be returned to submitters.

       PowerOptions shall use reasonable efforts to maintain the confidentiality of all
       submissions to the extent permitted by law (other than the identity of submitters).
       With the exception of the Proposals of Providers, and one designated
       confidential file copy of all other Proposals, PowerOptions will destroy all portions
       of submissions indicated as confidential by the Proposer, within six months of the
       execution of one or more firm gas supply Agreements or a decision to reject all

       Written questions concerning this RFP or any aspect of the PowerOptions
       program are welcome until 2:00 p.m. on December 14, 2009 by e-mail.
       Questions will not be accepted verbally.

      Questions should be submitted by email to:

      Don Carroll
      Director of Programs
      99 Summer Street - Suite 1040
      Boston, MA 02110

      Responses to all questions received by 2:00 p.m. on December 14, 2009 will be
      posted to the PowerOptions web site as they are received.

Selection Process
      PowerOptions will initially evaluate proposals as submitted and may request
      interviews with a panel of finalists. A broad range of factors will be considered in
      evaluating proposals. Some of the factors to be considered and their likely
      relative importance in the evaluation and negotiation process are described in
      Section II. PowerOptions will then negotiate with one or more Proposers with the
      goals of a) selecting one or more Providers, b) producing a standard bilateral gas
      supply contract for each Provider for services to Consortium Participants (see
      Appendix A) and, c) producing an overall Program Agreement between
      PowerOptions and each Provider, in the form of Appendix B.

      PowerOptions anticipates that the standard firm gas supply contracts and the
      overall Program Agreement can be fully negotiated with one or more Providers
      during the first quarter of 2010.

Reservation of Rights
     PowerOptions is hopeful that all parties receiving this RFP will submit proposals,
     and that one or more Providers will be selected to serve the Consortium
     Members. However, PowerOptions reserves the right, in its sole discretion at
     any time and from time to time, to reject in whole or in part any and all proposals,
     and to accept in whole or in part any proposal, including any unresponsive
     proposal. Neither PowerOptions nor any Consortium Member or Participant shall
     have any obligation with respect to a Proposer or Provider until a written
     agreement has been executed and delivered by the affected parties and then,
     only to the extent set forth in such agreement.

      PowerOptions also reserves the right to incorporate by reference all or some of
      the sections of this RFP and a Provider’s response to any section as part of the
      Agreement which will be entered into by PowerOptions and the Provider with
      respect to providing services to the Consortium.

                PowerOptions® Request For Proposals
For Firm Full Requirements Natural Gas Supply and Related Services

                  FORM 1 - SUBMITTAL STATEMENT

                       (see attached Word file)

                PowerOptions® Request For Proposals
For Firm Full Requirements Natural Gas Supply and Related Services


                       (see attached Word file)

                PowerOptions® Request For Proposals
For Firm Full Requirements Natural Gas Supply and Related Services

                      FORM 3 - PRICING SHEET

                    (see attached Excel spreadsheet)

                    APPENDIX A

                  APPENDIX B


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