First Addendum RFP for Solar Photovoltaic Generating System RFP Depot Bid Number

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1 First Addendum RFP for Solar Photovoltaic Generating System RFP Depot Bid Number Section 18, Addenda and Interpretation, of the RFP is deleted in its entirety and replaced with the following: 18. ADDENDA AND INTERPRETATION 18.1 The City shall not be responsible for nor be bound by any oral instructions, interpretations or explanations issued by the City or its representatives. Should discrepancies or omissions be found in this RFP or should there be a need to clarify the RFP, requests for clarification may be sent via or fax to the attention of the contact named in Section 6 or through RFPDepot.com Answers to questions submitted through RFP Depot shall be considered addenda to the solicitation documents. All addenda and notices related to this procurement will be posted by CITY on RFP Depot. In the event this solicitation is obtained through any means other than RFP Depot, CITY will not be responsible for the completeness, accuracy, or timeliness of the final solicitation document. 2. Q. Per Section of the CSI Handbook, solar equipment must serve an onsite electrical load. Because highway 101 is a public access road, the fuel farm ground area is considered a separate site from the Terminal A site (location of the interconnection). As such, the City, nor a PPA Investor, cannot receive CSI rebates for a system located at the fuel farm site with a tie-in located at Terminal A. Please confirm whether or not the City has obtained a variance on this issue. If not, please notify bidders if we should assume the fuel farm site is no longer in scope. A. The City has not received a variance from PG&E for the fuel farm site location. However, based on the current version of the CSI Handbook, we believe that the question was intended to quote CSI Handbook Section 2.2.4, Equipment Must Serve On-Site Electrical Load. The intent of this section appears to primarily address that the actual size of the system cannot exceed the required usage of the service that is being tied in to. The CSI application submitted by the City described the work and identified all potential sites. The application was approved by the CSI Program Administrator (PG&E). Notwithstanding any statements or representations made by the City in this RFP, the City does not represent or warrant that any of the proposed four sites at the Airport or any PV System proposed will qualify for the PG&E CSI Program. Therefore, proposers should make their own determination as to whether their Page 1 of 9

2 proposals, including but not limited to their proposed installation site(s) at the Airport, will qualify for the PG&E CSI Program. This question has been submitted to PG&E for clarification, and this City will issue an addendum in the event that the City receives additional information from PG&E regarding this question before the proposal deadline. 3. Q. We'd like to request a one-week extension to the period to provide feedback on the Solar Energy Purchase Agreement (Attachment G). It would be greatly helpful if we can provide comments by Tuesday 5/13, 6pm. A. After considering your request to extend the deadline for questions, the Airport has determined that the resulting impact on the project schedule would be detrimental and therefore will not extend the date from the current May 6, 2008 date posted. 4. Q. What is the basis of Design Capacity of Solar Power for SJ International Airport? A. As stated in section 4.1 of the RFP, a 1 megawatt solar system will generate approximately 1/4 of the current annual consumption for Terminal A. 5. Q. Is it Minimum 1 MW and Multiples of 1 MW additional capacity for future expansion? A. As stated in Section 4.1 of the RFP, proposers must provide a minimum of 1 MW ac of PV. Proposers may exceed 1 MW if they deem that to be the most cost effective approach. There is no preference on sizing increments beyond 1 MW. 6. Q. Is there a provision for future expansion? A. Not required by RFP 7. Q. Fresno airport has capacity of 2 MW. So If SJ International Airport is double the size of Fresno airport/we need at least 5 MW solar power. A. This RFP is for a minimum 1 MW ac solar PV. 8. Q. In deciding solar power/renewable power is Fuel Cell Power a good option/ may be based load for Fuel cell Power of 5 MW/or 3 MW and 1 or 2 MW Solar Power Project? A. This RFP is for a minimum 1 MW ac solar PV. 9. Q. The SJ Airport expansion is in several phases /what are the power needs projections for first year/first five years & ten years projection on expansion & potential for local Airports /Aircrafts Maintenance & Business Technology Park similar to Rolls Royce Engine Repairs project near Oakland airport? Page 2 of 9

