Request for Information. Prepay Electricity Vending Services. Commercial in Confidence. Issue Date: 16 November 2013

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1 Request for Information Prepay Electricity Vending Services Commercial in Confidence Issue Date: 16 November 2013 PO Box Auckland, New Zealand

2 Table of Contents 1. Introduction Background About Tonga Power Limited Glossary of Terms Scope of Supply Vending Services Additional Services RFI Proposals Indicative Evaluation Process Indicative Timetable Communications Notification of Receipt of RFI and Intention to Respond Notices to Proponents Format of Proposals Alternative Proposals Delivery of Proposals Validity Period RFI Terms and Conditions Prepay Electricity Vending Requirements Overview Conceptual Future State Pricing Services Currency Exchange Contract 20 Appendix A: Terms & Conditions of RFI Agreement by Proponents to RFI Terms and Conditions Responsibilities of Proponents TPL has no Obligations Submission of Proposals Proposal Qualifications Subcontracting Joint/Consortia Proposals Presentations Ownership and Intellectual Property Rights No Canvassing or Influencing Costs Proponent Request to Extend Closing Date Doc ID: 284/10/01, 16 November 2013 Page: 2

3 13. Confidentiality Gifts and Hospitality No Anti-Competitive Behaviour Conflict of Interest Liability Governing Law Verbal Advice/Information General Conditions Currency/Foreign Exchange Rates Appendix B: Requirements 29 Response Guidelines Business Requirements Technology Requirements Technology Description Product Licensing Requirements Expertise Implementation and Knowledge Transfer Support Requirements Support Capability, Warranties and Documentations Appendix C: Pricing Schedules Basis of Pricing Indicative Volumes Support & Training Additional Services Other Appendix D: Acknowledgement/Transmittal Forms 46 Appendix E: Key Contractual Terms 50 Doc ID: 284/10/01, 16 November 2013 Page: 3

4 1. Introduction 1.1 Background Tonga Power Limited ( TPL ) has 17,000 residential and 4,000 commercial customers on its four electricity networks throughout the Kingdom of Tonga. 85% of its customers are on Tongatapu, the remainder on three small outer island grids. TPL is interested in understanding the potential options for replacing its installed meter stock, with a view to improving the credit management of its business, and potentially accessing the functionality of smart metering technologies to improve the operation of its business. Currently TPL disconnects close to 6% of its customers each month for non-payment of electricity charges and is not able to recover the full cost of disconnecting and reconnecting these customers. Theft and meter bypass/tampering are also significant revenue protection challenges faced by TPL that suggest some form of prepay metering solution would have a meaningful impact on the payment behavior of its customers, and on TPL s quality of service to customers. In addition to these specific revenue protection issues, TPL recognise that it has a range of wider requirements including the move to more sophisticated tariffs, the ability to deal with distributed generation and remote monitoring and/or enhanced control of certain elements of its network which could be achieved through the use of Advanced Metering Infrastructure (AMI). The purpose of this RFI is to find one or more suitable service providers for TPL to work with on the provision of the vending component of it s prepay electricity proposition using AMI. 1.2 About Tonga Power Limited TPL is a state-owned enterprise, wholly owned by the Government of Tonga and operated as a stand-alone company at arm s-length under a concession overseen by an independent regulator. TPL is a traditional, vertically integrated power supply company which serves four of the Tonga archipelago of over 170 islands. The main island of Tongatapu in the southern island cluster is the largest with some 80% of the Tonga population living there. Doc ID: 284/10/01, 16 November 2013 Page: 4

