Entergy Corporation · NYSE:ETR
Entergy — 2020 ETI CCGT RFP Bidders' Teleconference
32 slides from Entergy's conference presentation, Mar 23, 2020
Slide 1: 2020 RFP for Combined-Cycle Gas Turbine Capacity and Energy Resources for Entergy Texas
2020 Request For Proposals For Combined-Cycle Gas Turbine Capacity and Energy Resources for Entergy Texas, Inc. BIDDERS TELECONFERENCE/WEBCAST Creating sustainable value for all HIGHLY SENSITIVE, CONFIDENTIAL AND PROPRIETARY. SEE NOTICE ON LAST PAGE Page 1
Slide 2: Teleconference Introduction
2020 ETI CCGT RFP Teleconference Introduction • Purpose of the Teleconference • To give participants a high-level overview of the 2020 Request for Proposals for Combined-Cycle Gas Turbine Capacity and Energy Resources for Entergy Texas, Inc. (“2020 ETI CCGT RFP” or “RFP”) and related processes • Que
Slide 3: Agenda
2020 ETI CCGT RFP Agenda Introductions Independent Monitor Comments 2020 ETI CCGT RFP Overview RFP Evaluation Closing HIGHLY SENSITIVE, CONFIDENTIAL AND PROPRIETARY. SEE NOTICE ON LAST PAGE Page 3
Slide 4: Introductions
2020 ETI CCGT RFP Introductions • Entergy Presenters — John Raybourn Project Manager & Bid Event Coordinator — Staci Meyer ETI Resource Planning Manager — Daniel Boratko Economic Evaluation Team Lead — Heather Algeo Production Cost/Aurora — David Wilcox Viability Assessment Team — Laura Hamner Credi
Slide 5: Independent Monitor Comments
2020 ETI CCGT RFP Independent Monitor Comments Merrimack Energy Group Inc. INDEPENDENT MONITOR COMMENTS MERRIMACK ENERGY GROUP INC. ( WAYNE OLIVER) HIGHLY SENSITIVE, CONFIDENTIAL AND PROPRIETARY. SEE NOTICE ON LAST PAGE Page 5
Slide 6: RFP Overview
2020 ETI CCGT RFP RFP Overview Tentative RFP Schedule Bidder Registration Proposal Submission HIGHLY SENSITIVE, CONFIDENTIAL AND PROPRIETARY. SEE NOTICE ON LAST PAGE Page 6
Slide 7: Tentative RFP Schedule
2020 ETI CCGT RFP Tentative RFP Schedule Activity Target Date* RFP Documents Issued April 17, 2020 Bidder Registration Period May 15, 2020 – June 30, 2020 Proposal Submission Fee Payment Deadline July 2, 2020 Proposal Submission Period August 8-14, 2020 Primary/Secondary Selection Lists Announced Ja
Slide 8: Bidder Registration and Proposal Submission
2020 ETI CCGT RFP Bidder Registration and Proposal Submission • Bidder Registration and Proposal Submission will utilize forms and materials posted to • 2020 ETI CCGT RFP Website https://spofossil.entergy.com/ENTRFP/SEND/2020ETICCGTRFP/, including: • Bidder Registration Agreement • RFP Documents • Q
Slide 9: Bidder Registration and Proposal Submission
2020 ETI CCGT RFP Bidder Registration and Proposal Submission 2020 ETI CCGT RFP Bidder Registration Bidder completes Bidder Within three business days Bidders will be required to Registration Form and is after the last day of the Bidder remit wire payment(s) of the submitted to the Bid Event A confi
Slide 10: Key Objectives and Parameters of RFP
2020 ETI CCGT RFP Key Objectives and Parameters of RFP The addition of an ETI CCGT resource in ETI's "Eastern Region" of its service area would support several planning objectives, including: ➢ Maintaining Reliability and Operational Flexibility in the Eastern Region. Reliability in the Eastern Regi
Slide 11: Required Location – Eastern Region
2020 ETI CCGT RFP Required Location – Eastern Region Texas Louisiana The red line on the map indicates the approximate geographic border of the Eastern Region of Texas. ETI Eastern Region of The border is a function of the following ETI Texas transmission tie-lines: • Doucette – Deer 138 kV • Dayton
Slide 12: Parameters
2020 ETI CCGT RFP Parameters Scope Item Developmental Capacity and Energy Target Commercial Operation No earlier than May 31, 2025 and no later than May 31, 2026 Date Location ETI Eastern Region of Texas Cap Sought (ICAP) 1,000–1,200 MW* (Summer Conditions) Eligible Resources Developmental and Exist
Slide 13: RFP Proposal Threshold Requirements
2020 ETI CCGT RFP RFP Proposal Threshold Requirements • The RFP documents include threshold requirements: — Proposals not meeting the threshold requirements are non-conforming and may be eliminated from the RFP — The threshold requirements include, without limitation, those set forth in the table be
Slide 14: Design Features of Developmental Resources
2020 ETI CCGT RFP Design Features of Developmental Resources • Select required resource design features include, in addition to those previously identified in the posted Draft Minimum Requirements: • Evaporative cooling or inlet chilling • Control technology for air emissions includes a CO catalyst
Slide 15: Commercial Terms – Overview
2020 ETI CCGT RFP Commercial Terms – Overview • Draft Minimum Requirements for Developmental Resources are posted on the 2020 ETI CCGT RFP Website • ESL plans to include proposed Term Sheets and a summary Scope Book in RFP documentation • PPA, Toll, Acquisition Agreement (existing resources); PPA, T
Slide 16: Commercial Terms – General terms for PPAs and Tolls
2020 ETI CCGT RFP Commercial Terms – General terms for PPAs and Tolls • 10 - 20 years, beginning no earlier than June 1, 2025 and no later than June 1, 2026. Term • ETI prefers that the start date coincide with the start of the MISO planning period • Delay damages Guaranteed COD • Capacity re-sizing
Slide 17: Commercial Terms – General terms for PPAs and Tolls (Cont.)