3 A. Potential future Airport RFP's may address additional solar opportunities. This RFP is for a minimum 1 MW ac solar PV. 10. Q If possible, please provide 12 months of electricity bill from PG&E (preferably all of 2007). Currently attachment D of the RFP provides only one month. A. The utility bills requested for this site are not available within the timeframe of this addendum; however, power usage for this meter is very constant throughout the year. The one month provided is a good representation of standard power usage. 11. Q. Which roofing company has the warranty for the FIS building? A. S. J. Amoroso Construction Company, the Contractor that constructed the FIS facility, provided the warranty for the roof. 12. Q. At the site visit it was mentioned the Terminal A roof was 18-years old. Will this be re-roofed prior to the PV system being installed? Proposer suggests doing this to help improve project economics. A. Section 4.1, Solar Site #2: Terminal A Roof, states this roof to be approximately 15 years old and does not anticipate that a replacement of the roof will occur prior to the application of the solar array. Proposers are to assume that this roof will be re-roofed during the term of the solar PPA agreement. 13. Q. What are the security requirements for personnel working on this project? A. Systems located on the FIS or the Terminal A sites are in the secure area. Contractor employees accessing this area will have to attend a 2-3 hour training and badging process. 14. Q. Are there any recent updates on the installation schedule for the new 12kV tie-in from the new fuel farm? A. The 12kV tie-in will not occur within the timeframe of the installation of this solar project. The 12kV substation is not programmed at this time. 15. Q. With reference to Fuel farm site layout plans on the CD, we can only see 2.5 acre's available at the east corner of the fuel farm field. We were told in the presentations that there was 4 acre's available for a 1Mw system. Can you confirm that the 4 acre's are available and on which part of the field. (Can we use the phase 2 area dedicated to the fuel farm also shown on the site layout plans.). A. The area available for the solar is southeast of the Fuel Tank Farm area and not within the boundaries of the Fuel Tank Farm. See Exhibit C of the RFP for site clarification. There are approximately 3 1/2 to 4 acres available. Page 3 of 9

4 16. Q. Are there any height restrictions on panels in the field? A. Yes, there are airspace restrictions, but these should not affect expected ground mount installation. 17. Q. What type of security fence will be installed at the fuel farm (Question is a reflection on panel shading)? A. Unknown at this time, however Fuel Farm fencing will only be on the northwest side of the solar site. 18. Q. How close can we install panels to the fuel farm? A. Up to the south east boundary of the Fuel Farm security fencing. 19. SECTION 2.3: TERM Q. It is a condition precedent to the effectiveness of the PPA that moneys required for payments under the PPA are appropriated from the City Council. Proposer proposes that alternative remedies, including a termination payment, be considered in the event that San Jose terminates the PPA as a result of an appropriation. How does San Jose presently appropriate power? A. The City will not agree to an early termination payment, and Section 2.3 therefore remains unchanged. The City currently includes appropriations for power at the Airport in its annual budget. 20. SECTION 4.3: STANDARDS OF OPERATION Q. If the Lessee is to be bound by the covenants in Section 4.3 relating to a the prohibition on causing a conflict with, cancellation of, or increased premium relating to San Jose s insurance policies, the Lessee must be provided with the content of such insurance policies for its review. A. The City's insurance policies are public records and are available for review by proposers and will be available for review by the Lessee. 21. SECTION 8: RENT, FEES AND CHARGES Q. Rather than a Lease and Rental Fee Structure as presented in Section 8 of the PPA, Proposer would suggest the provision of easements or a less administratively taxing leasing structure. A. It is standard practice at the Airport to charge a lease rate which is established through a City Council Resolution for Airport Premises under the exclusive control of a Lessee. Setting aside the proposed solar locations has an opportunity cost to the Airport as those locations cannot be used for other purposes. Page 4 of 9