5 Other systems are on Eua, also in the southern cluster, Ha apai in the central cluster and Vava u in the northern cluster. Each of these centres has a diesel power station and a medium to low voltage distribution system. Tongatapu has a small 11kV network, the three outer island networks currently operate at 6.6 kv. Some of these feeders are long relative to the voltage levels so that control of frequency and voltage levels within acceptable ranges can be difficult. This is especially so for the low voltage networks, given the low electricity demands of the connected customers. With distributed generation located on these lines in the future, control problems and voltage fluctuations will be exacerbated and must be explicitly evaluated in advance. 1.3 Glossary of Terms In this RFI, unless the context indicates otherwise: Additional Services means additional services offered by a Proponent in their Proposal but that are not mandatory under the RFI; Alternative Proposal means a Proposal that differs from that contemplated by this RFI; Cash Management means the activity relating to the receiving of payments from TPL customers and the provision of the value of that payment to TPL Closing Date has the meaning given to that term in paragraph 3.8; Contract means a supply contract that is entered into by TPL and the Vendor, as a consequence of this RFI; Customer means the end consumer of electricity or purchaser of a Top Up Head-End means the meter head-end; Issue Date means the issue date of this RFI; MDM means Meter Data Management; Merchants mean the physical Point of Sale from which TPL customers can procure Metering System means the Head-End, smart meters and the communications network that together operates so as to deliver the functionality detailed within this RFI; Doc ID: 284/10/01, 16 November 2013 Page: 5

6 Notices to Proponents means clarification of particular items, additions to or subtractions from this RFI issued by Tonga Power Limited from time-to-time in accordance with paragraph 3.5; POS means Point of Sale such as a Merchant kiosk Preferred Proponent means the Proponent selected from the Short-Listed Proponents for further negotiation in accordance with paragraph 3.1; Proponent means the person or persons who lodge a Proposal in accordance with the RFI; Proposal means a Proponent's proposal submitted in response to, and in accordance with, this RFI; RFI means this request for proposals, including all appendices, any addenda and any Notices to Proponents; Settlement means the payment of monies received from TPL customers into a TPL bank account Short-Listed Proponents means the Proponents who are Proposals have been selected for further assessment in accordance with paragraph 3.1; Technical Requirements means the technical requirements set out in the Technical Requirements Overview in section 5 and the Technical Requirements in Appendix B; Top Up means the purchase of a prepay electricity payment TPL means Tonga Power Limited TPL Procurement Manager means the TPL person who has primary responsibility for procurement under this RFI, as specified in paragraph 3.3 Validity Period means the period set out in 3.9; Vendor means the successful Proponent (if any) who enters into the Contract. Vending channels means the channels through which TPL customers could make a prepay electricity payment, such as a merchant, SMS or internet banking Vending System means a central secure vending communications and database server that manages the receipt of vending transactions from vending channels, orchestration of transaction Doc ID: 284/10/01, 16 November 2013 Page: 6

7 requests with financial clearing houses and the prepayment management system, controls vending finalisation and logs all transactions for reporting and audit. Doc ID: 284/10/01, 16 November 2013 Page: 7

8 2. Scope of Supply This section sets out, at a high level, the scope of the services for which TPL is seeking responses from Proponents. The specific requirements are set out in the Functional Requirements (being section 5 and Appendix B). 2.1 Vending Services Through this RFI, TPL is intending to identify appropriate service providers to work with for the supply of the vending components of it s prepay electricity solution using AMI. Specifically TPL is seeking proposals for: Vending Channel Services The provision of a network of merchants able to provide electricity top up services to TPL s customers throughout Tonga The provision of all of the POS terminals and other technologies required to undertake prepay electricity top ups The provision of the messaging capability that interfaces to the TPL Prepay Systems for the financial transactions associated with each TPL customer s vending activity The provision of electronic vending channels appropriate for TPL customers to top up pre paid electricity accounts The provision of an offshore remittance service for the direct top up of TPL customers prepay electricity accounts The associated cash management, settlement, reconciliation and reporting of payments made for prepay electricity by TPL customers 2.2 Additional Services Proponents that wish to offer Additional Services can do so in the Response Schedules, Appendix C. Additional Services, that are not included in this RFI, could include: Post pay electricity Bill Pay services It is important that Proponents offering Additional Services separate the costs of the Additional Services from the pricing of the specified vending services. Furthermore Proponents should appreciate that any Additional Services offered will not be evaluated as part of this RFI. If a Proponent that has offered Additional Services is selected as the Preferred Proponent, then TPL Doc ID: 284/10/01, 16 November 2013 Page: 8

9 may choose to discuss the offer of those Additional Services. Proponents that do not offer Additional Services will not be penalised. Doc ID: 284/10/01, 16 November 2013 Page: 9