2020 ETI CCGT RFP Commercial Terms – General terms for PPAs and Tolls (Cont.) • Based on availability of Dependable Capacity Capacity Payment • 2% discount for each 1% shortfall to monthly availability Discounts requirement • 1% discount for each 1% shortfall due solely to force majeure • Transactio
Slide 18: Commercial Terms – Pricing Components for PPAs and Tolls
2020 ETI CCGT RFP Commercial Terms – Pricing Components for PPAs and Tolls Pricing Component PPA Toll Capacity Rate (i) Fixed (for term or defined annually); or (i) Fixed (for term or defined annually); or ($/kW-year) (ii) Base Rate + CPI/PPI escalation (up or (ii) Base Rate + CPI/PPI escalation (up
Slide 19: Commercial Terms – Key terms for Acquisitions and Build-Own-Transfers
2020 ETI CCGT RFP Commercial Terms – Key terms for Acquisitions and Build-Own-Transfers Pricing Component Acquisition (Existing) Build-Own-Transfer (Developmental) Structure Asset purchase, not stock Asset purchase, not stock No assumed liabilities for the period prior to the Seller will develop, de
Slide 20: Commercial Terms – Additional notes
2020 ETI CCGT RFP Commercial Terms – Additional notes • This presentation does not cover numerous commercial terms that may be important to bidders • Commercial terms addressed in this presentation are preliminary and subject to change • RFP documents, which will include descriptions of commercial t
Slide 21: Electric Interconnection/Deliverability
2020 ETI CCGT RFP Electric Interconnection/Deliverability • Bidder/Seller will be responsible for and bear all the costs associated with the electric interconnection and deliverability of the proposed resource; for PPAs and Tolls, delivery will be to the ETI load node (via financial schedules) • Bid
Slide 22: Evaluation Overview
2020 ETI CCGT RFP Evaluation Overview • The RFP evaluation will seek to identify a proposal that meets ETI’s needs and RFP requirements at a reasonable cost, taking into account reliability, risk mitigation, and other relevant factors • Five RFP Proposal Evaluation Teams will evaluate proposals — Ec
Slide 23: Selection Process Overview
2020 ETI CCGT RFP Selection Process Overview • Primary Selection List — Due diligence/finalization and execution of definitive agreement would follow placement on the primary selection list — Inclusion on the primary selection list is not acceptance of the proposal or related contract terms — No req
Slide 24: Economic Evaluation Team (EET) Methodology
2020 ETI CCGT RFP Economic Evaluation Team (EET) Methodology • The EET will conduct an economic evaluation of proposals on a present value basis from the perspective of ETI’s aggregate customer base • The evaluation will: – Identify proposals that meet the RFP requirements most economically relative
Slide 25: Economic Evaluation Team (EET) Methodology
2020 ETI CCGT RFP Economic Evaluation Team (EET) Methodology • A net cost/benefit calculation will be performed for each proposal • Net cost/benefit will be presented in $M, $/kW, and $/MWh to account for differences in proposal size and expected energy production HIGHLY SENSITIVE, CONFIDENTIAL AND
Slide 26: Transmission Evaluation Team (TET) Methodology
2020 ETI CCGT RFP Transmission Evaluation Team (TET) Methodology The objective of the TET's assessment is to assess transmission/deliverability considerations associated with a proposal Threshold considerations may include, but are not limited to: • Resource location: Verification that the resource
Slide 27: Viability Assessment Team (VAT) Methodology
2020 ETI CCGT RFP Viability Assessment Team (VAT) Methodology • In general, the viability assessment will consist of a review and assessment of the non-price attributes of proposed resources and corresponding proposals submitted in response to the RFP • Bidders will be required to complete a self-as
Slide 28: Viability Assessment Team (VAT) Methodology
2020 ETI CCGT RFP Viability Assessment Team (VAT) Methodology • The VAT’s role includes evaluating elements of the proposals not assessed by the EET, TET, CET or AET HIGHLY SENSITIVE, CONFIDENTIAL AND PROPRIETARY. SEE NOTICE ON LAST PAGE Page 28
Slide 29: Accounting Evaluation Team (AET) Methodology
2020 ETI CCGT RFP Accounting Evaluation Team (AET) Methodology • The AET will determine the accounting treatment for each PPA/Toll proposal — The AET’s review areas will include, but are not limited to: • Whether the proposal contains a lease, and if so, whether the lease is capital or operating (AS
Slide 30: Credit Evaluation Team (CET) Methodology
2020 ETI CCGT RFP Credit Evaluation Team (CET) Methodology • The CET evaluates Bidder’s credit and other credit-related matters • The CET has modified its approach to credit support in resource procurement RFPs • The changes are designed to help Bidder determine and appropriately factor into proposa
Slide 31: Credit Evaluation Team (CET) Methodology
2020 ETI CCGT RFP Credit Evaluation Team (CET) Methodology • The CET will assign a Bidder credit rating (or Bidder’s parent guarantor credit rating) for all proposals, based on, among other things: — S&P and Moody’s ratings — 10K/10Q/8K evaluation — If SEC reports unavailable, two years of audited f
Slide 32: Q&A Follow-Up
2020 ETI CCGT RFP Q&A Follow-Up • Responses to questions received during today’s Bidders Conference will be posted to the RFP Website: https://spofossil.entergy.com/ENTRFP/SEND/2020ETICCGTRFP/ • ESL will accept written questions/feedback about the RFP from market participants and other interested pa