5 22. Q. Note that the unilateral right to adjust the Security Deposit without a stated ceiling to such amount is unacceptable to Proposer (Section 8.3). A. The provisions in Section 8.3 are consistent with provisions in the City s standard leases at the Airport, and Section 8.3 therefore remains unchanged. 23. Q. Section 8 further states that the Rent, Fees and Charges may be unilaterally amended by Resolution of the City Council. What does such Rent, Fees and Charges include? Is it intended to cover any compensation of the contractor for the Generating System? A. Section 8 refers to lease rates, security badging fees, and other costs of doing business at the Airport. It is not intended as compensation for the Generating System. 24. SECTION 9.2: TITLE TO ATTRIBUTES Q. San Jose is entitled to benefit from title to Environmental Attributes. We understand that certain of the incentives included within the present definition of Environmental Attributes would be allocable to a financing party, including the CSI incentive. Proposer would be pleased to propose an alternative definition for Environmental Attributes A. Section 1, Summary of Terms, definition of Environmental Attributes, of the PPA is deleted in its entirety and replaced with the following: "Environmental Attributes" shall mean that attribute of energy which qualifies for any type of credit or incentive for generating energy through a means which does not rely on the continual consumption of fossil fuels, but specifically excluding any tax credits, investment credits, product tax credits, rebates, or other similar tax benefits that may be associated with owning, operating or generating electricity through means which do not rely on the continual consumption of fossil fuels. Environmental Attributes include carbon trading credits, renewable energy credits or certificates, emission reduction credits, emissions allowances, green tags, tradeable renewable credits, Green-e products, and all similar credits. Environmental Attributes includes those credits available upon the Effective Date and all of those which may become available during the Term. This definition excludes the PG&E furnished California Solar Initiative program credits and rebates described in Exhibit E. 25. SECTIONS 10 and 11: MAINTENANCE OF PREMISES AND IMPROVEMENTS Q. Provisions relating to operation and maintenance of the Premises, including Improvements, standards of performance and the compensation, should be further discussed. If San Jose has specific and particular requirements relating to the operation and maintenance of the Generating System, such particulars and the operator s compensation, must separately negotiated and contained within an operation and maintenance agreement (Section 10). Page 5 of 9

6 A. The City does not intend to enter into a separate operation and maintenance agreement with the Lessee. Sections 10 and 11 remain unchanged. 26. SECTION 13.2: TITLE TO IMPROVEMENTS, ALTERATION AND REPAIR Q. A financing party is likely to have certain constraints, and further comments relating to, San Jose s early right to purchase the Generating System. A. Section 13.2 remains unchanged. As provided in Section 22.1 of the RFP, by submitting a proposal, each Proposer agrees to execute the City's PPA in substantially the form attached to the RFP, as revised to incorporate the pertinent criteria contained in the selected Proposer's submittal. The City will not agree to any substantive changes to the PPA after award, regardless of any changes requested by either the selected Proposer or its financing party. Exhibit F to the PPA, Buyout Schedule, should include impacts associated with early buyout 27. SECTON 14.1: PAYMENT BOND Q. San Jose to explain bonding requirements relating to the Unemployment Insurance Code. A. Section 14.1 is amended and restated in its entirety as follows: "The payment bond must provide that if Lessee's contractor or its subcontractor(s) fails to pay any of the persons named in Section 3181 of the California Civil Code, or amounts due under the Unemployment Insurance Code with respect to the work or labor contracted to be done and performed by any claimant, then the surety will pay for same, in an amount not exceeding the amount of the payment bond. The payment bond shall protect City from any liens, liability, losses or damages arising therefrom, and shall name Lessee's contractor or contractors as principals, and City as obligee. 28. SECTION 17: SECURITY MEASURES Q. As Lessee is expected to abide by its provisions, please provide a copy of the Airport Masters Security Plan (Section 17.1). A. The Airport Master Security Plan is designated as Sensitive Security Information (SSI) under applicable Federal law and is therefore confidential. Airport staff will notify the successful proposer of all provisions of the Airport Master Security Plan that will be applicable to the Lessee. 29. Q. The PPA allocates responsibility for preventing vandalism and damage to the Generating System to the Lessee (Section 17.2). Proposer believes that the security infrastructure at the San Jose Airport is better suited to perform these obligations, as it has an effective security system currently in place. Page 6 of 9