10 3. RFI Proposals This section sets out, at a high level, the requirements for Proponents' Proposals and the process to be followed by Proponents and TPL. Proponents should ensure they comply with this section 3 and the specific Terms and Conditions of the RFI referred to in section Indicative Evaluation Process TPL intends to evaluate the Proposals and conform the Proposals to a common basis for evaluation. As part of this process TPL may prepare a list of questions to obtain any additional or missing information required from Proponents. TPL intends to use a set of specific criteria and weightings for each component of this RFI, including criteria such as: Maturity of solution/services Fitness for purpose of solution/services Likely fit of proponent with TPL from a working relationship perspective Price of solution/services Demonstrated ability to implement and support solution/services in a Pacific Island context The price evaluation will be based upon the transactional pricing provided by Proponents together with the expected operational and maintenance costs, including any Proponent annual support costs. From the evaluation process TPL will select up to 2 Short-Listed Proponents. All Proponents that submit Proposals will be advised in writing of their status following the evaluation process. Short-Listed Proponents will be contacted to determine suitable dates for clarification visits, reference site visits as required. A TPL team will conduct the visits to obtain a clear understanding of the Short-Listed Proponents': Existing Vending Channel Capabilities Underlying technology and operational processes Key personnel and resources responsible for delivering the Proponent s services; Support infrastructure; Doc ID: 284/10/01, 16 November 2013 Page: 10

11 Commercial terms The TPL evaluation team may visit reference sites and discuss how the Proponent s existing solution has been implemented and what has been learnt from the ongoing performance of the services. Following the visits programme, TPL will select a Preferred Proponent and notify all parties accordingly. 3.2 Indicative Timetable The indicative timetable for this RFI process is tabulated below. TPL reserves the right to vary this timetable. Activity Date RFI Issued 16 November 2013 Proponents confirmation of receipt 19 November 2013 Proponents confirmation of intent to 22 November 2013 respond Last date for questions 06 December 2013 RFI Closing Date ( responses) 13 December 2013 Last date for hard copy responses 20 December 2013 Advise Short-Listed Proponents 17 January 2014 Programme of visits commences 20 January 2014 Preferred Proponent notified 31 January 2014 Contract Awarded 28 February Communications All communications with TPL relating to this RFI must be directed to: John McCutcheon TPL AMI Procurement Manager Level 1, 79 Grafton Road, Grafton PO Box , Newmarket, Auckland 1149, New Zealand DDI Mobile Doc ID: 284/10/01, 16 November 2013 Page: 11

12 From the Issue Date of this RFI until a Contract is signed by both parties, all correspondence is to be directed to the TPL AMI Procurement Manager. Proponents shall not be permitted to communicate with other TPL personnel in relation to this RFI unless otherwise agreed with the TPL AMI Procurement Manager. 3.4 Notification of Receipt of RFI and Intention to Respond Proponents are requested to notify receipt of this RFI within 24 hours from receipt by ing the form Acknowledgement of Receipt of RFI Form contained in Appendix D provided as a separate electronic Microsoft Word format document. Proponents are requested to notify their intent to respond or not as the case may be, by completing the Intention to Respond Form, also contained in Appendix D provided as a separate electronic Microsoft Word format document. Proponents that do not notify their intention to respond (or not respond), within one week of the Date of Issue of this RFI will be contacted to confirm receipt of the RFI and to ensure that any Notices to Proponents are sent to the designated persons. 3.5 Notices to Proponents TPL may issue Notices to Proponents to clarify this RFI or to effect modifications to this RFI from time-to-time and at any time prior to the Closing Date. Each Notice to Proponents will be issued to all Proponents who have notified TPL of their intention to respond. Upon such issue or notification, each Notice to Proponents will form part of this RFI. 3.6 Format of Proposals Proponents must submit all information required by this RFI in strict accordance with the forms and formats contained in Appendices B and C. The reasons for this requirement are twofold: (i) (ii) to make it easy for TPL to evaluate and conform the responses; and to make it easy for Proponents to respond. Appendices B and C are issued in editable Microsoft Word format documents along with this RFI. Proponents should expand the response portions of tables to accommodate the information that they wish to provide to TPL. Information provided should allow a clear and detailed evaluation of the Proponent s services. Proposals submitted pursuant this RFI must be submitted electronically to the address listed in the Communications paragraph 3.3 above, in Microsoft Word format in English and by Doc ID: 284/10/01, 16 November 2013 Page: 12

