Bidder Responsibility

B. Proposer Obligations

1. Regulatory Compliance.

   Proposer is responsible for, in all respects, acquiring all necessary authorizations, approvals, consents, licenses, orders, permits (including environmental), from, by or with any governmental or regulatory authority related to a Proposal or any NRGF and for maintaining compliance with all obligations that are or will be required by current or future federal, state, or local laws, regulations, or ordinances of any governing authority necessary for the successful implementation of the Proposal. Further, the Proposer is responsible for ensuring that it satisfies the definition of “renewable energy” set forth in Section 366.91, Florida Statutes.

   For proposals that require new electrical power plant siting subject to the Florida Electrical Power Plant Siting Act (“Power Plant Siting Act”), FPL will be a co-applicant in a Section 403.519 Determination of Need proceeding before the FPSC. FPL will cooperate reasonably with any such Proposer to provide information or such other assistance as may be reasonably necessary for the Proposer to satisfy licensing and regulatory requirements. Any selected Proposer(s) shall support fully all of FPL’s regulatory requirements associated with this potential capacity and energy arrangement.

   A Proposal that requires new electrical power plant construction falling under the Power Plant Siting Act must include and demonstrate a permitting and construction schedule that allows the NRGF to be in commercial operation on or before the scheduled capacity and/or energy delivery date as provided by Proposer in Form #1.

2. Development Activities.

Proposer is responsible for, in all respects, locating, acquiring, developing (including the permitting), constructing, operating and financing (if applicable) the NRGF.

Proposer is also responsible for, in all respects, securing, locating, or guaranteeing any emissions allowances, credits, or offsets which may be required by the Title IV Clean Air Act Amendments, Clean Air Interstate Rule, Clean Air Mercury Rule or other federal, state, or local requirements (including all environmental laws) to allow the construction and/or operation of the proposed NRGF.


3. Project Execution.

Proposer will be responsible for, in all respects, ensuring that the implementation of any and all parts of the Proposal are carried out in full compliance with laws, regulations, ordinances, licenses, permits, and other regulatory approvals and obligations (including environmental) that affect the Proposal, including any changes, modifications, or additions thereto.

FPL will not bear any price or cost risk associated with any such changes, modifications, or additions that affect the Proposal.

4. Project Funding and Costs.

Proposer is responsible for, in all respects, all cost, expense and financing activities related to the NRGF and for all engineering, design, procurement and construction of all aspects of the NRGF. These include, but are not limited to, the power block, environmental control systems, fuel availability and delivery systems (if applicable), and transmission system interconnections, etc. Proposer is also responsible for, in all respects, sourcing and contracting for a reliable fuel supply, firm transportation and any other activity required for the reliable delivery of Firm Capacity and/or Energy to FPL at the applicable delivery or interconnection point. All costs associated with the design, construction, operation, and maintenance of the transmission interconnection facilities (including but not limited to generator step-up transformers and high-voltage breakers) associated with the delivery of Firm Capacity and/or Energy to FPL will be the responsibility of the Proposer.

5. Interconnection and Transmission Service.

The Proposer must secure with the appropriate transmission provider(s) all required interconnection agreements, transmission facilities and related arrangements required to deliver Firm capacity and/or Energy to the FPL transmission system on a firm basis for the entire term of the Proposal.

6. Cooperation.

Any selected Proposer(s) agrees by the act of submitting a proposal in response to this RFP to file, as needed, an application under the Power Plant Siting Act and to fully support, as requested by FPL, any FPL regulatory proceeding(s) related to energy and/or capacity purchases emanating from this solicitation, including a proceeding for FPL to obtain prior approval for recovery of costs incurred. Proposers shall be responsible for all of Proposer’s costs to participate in regulatory proceedings.

C. Requirements for Proposals

FPL has established certain preferences and requirements for all Proposals submitted in response to this RFP. In the discussion below, FPL delineates between requirements where FPL has a preference (which will be accommodated in the evaluation of Proposals), and requirements with which the Proposal must comply. Requirements which include the phrase “must” are designated as Minimum Requirements.

Failure of a Proposal to satisfy one or more Minimum Requirements will be grounds for determining a Proposal ineligible. If a Proposer fails to satisfy one or more of the Minimum Requirements, the Proposer must list separately each Minimum Requirement which it does not satisfy, why it cannot be satisfied, and why it is in the best interest of FPL’s customers for the requirement to be waived. FPL reserves the right to waive any non-compliance with these Minimum Requirements, in its sole discretion.

