2024 Block Energy (AIC, ComEd, and MEC) and Capacity (AIC) RFPs

The Issuing Bank may request that the Pre-Bid Letter of Credit for a Company be cancelled before the Expiration Date but after the ICC renders its decision on the results of a procurement event if either: 1) the Bidder is a winning Bidder, the applicable supplier contract and related documents have been executed, the Bidder has met the credit requirements under the applicable supplier contract, and the Bidder has completed payment of the Supplier Fees due to the Illinois Power Agency; or 2) the Bidder is not a winning Bidder. Please see Paragraph VI.2.18 for additional information on deadlines related to the Post-Bid Process.

The Issuing Bank should send such request for cancellation by email to the email addresses provided in the applicable Pre-Bid Letter of Credit for a Company. A Company will cancel the Pre-Bid Letter of Credit by sending an electronic PDF file of Annex 3 Certificate of Cancellation executed by an Authorized Officer of the Company.

One ZRC represents one megawatt of Seasonal Accredited Capacity for a given Season of a Planning Year as such terms are defined in MISO’s Business Practice Manuals and MISO’s Open Access Transmission, Energy and Operating Reserve Market Tariff.

The purchase of electricity is not subject to sales/use tax in Illinois. Instead, electricity is subject to the Illinois Electricity Excise Tax. A wholesaler of electricity, a potential supplier, is not required to collect the Electricity Excise Tax from customers. Instead, the delivering utility (AIC or ComEd) is required to collect the Electricity Excise Tax from the consumer.

Therefore, the exemption certificate requested is not applicable for AIC or ComEd’s purchase of electricity in Illinois from potential suppliers.

Please see paragraph VI.2.14 of the RFP Rules, which states “for each Segment of each month, the price paid to the winning Bidder is the average of the Bidder’s own winning Bids for all blocks of that Product and for all blocks of a Combination that includes that Segment of that month.”

A “Bid” for Energy Products and Combinations is the price that the Bidder is willing to accept to deliver each MWh in one (1) block to the Company. A Bid must be displayed as a price, in $/MWh rounded to the nearest cent, for one (1) block of a Product or for one (1) block of a Combination. Each Bid price on the Bid Form is for a single block. A block is 25 MW.

It is the Procurement Administrator’s understanding that each of the supplier contracts for a Company will be administered separately such that margining under each contract will be calculated separately. Should multiple supplier contracts be subject to a margin call, a Company may transmit each such margin call under a single aggregate margin call. There will be, however, a single shared unsecured credit line across the contracts provided by the Company to the credit support provider.

The netting of credit exposure is memorialized in the calculation of the exposure amounts as well as a single shared unsecured credit line provided by the Company to each credit support provider. Each Company also allows for a single Post-Bid Letter of Credit to be provided by the seller to cover the exposure across all applicable supplier contracts with that Company.

When completing the Fuel Mix Report (Appendix 18) for a procurement event for Energy Products for a Company (AIC and/or ComEd), the Bidder should provide the expected fuel mix underlying the bids to the best of the Bidder’s ability. It is expected that the Bidder would not just provide “PJM fuel mix” or “MISO fuel mix” in this report if the Bidder has specific generation resources identified. It is possible that the actual fuel mix may remain to be determined at the point of bidding, and if for a portion this is the case, the Bidder can indicate that within the Fuel Mix Report.

If the energy to be supplied is expected to be sourced from PJM or MISO, then the Bidder should write either “PJM fuel mix” or “MISO fuel mix” in the “Other” column and fill in the applicable percentage for each month, year, and segment (On-Peak or Off-Peak).

The Final Fall 2024 (ComEd) Master Agreement was posted to the Final Materials page of the Block Energy and Capacity section of the procurement website on July 16, 2024. The Procurement Administrator will not be soliciting comments on the (ComEd) Master Agreement under the Fall 2024 BEC RFP.

All representations and certifications required by the RFP must be made by a single individual, who is an Officer of the Bidder. An Officer of the Bidder is an individual empowered to undertake contracts and bind the Bidder. If the Officer of the Bidder named in the Part 1 Proposal is not available to make the representations and certifications required in the Part 2 Proposal, the Bidder should select “No” in the First Item of Section 1 of the online Part 2 Form to indicate that the contact information for the Officer of the Bidder named in the Part 1 Proposal does not remain valid. The Bidder must then provide updated contact information for the new individual to be named the Officer of the Bidder in the Part 2 Proposal. The new Officer of the Bidder identified in the Part 2 Proposal must make all representations and certifications previously provided with the Part 1 Inserts submitted with the Bidder’s Part 1 Proposal. The new Officer of the Bidder identified in the Part 2 Proposal must make all representations and certifications required in the Part 2 Proposal by fully completing the Part 2 Inserts relevant to the procurement events for which the Bidder submitted a successful Part 1 Proposal.

Please refer to “Article Nine: Governmental Charges” of ComEd’s EEI Master Agreement and Coversheet posted to the Final Materials page of the Block Energy and Capacity section of the procurement website. Please consult your tax advisor regarding any taxes that may apply to payments for energy blocks.