13 one paper copy signed by a duly authorised person from the Proponent using the "RFI Proposal Transmittal Form" in Appendix D, posted or delivered to the address in the Communications paragraph 3.3. Proponents are urged to complete the response forms fully as TPL may refuse to consider Proposals that do not provide all information required by this RFI, or may score incomplete portions zero. Any non-compliance with this RFI must be specifically highlighted by Proponents in their Proposals. Non-complying Proposals may or may not be accepted by TPL at its sole discretion. Copies of brochures and other Vendor material are not required. 3.7 Alternative Proposals Proponents may wish to offer an Alternative Proposal. Alternative Proposals must accompany a conforming Proposal. The Alternative Proposal must indicate that the Proponent can demonstrate a technical or commercial advantage to be gained by TPL in implementing the Alternative Proposal in preference to the conforming Proposal. 3.8 Delivery of Proposals All Proposals must be delivered electronically by by 4pm, 13 December 2013 (Closing Date) to with hard copies to follow by 20 December 2013, sent to the offices of: Power Business Limited Level 1, 79 Grafton Road Grafton Auckland New Zealand or PO Box Newmarket Auckland 1149 New Zealand 3.9 Validity Period Proposals submitted pursuant to this RFI shall remain valid for a period of 3 months from the Closing Date. Doc ID: 284/10/01, 16 November 2013 Page: 13

14 4. RFI Terms and Conditions The specific Terms and Conditions governing this RFI are contained in Appendix A. In the event of any inconsistency between the specific Terms and Conditions and some other part of this RFI, the specific Terms and Conditions take precedence. Doc ID: 284/10/01, 16 November 2013 Page: 14

15 5. Prepay Electricity Vending Requirements Overview This section sets out, at a high level, TPL s prepay electricity vending requirements, including an indicative future state AMI architecture and a description of the key underlying processes associated with prepay vending. Proponents should ensure their Proposal addresses and complies with both this section 5 and the detailed Requirements for this RFI set out in Appendix B. Appendix B also serves as a table of conformance. Proponents should use the provided Microsoft Word format document of Appendix B to indicate their conformance with the Technical Requirements and all non-conformance and any departures/tags or commentary. 5.1 Conceptual Future State The diagram below presents the high level conceptual futures state TPL AMI architecture including the in scope vending components. Smart Meters AMI Comms Network Vending Channels Customer Comms Call Centre/ IVR Field Force Portal Vending System Prepay Mgt System Orion (CIS/Billing) AMI Head-end System Meter Data Mgt System LEGEND FOR RFP SCOPE: FileMaker System In Scope new component Out of Scope - new component Out of Scope existing component Finance System Doc ID: 284/10/01, 16 November 2013 Page: 15

16 High Level Transaction Flow The envisaged high level transaction flow for prepay vending of electricity is reflected in the schematic below. 1 Vending Channels 6 Customer Comms 2 Vending System 5 4 Prepay Mgt System 3 Bank/ Credit Card Clearing 8 7 Orion (CIS/Billing) Finance System TPL Systems Doc ID: 284/10/01, 16 November 2013 Page: 16

17 High Level Transaction Step 1 Customer Tops-up at a vending channel (merchant, SMS or web) with a Top-Up amount 2 The vending channel sends the transaction to the Vending System, that then sends the payment transaction request to the corresponding bank/credit card for clearing 3 The corresponding bank/clearing house validates the payment and accepts/declines the transaction. The result is sent back to the Vending System. 4 The Vending System upon receipt of approval sends the transaction request to the Prepayment Management System of TPL. Note: A declined payment transaction will not proceed and customer is advised via the message sent back to the Vending Channel. 5 The Prepayment Management System will receive the payment transaction and trigger the calculation of usage vs. credit for the prepay customer account. The Prepayment Mgt System sends back the credit balance calculation result to the Vending System. - Positive Credit Amount - Negative Credit Amount (showing amount owed from unpaid usages) 6 The Vending System receives the result for the Prepayment Mgt System and finalises the payment transaction. The receipt showing the credit balance provided by the Prepayment Management System. 7 The customer receives the receipt with credit balance information The Bank sends the payment transaction as part of the bank reconciliation file to TPL s Finance team and settlement process. TPL s Finance is posted with the customer payment and sends update to the Orion (CIS/Billing) System to update the customer account. TPL s Orion (CIS/Billing) System s customer account is updated with the financial transaction. Core Component descriptions Vending Channels The provision of an extensive and accessible network of pre payment electricity merchants offering top up services for TPL customers. Includes all associated telecommunications, terminals, printers and other hardware necessary to provide vending services to meet TPL s requirements Any electronic vending channels able to be used remotely by TPL customers such as SMS, Web vending, mobile wallet etc. Doc ID: 284/10/01, 16 November 2013 Page: 17