Proposals determined to be ineligible will be returned to the Proposer along with a refund of the RFP Evaluation Fee described in section II.F.2 of this RFP.

1. Proposal Submission Requirements.

All proposals and variations to proposals must be received by the FPL RFP Contact Person identified in Section II.D.1 by the Proposal Due Date and Time identified in Section II.F.5. Proposers must submit five (5) bound hard copies, plus an electronic copy of the completed forms on a CD (supplied with the RFP), by the Proposal Due Date and Time. The RFP Evaluation Fee must accompany the proposal(s) and any variations.

All required forms and the information requested on these forms must be submitted. FPL may choose to contact a Proposer to request that omitted or incomplete information be provided, but is under no obligation to do so. Any attempt by a Proposer to disclaim generally the terms and conditions of this RFP without stating specific exceptions and alternative language will be grounds for determining a proposal to be incomplete, and therefore ineligible.

2. Term of the Proposal(s).

The Firm Capacity and/or Energy offered by the proposal must commence within the time frame identified.

• Delivery of Firm Capacity and/or Energy under the PPA can commence no earlier than the later of: i) January 1, 2008, or ii) when all required regulatory approvals (specifically including the prior approval of the Florida Public Service Commission for FPL’s cost recovery) are obtained.
• The minimum term for Proposals that do not require a need determination is one (1) year from initial deliveries of energy under the PPA.
• The minimum term length for proposals offering PPA sales from a NRGF requiring a need determination is ten (10) years from initial delivery of energy under the PPA.
• The maximum term length shall be the economic life of the NRGF.

3. Preferred Firm Nature of Energy and/or Capacity.

• Proposals which offer year-round energy are preferred; however, FPL will consider proposals that do not meet this requirement due to the type of technology or type of fuel (e.g., electric power production during grinding season only for the sugar industry).
• It is preferred that the firm capacity (if any) be fully dispatchable under the operational control of FPL, subject only to the operating capabilities of the NRGF; however, FPL will consider submissions that do not meet this requirement
• FPL strongly prefers that units be located within the State of Florida.

4. Identifiable Capacity Source.

The Proposal’s Firm Capacity and/or Energy must be from a specific NRGF that is clearly identified in the proposal.

• Proposals must commit all of the NRGF’s output, including all ancillary service products.
• Firm Capacity and/or Energy delivery must commence within the required time frame of the RFP and remain as Firm Capacity and/or Energy throughout the term of the applicable PPA.
• The Proposal must include the offer of all renewable attributes associated with the NRGF, including, for example, any Renewable Energy Credits. Proposals for the delivery of renewable attributes only, without the delivery of Firm Capacity and/or Energy are not acceptable.

5. Resource Block Size (MW).

The Proposer must propose a minimum resource block size that is 1 MW or larger.

6. Project Viability.

• For Proposals contemplating newly built generation the Proposer must provide a report with supporting information of its ability to successfully develop the NRGF. FPL strongly prefers that the Proposer demonstrate specific corporate experience with the successful development, financing, construction, and operation of a facility similar in size and technology to the proposed NRGF. Absent such experience, Proposer should provide adequate supporting material to demonstrate to FPL’s satisfaction that the NRGF can be successfully developed, financed, constructed, and operated on a commercial basis by the Proposer.
• Proposer must certify that there are no pending legal or civil actions that would affect the ability of the Proposer and/or its guarantor to develop, construct, finance or operate the proposed NRGF.
• Proposer must provide a detailed resource analysis adequate to demonstrate that the proposed NRGF has adequate renewable resources to meet the performance claims in the proposal.

7. Permit and Authorization Feasibility.

Proposer must provide a report that demonstrates that there are no significant barriers to obtaining the regulatory and governmental permits and authorizations required to complete the proposed NRGF on a schedule that meets the dates provided in the RFP. All proposed NRGFs will be subject to the approval of the appropriate regulatory authorities.

Proposer is responsible for, in all respects, acquiring all necessary authorizations, approvals, consents, licenses, orders, permits (including environmental), from, by or with any governmental or regulatory authority related to a Proposal or any NRGF and for maintaining compliance with all obligations that are or will be required by current or future federal, state, or local laws, regulations, or ordinances of any governing authority necessary for the successful implementation of the Proposal.