A Bidder that paid a Bid Participation Fee pursuant to its participation in a prior 2024 procurement event, such as the Spring 2024 Block Energy and Capacity RFP, is not required to pay the Bid Participation Fee for the Fall 2024 BEC RFP.

All Part 1 Form Inserts are available in zip files below the heading “Appendix 5: Part 1 Form (Illustrative) (July 17, 2024)” on the Final Materials page of the Block Energy and Capacity section of the procurement website.

Financial requirements of the Part 1 Proposal are described in Section IV.3 of the RFP Rules and are summarized below.

In its Part 1 Proposal, a Bidder must name the Entity on whose financial standing the Bidder is relying. The Bidder can either: (a) enter the name of the Bidder, indicating that the Bidder is relying on its own financial standing (in which case the Bidder is the “Entity”); or (b) enter the name of a different party, indicating that the Bidder is relying on the financial standing of another party (in which case a party other than the Bidder is the “Entity”). The Entity under option (b) above is called the “Guarantor”. There are additional requirements for Bidders applying under an Agency Agreement that are described in Section IV.8 of the RFP Rules.

In its Part 1 Proposal, a Bidder must provide, for the Entity, any available ratings, including the type of rating, from the following rating agencies: S&P Global Ratings, Moody’s Investors Service, and Fitch Ratings. For the avoidance of doubt, a Bidder that selects option (a) above submits ratings for the Bidder; a Bidder that selects option (b) above submits ratings for the Guarantor.

In its Part 1 Proposal, a Bidder must additionally provide certain financial information related to the Entity, namely: (i) the most recent audited annual financial information (if available, the SEC Form 10-K should be submitted to fulfil this requirement); (ii) the most recent quarterly financial data (if available, the SEC Form 10-Q should be submitted to fulfil this requirement); and (iii) any public financial disclosure made since the release of the entity’s most recent financial data (if available, SEC Forms 8-K should be submitted to fulfil this requirement). A Bidder that selects option (a) above may not provide financial information related to a parent company to meet this requirement.

A Bidder that selects option (a) above and for which the required financial information is not available in whole or in part for the Bidder must state this fact. A Bidder that selects option (b) above must provide financial information for the Guarantor.

Detailed instructions for the submission of the Bid Participation Fee will be distributed by the Procurement Administrator to account holders no later than the opening of the Part 1 Window. If you would like to register for an account to submit a proposal, please register here: https://www.ipa-energyrfp.com/contact-us/qualification-registration/

The following is a summary of certain paragraphs of the (AIC) Capacity Agreement and RFP Rules. It is the responsibility of the bidder to review and understand the governing documents related to the Fall 2024 BEC RFP. The governing documents are posted to the procurement website and include the contract documents, including the (AIC) Capacity Agreement, posted on July 16, 2024, and the RFP documents, including the RFP Rules, posted on July 17, 2024. Capitalized terms are defined in the governing documents.

A Product in the procurement of capacity for AIC’s portfolio is a Zonal Resource Credit (“ZRC”), as such term is defined in MISO’s Business Practice Manuals and MISO’s Open Access Transmission, Energy and Operating Reserve Market Tariff, for a Season. It is the responsibility of the Seller to deliver ZRCs to the Buyer. A “Bid” for a Capacity Product includes a price, in $/MW-day, for at least one ZRC for a given Season of a Planning Year for which ZRCs are procured. A Bid also includes the number of ZRCs to which the price applies and the Local Resource Zone (“LRZ”) of the ZRCs. MISO defines ten (10) LRZs. The price in the Bid is the price that the Bidder is willing to accept to deliver to AIC for the given Season and Planning Year the quantity of ZRCs from the LRZ specified in the Bid. Please see FAQ-BEC-1 and FAQ-BEC-2 for a description of the payment adjustment under the (AIC) Capacity Agreement should ZRCs be associated with a LRZ outside of LRZ 4 (the “Compliance Zone”).

ZRCs must qualify to satisfy the resource adequacy requirements in each LRZ of Module E of the MISO Tariff. As described in Paragraph 1. Performance, Title, & Delivery, Seller shall be responsible for the proper registration in MISO of the Planning Resource(s) from which the Product originates (each a “Contract Planning Resource”). Seller shall also be obligated to (i) meet and perform, or cause a third party to meet and perform, all of the obligations of the MISO Documents associated with such Contract Planning Resource(s) and (ii) ensure that the Contract Planning Resource(s) remains available and qualified as a Capacity Resource and participates in the MISO market in accordance with the MISO Documents during the entirety of the applicable Season and not have a status change to “retired” or “suspended” or similar designation. Seller shall be responsible for any costs or charges imposed on or liabilities associated with such obligations or Seller’s failure to meet and perform such obligations, including any costs or charges resulting from Buyer’s procurement of replacement capacity.