18 Vending System & Transactions The capability to securely generate financial transactions from Point of Sale (POS) to TPL s pre payment management system based on the purchases made by TPL s prepay electricity customers The ability to apply rules to ensure only approved/cleared financial transactions are processed with the Prepayment Management System Ability to present credit balance result and messages coming from the Prepayment Management System as part of finalising the top-up The ability to report on transactions generated from all vending channels Off Shore remittances The capability for offshore payments to be made against the TPL customer s prepay electricity accounts Cash Management, Settlement and reconciliation The management of all cash, eftpos and credit card payments received from TPL prepay electricity customers The settlement of payments in TPL s nominated bank accounts on a frequency that meets TPL s requirements The reconciliation and reporting of all payments against completed vending transactions Doc ID: 284/10/01, 16 November 2013 Page: 18

19 6. Pricing 6.1 Services The Response Schedules, Appendix C, requires Proponents to list their respective component prices relating to vending services including set up, transactional, and support related activities. Proponents are asked to provide volume pricing according to specified breakpoints. 6.2 Currency Exchange Proponents should refer to clause 21 of the Terms and Conditions of RFI in Appendix A for details on how nominated currencies and currency exchange rates will be addressed. Doc ID: 284/10/01, 16 November 2013 Page: 19

20 7. Contract The proposed key terms for the Contract resulting from this RFI are set out in Appendix E. The Preferred Proponent will be expected to enter into a Contract that substantially reflects these terms; therefore Proponents should clearly identify any proposed departures from/tags to the key terms in their Proposal. Doc ID: 284/10/01, 16 November 2013 Page: 20

21 Appendix A: Terms & Conditions of RFI 1. Agreement by Proponents to RFI Terms and Conditions Each Proponent is deemed to have reviewed, acknowledged and agreed to the terms and conditions set out in this RFI without reservation or variation. In the event of any inconsistency between this Appendix A and any other section or provision of this RFI, this Appendix A will prevail. 2. Responsibilities of Proponents The information contained in this RFI or otherwise provided to Proponents by TPL in connection with this RFI is for the purpose of the Proponents considering, and responding to, this RFI. TPL has taken reasonable steps to ensure that the information provided is accurate, complete and not misleading, but does not warrant or represent that this is the case. No assurances or representations are made by TPL, whether before or after the issue of this RFI or during the RFI process and each Proponent accepts and acknowledges, and is deemed to have accepted and acknowledged that its decision as to whether to submit a Proposal or not, and the Proposal itself, is made solely on its own judgement and not upon any express or implied representation, statement or warranty made by TPL, or on behalf of TPL. Each Proponent acknowledges that it is its own responsibility, before submitting a Proposal, to: examine this RFI, any documents referenced by this RFI and any other information made available to it by TPL, or via TPL website (www.tongapower.to); identify and obtain all information it may require to prepare and submit its Proposal; obtain independent advice (including legal and accounting advice); consider all the risks, contingencies, impacts and other circumstances which may affect its Proposal and its ability to perform in accordance with it; and Satisfy itself as to the correctness and sufficiency of its Proposal, including the costings and prices stated in the Proposal, and all information provided with its Proposal. Without limiting this section 2, in submitting a Proposal, each Proponent acknowledges and agrees that it has not relied on any express or implied statement, representation or warranty as to the truth, accuracy or completeness of the information contained in this RFI or otherwise provided to the Proponent by TPL. 3. TPL has no Obligations No legal or other obligations will arise between a Proponent and TPL in relation to this RFI, or in relation to the process, conduct, or outcome of this RFI, unless and until that Proponent and TPL have entered into a binding written Contract and the Contract is, or becomes, unconditional in which case the Contract will be binding on the parties only in accordance with its terms. Doc ID: 284/10/01, 16 November 2013 Page: 21