7 A. The Lessee will have possession of the leased premises during the term of the agreement and therefore should be responsible to prevent vandalism and damage to the Generating System. Section 17.2 remains unchanged. 30. Q. San Jose to explain the intent of Section In particular, please confirm what such reference to the reduction of rent or fee payments includes. A. Section 17.3 is not applicable to the Solar PV System and is therefore deleted in its entirety. 31. SECTION 19: ASSIGNMENT OR TRANSFER Q. Section 19 states that a transfer or assignment of the PPA would require the prior consent of San Jose. Note that a potential transaction and financing structure would require assigning the PPA from the contractor to such financing party. If such structure is elected, the consent of San Jose would be expected in advance within the body of the PPA, and without any suggested processing fee. A. Any assignment or transfer of the PPA required as part of Lessee financing will require City's consent as provided in Section 19, and the City will not agree to waive its approval rights for assignments or transfers in connection with Lessee financing. The City shall waive its right to assess a processing fee and therefore, Section 19.4 of the PPA is deleted in its entirety and replaced with the following: Lessee's failure to provide City with full, complete and necessary information shall be sufficient cause for City to deny consent to, or to refuse to review, the proposed transfer. 32. SECTION 20.1: EVENTS OF DEFAULT Q. Events of Default to include any customary cure periods, and be adjusted appropriately to reflect any change in the transactional structure, as the case may be. San Jose should be subject to reciprocal Events of Default. The remedies and damages described in Section 20.2 are not, in the experience of Proposer typical for an Event of Default relating to similar transactions. Each party should be entitled to terminate the PPA following an uncured Event of Default and seek damages suffered, as determined in accordance with a legal proceeding. A. The provisions in Section 20.1 are consistent with provisions in the City's standard leases at the Airport, and Section 20.1 therefore remains unchanged. Page 7 of 9

8 33. SECTION 22: INDEMNITY AND WAIVER OF CLAIM Q. San Jose should provide a reciprocal indemnity in favor of the Lessee. In the experience of Proposer, the indemnity provision provided in Section 22.1 is unusually onerous. Neither party should be entitled to full indemnification in the face of joint, several or concurrent liability. Why is Lessee being asked to waive all claims for action against San Jose in Section 22.3? A. The provisions in Section 22 are consistent with provisions in the City's standard leases at the Airport, and Section 22 therefore remains unchanged. 34. SECTION 23: INSURANCE Q. Insurance Requirements, as set out in Exhibit B and Section 23, are subject to the internal approval of Proposer. A. The City's minimum insurance requirements as set out in Section 23 remain unchanged. 35. SECTION 26.3: TAXES; ABSENCE OF LIENS Q. Why is the Lessee obligated to post a bond, in an amount acceptable to San Jose, in the event that Lessee contests the failure to impose a lien? A. Section 26.3 is consistent with provisions in the City's standard leases at the Airport, and Section 26.3 therefore remains unchanged. 36. SECTION 28.2: DAMAGE OR DESTRUCTION Q. Termination rights of San Jose, in all cases, and in the case of damage or destruction, are likely to be subject to further comments of a financing party. A. The City will not agree to any changes to Section 28.2 after award. 37. SECTION 39: RELOCATION, EXPANSION OR CONTRACTION Q. Why is the Lessee responsible for costs of relocation, expansion or contraction? A. Section 39, Relocation, Expansion or Contraction of Premises, is deleted in its entirety and replaced with the following: In the event that implementation of the City's requirements for the Airport, changes in airlines or flight schedules, or other changes in business conditions necessitate the relocation, expansion or contraction of the Premises, or any part thereof, Lessee shall relocate all or part of its operations on the Premises, or any part thereof, or contract or expand the size of the Premises in an expeditious manner only as may be permitted, Page 8 of 9

9 directed or required by the Director. In such event, City shall pay Lessee s reasonable relocation costs. Amendments to this Agreement which change or modify the description of the Premises set forth in Section Error! Reference source not found. above to specify in writing increases, decreases, or relocation of the Premises, and which include only such rental rates on a per square foot basis as are specified or authorized in accordance with Section Error! Reference source not found. above, may be executed on behalf of the City by the Director. 38. SECTION 40.5: MISCELLANIOUS Q. In our experience, the Force Majeure provision is extremely limited, and should be expanded to align with market provisions. A. No specific changes to Section 40.5 are proposed in this question. Section 40.5 is consistent with provisions in the City's standard leases at the Airport, and Section 40.5 therefore remains unchanged 39. EXHIBIT C: HAZARDOUS MATERIAL Q. San Jose to explain reasoning behind Lessee assumption of risk relating to Hazardous Material released during the course of the Agreement. This risk is unacceptable to Proposer. A. Exhibit C is consistent with provisions in the City's standard leases at the Airport, and Exhibit C therefore remains unchanged. 40. A proposer has submitted some objections to the RFP and Power Purchasing Agreement (PPA). The City s response is attached as Attachment 1 to this Addendum. Page 9 of 9

10 Attachment 1

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