8. Site Development.

For newly built generation, the Proposer must be responsible for the location, development and permitting of the Proposer’s site for the proposed NRGF.

9. Proposal Pricing.

Pricing related to a Proposal must include any and all costs, fees and expenses that FPL will be expected to pay to the Proposer for the delivery of Firm Capacity and/or Energy and for the transfer of all renewable attributes associated with the NRGF pursuant to any applicable PPA. This includes without limitation:

• The cost of all equipment, development, design, construction, commissioning and all costs of meeting and maintaining compliance with environmental regulations that are in effect as of the scheduled capacity and/or energy delivery date or are known as of that date to be in effect during the pendency of a PPA that would result from selection of the Proposal.
• All required capital and O&M costs that would be incurred to transport fuel from the designated fuel supply resource to the NRGF for all proposals. This requirement applies to PPAs involving the combustion of any fuel.

Proposal pricing must be presented in the format specified in Appendix C. Should a Proposer choose to offer other than fixed prices for each year, it must explain the methodology for calculating the prices and supporting information to allow FPL to properly evaluate the pricing impact on its customers.

FPL will not be responsible or liable for any costs, fees or expenses in excess of those specifically identified in the Proposal.

10. Resource Supply

If a Proposer submits a NRGF dependent upon a single source of fuel supply, which such fuel source the Proposer does not own or control, the Proposer must include a commitment letter signed by an officer of the fuel resource owner committing to make the fuel source available as of the scheduled capacity and/or energy delivery date pursuant to a fully executed PPA by and between FPL and the Proposer.

11. Fuel Plan

Proposals for NRGF requiring combustion of any type of renewable fuel must be accompanied by a written plan setting forth the Proposer’s anticipated fuel supply arrangements (the “Fuel Plan”). The Fuel Plan must designate the fuel type, the intended fuel source and the arrangements for the delivery of the fuel. The Fuel Plan must be accompanied by evidence of feasibility (letter of intent or other indicative planning document) that identifies the required volume, sources and availability that will be required to operate the NRGF in such a manner as to meet the Proposer’s Firm Capacity and/or Energy commitments. To the extent applicable, Fuel Plans are to include detailed information and supportive documentation as to Proposer’s “right” to use the fuel source.

12. Minimum Operating Characteristics.

Fossil fuel use must be limited to the minimum quantities necessary for start-up and shut-down and for NRGF operating stability at minimum load. The NRGF must be capable of maintaining its maximum capacity and/or generate the amount of energy being submitted in the proposal without the use of fossil fuel.

13. Proposal Transmission Requirements.

• FPL will not accept any Proposal that requires FPL to secure firm transmission service and any associated rights. Securing such firm transmission service shall be the responsibility of the Proposer. Proposed pricing must include all costs, fees and expenses for delivering Firm Capacity and/or Energy to the delivery point specified in any applicable PPA.
• Transmission interconnection costs to connect the NRGF to the FPL system or a third party system must be included in the Proposal price.
• The costs of energy and capacity losses within the FPL system will be considered by FPL as part of its economic analysis of the Proposal and should not be included in the Proposal price.

14. Regulatory Modifications.

Proposer must agree that should FPL be denied authority to recover from its customers all of the payments required to be made by FPL under a PPA entered into as a result of this RFP, or any subsequent amendment thereto, FPL may, at its sole option, adjust the payments made under such PPA to the amount(s) which FPL is authorized to recover from its customers. In the event that FPL so adjusts such payments, then the Proposer may, at its sole option, terminate such a PPA upon one hundred eighty (180) days notice to FPL.

Potential PPA language would include:

Seller agrees that should FPL, at any time during the term of this contract, fail to obtain or is denied the authorization of the FPSC, or the authorization of any other legislative, administrative, judicial or regulatory body which now has, or in the future may have, jurisdiction over FPL's rates and charges, to recover from its customers all of the payments required to be made to the Seller under the terms of this contract or any subsequent amendment hereto, FPL may, at its sole option, adjust the payments made under such contract to the amount(s) which FPL is authorized to recover from its customers. In the event that FPL so adjusts the payments to which Seller is entitled under this contract, then Seller may, at its sole option, terminate such a contract upon one hundred eighty (180) days notice to FPL. If such determination of disallowance is ultimately reversed and such payments previously disallowed are found to be recoverable, FPL shall pay all withheld payments. The Seller acknowledges that any amounts initially received by FPL from its customers, but for which recovery is subsequently disallowed and charged back to FPL, may be offset or credited, against subsequent payments to be made by FPL to the Seller under such a contract.