22 This RFI does not constitute an offer by TPL to acquire services, or enter into any arrangement with any person. This RFI does not commit TPL to proceed with, continue, or follow, the process outlined in this RFI or to evaluate any particular Proponent's Proposal or enter into any discussions, negotiations or contractual arrangements with any Proponent. Nothing in this RFI, or in the relationship of TPL and each Proponent, imposes any duty of care on TPL and any such duty of care is expressly excluded. The provisions of this Section 3 apply notwithstanding any other provision of this RFI and in the event of any inconsistency; this Section 3 will take precedence. 4. Submission of Proposals Proposals must be submitted in accordance with, and must comply with, the terms of this RFI. Each Proponent warrants and represents to TPL that: the information contained in, and submitted with, its Proposal is complete and accurate in all material respects and may be relied upon by TPL; and the provision of the information contained in, and submitted with, its Proposal, and the use of it by TPL or any third party to whom TPL may make such information available to: o for the evaluation of, and discussions in respect of, the Proposal or any offer by the Proponent to provide the Services; and/or o in the negotiation of the terms of any contract in relation to the Proposal (whether or not resulting in a Contract), o will not breach any third party intellectual property rights, and each Proponent indemnifies TPL against all direct losses incurred by TPL as a result of a breach of such warranties or the representations being incorrect. A Proposal, once submitted to TPL, may be varied by the Proponent only on the request of TPL, and will remain open for consideration by TPL for 6 months after the Closing Date. Proponents may be asked to clarify their respective Proposals or provide additional information in connection with the evaluation of their Proposals. These requests will require prompt action and must be responded to in writing in the time specified in the request. Failure in doing so may result in the Proponent's Proposal not being considered any further. 5. Proposal Qualifications Any qualifications to a Proposal must be clearly recorded in the Proposal and in the relevant sections of the Appendices. Any qualifications not clearly recorded in this manner may be excluded from further consideration in relation to this RFI. Proposals submitted subject to significant qualifications may be considered as alternative Proposals and will, if evaluated, be evaluated by TPL accordingly. Doc ID: 284/10/01, 16 November 2013 Page: 22

23 A Proponent may be requested to remove unacceptable qualifications in that Proponent's Proposal. Refusal to remove qualifications may result in the Proposal being rejected. If the consequence of a qualification or a qualification itself is unacceptable to TPL the Proposal will be considered to be non-conforming and may be rejected. 6. Subcontracting TPL may consider Proposals where the Proponent subcontracts one or more portions of the services to others. If a Proponent's Proposal includes services to be performed by subcontractors or third parties, the names of the subcontractors or third parties, and the particular services that they will each perform must be clearly identified. The Proponent must ensure that there is a single point of contact for account management and assume total responsibility for the actions of the subcontractors or third parties and will not be relieved of any of its obligations under the Proposal for the supply of any goods or services from subcontractors or third parties. 7. Joint/Consortia Proposals TPL may accept Proposals from multiple joint Proponents (including consortia). If a joint or consortium Proposal is submitted, a clearly identifiable, single organisation is required to be responsible for the joint Proponents. The following information is required: a detailed description of the proposed: o legal relationship between each joint-proponent/member of the consortium; o management structure for the joint Proponents/consortium; o roles and responsibilities of each joint-proponent/member of the consortium; o primary responsible organisation for TPL to direct contract, management and performance engagement issues; and o the manner in which the joint Proponents/consortium will enter into contracts, including the proposed party or parties to enter into agreements with TPL; and confirmation that either: o each joint-proponent/member of the consortium: (a) appoints a nominated member of the consortium to represent it in all discussions and negotiations with TPL in relation to this RFI (with such nominated member being authorised to also represent all other joint Proponents/members of the consortium); and (b)authorises that nominated member party to bind it in relation to those matters; and (c) is jointly and severally liable for the performance of all joint- Proponents/members of the consortium under any agreement that may be entered into with TPL; or o one joint-proponent/member of the consortium is fully liable for the performance of all others; and Doc ID: 284/10/01, 16 November 2013 Page: 23

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