If, at any time, FPL receives notice that the FPSC or any other legislative, administrative, judicial or regulatory body seeks or will seek to prevent full recovery by FPL from its customers of all payments required to be made under the terms of this contract or any subsequent amendments to this contract, then FPL shall, within thirty (30) days of such action, give notice thereof to the Seller. FPL shall use reasonable efforts to defend and uphold the validity of such a contract and its right to recover from its customers all payments required to be made by FPL hereunder, and will cooperate in any effort by the Proposer now Seller to intervene in any proceeding challenging, or to otherwise defend, the validity of such a contract and the right of FPL to recover from its customers all payments to be made by it hereunder.

15. Regulatory Approvals.

Proposer must agree that the obligations of Proposer to generate, deliver and sell, and of FPL to accept delivery of and purchase, Firm Capacity and/or Energy in any PPA that results from this RFP shall be subject to: (i) the FPSC having issued a final Determination of Need and the Governor and Cabinet sitting as the Florida Electrical Power Plant Siting Board shall have approved the Proposal (if applicable), (ii) the FPSC having issued a final non-appealable order concluding that FPL’s decision to enter into the PPA is reasonable and prudent and that FPL is entitled to recover from its customers all reasonably and prudently incurred payments for Firm Capacity and/or Energy pursuant to a PPA entered into as a result of this RFP, (ii) the FERC having issued a final non-appealable order authorizing Proposer to make the sales of Firm Capacity and/or Energy contemplated by such PPA, (if applicable), and (iii) each other Governmental Authority with jurisdiction over such PPA having issued a final order approving such PPA or otherwise authorizing sales of Firm Capacity and/or Energy under such PPA, as applicable, which orders are no longer subject to appeal.

16. FIN 46R Compliance.

Certain accounting rules now in effect, or as they might be amended or interpreted in the future, may require that the Proposer under the PPA be consolidated into the financial statements of FPL. Proposers should submit an analysis, with supporting information evaluating whether or not FPL would be required to consolidate the Proposer under the provisions of Financial Accounting Standards Board Interpretation No. 46 (Revised December 2003) (FIN 46R) or GAAP. A Proposer who enters into a contract with FPL under this RFP must agree to comply with a provision in the PPA that specifies requirements for FPL’s ongoing compliance with FIN 46R. For information purposes, the following provision would be incorporated into the PPA:

FPL Access to Records: Accounting rules set forth in Financial Accounting Standards Board Interpretation No. 46 (Revised December 2003) (“FIN 46R”), as well as future amendments and interpretations of those rules, may require FPL to evaluate whether the Seller must be consolidated, as a variable interest entity (as defined in FIN 46R), in the financial statements of FPL. Seller agrees to fully cooperate with FPL and make available to FPL all financial data and other information, as deemed necessary by FPL, to perform that evaluation on a timely basis at inception of the PPA and periodically as required by FIN 46R.

If the result of the evaluation under FIN 46R indicates that Seller must be consolidated in the financial statements of FPL, Seller agrees to provide financial statements, together with other required information, as determined by FPL, for inclusion in disclosures contained in the footnotes to the financial statements and in FPL’s required filings with the Securities and Exchange Commission (SEC). This information must be received by FPL in a timeframe consistent with FPL’s earnings release and SEC filing schedules, to be determined at the sole discretion of FPL. Additionally, Seller agrees to fully cooperate with FPL and their independent auditors in completing an assessment of Seller’s internal controls as required by the Sarbanes-Oxley Act of 2002 and in performing any audit procedures necessary for the independent auditors to issue their opinion on the consolidated financial statements of FPL

17. Binding Nature of Proposal.

Proposals must be certified by an Officer of the Proposer. Proposal(s) must remain as valid and binding offers for 120 days from the submittal date and cannot be modified, except to be withdrawn in full, or in response to a request for a Best and Final Offer from FPL. Clarifications requested by FPL are not considered modifications. Indicative bids are not eligible.

If a Proposal is selected for the Short List, the selected Proposer will be asked to provide a Best and Final Offer (“BAFO”). Such BAFO must be valid and binding for 180 days from the date of Short List publication.