Yes, MISO’s FinSched is the accepted method for clearing transactions.  The Seller is responsible for creating a Day-Ahead Contract in the DART Market User Interface (“MUI”) with the Contract type option field populated as PureFinancial.  Any blocks awarded through the procurement process will be scheduled under this MISO Contract and then confirmed by the Buyer.

If you are a winning bidder in this Fall 2024 BEC RFP, for a given Company, you must execute a new supplier contract regardless of whether you are a winning supplier or not from a prior procurement event. The contract execution process is fully described in Paragraph VI.2.18 of the RFP Rules and summarized below.

By 12 PM CPT (1 PM Eastern Prevailing Time) on the third business day after the ICC decision, winning bidders must execute the signature pages of the partially executed applicable supplier contracts and related documents and send such fully executed signature pages to the Company electronically. Upon execution of the applicable supplier contracts and related documents in counterparts by both parties, such supplier contracts and related documents are fully executed.

Winning bidders must also meet the creditworthiness requirements under the applicable supplier contracts by 12 PM CPT on the third business day after the ICC decision.

Winning bidders in the AIC Energy procurement event wishing to rely on the financial standing of a Guarantor must provide a fully executed guaranty to AIC electronically by 12 PM CPT on the third day after the ICC decision. Bidders must use the standard form of guaranty, “Form of Guaranty”, and may incorporate the optional changes for AIC. The optional changes for AIC are in the documents named “Schedule 1 to the Form of Guaranty” and “Schedule 2 to the Form of Guaranty”. If this bidder is already a supplier to AIC from a prior procurement event, they may not amend their existing Guaranty and must issue a new Guaranty.

Winning bidders in the ComEd procurement event wishing to rely on the financial standing of a Guarantor must use the standard form of guaranty, “Schedule 2 to Collateral Annex (Guaranty)”, and may incorporate the optional changes for ComEd. The optional changes for ComEd are in the document named “Optional Changes to the Form of Guaranty”. If the winning bidder is already a supplier to ComEd from a prior procurement event, they can amend their existing Guaranty and are not required to issue a new Guaranty.

A Bidder may also meet the collateral requirements of the (AIC) Confirmation Agreement and (ComEd) Master Agreement by posting cash or using one of two options for the Post-Bid Letter of Credit available under each of the applicable supplier contracts. All documents referenced are posted to the Final Materials page of the procurement website.

The Bid Assurance Collateral Instructions for each Company will be distributed to Bidders shortly after the Part 1 Date, which is August 13, 2024. The instructions will include both information on how to submit cash as bid assurance collateral to the Companies as well as how to transmit the Pre-Bid Letter of Credit to the Companies.

Only minor changes were made to the Confirmation Sheet for ComEd between the Spring 2024 BEC RFP and the Fall 2024 BEC RFP. All other contract documents remain unchanged.

Redlines of these changes are posted to the Final Materials page of the Block Energy and Capacity section of the procurement website.

The IPA’s 2024 Electricity Procurement Plan (“2024 Plan”) provides for a Fall 2024 procurement of seasonal ZRC capacity products for AIC to satisfy a portion of its forecast requirements for the 2025-2026 and the 2026-2027 Delivery Years. Under the Fall 2024 procurement, the IPA will procure up to 75% of its forecasted capacity requirements for the 2025-2026 Delivery Year and up to 25% of its forecasted capacity requirements for the 2026-2027 Delivery Years. The capacity target for the Fall 2024 procurement will be based on the July 15, 2024 base case load forecast developed by Ameren Illinois, and as ultimately approved by the ICC.

The results from previous procurement events can be found on the procurement website. If you click on the “Previous RFPs” link on the left-hand side of the home page, you can find a list of previous procurements. The results are posted on each procurement’s archived page.

If you are a winning bidder in the upcoming procurement events, for a given Company, you must execute a new supplier contract regardless of whether you are a winning supplier or not from a prior procurement event.

For clarity, a block represents 25 MWs in each hour of a Product. A “Product” is a constant quantity of energy to be supplied to a Company at the delivery point specified by that Company in either the On-Peak Segment or the Off-Peak Segment of a specific month.

 A “Combination” is a grouping of two or more Products in a given Segment (and for a given Company). In the case of winning Bids approved by the Commission for a Combination, the Bidder will be required to pay the Supplier Fee amount times the number of blocks times the number of Products in the Combination.

For example, given the Supplier Fee for Energy Products under the Spring 2024 BEC RFP was $352 per on-peak block, if a Bidder had a winning Bid for one block of the On-Peak Jun24 to May25 Combination, the Bidder would pay $4,224 ($352 x 12 blocks (1 block for each of the 12 Products)) to the Illinois Power Agency by the seventh business day after the ICC decision.

Please email the Procurement Administrator at Illinois-RFP@nera.com to receive this information.

Please note that the information provided here is a simplification of the process and information related to performance assurance and each supplier is responsible to understand the terms of the applicable contract, including but not limited to Section 4 and Section 10 of the Collateral Annex as amended by the contract (in the case of AIC) or the Coversheet of the applicable contract (in the case of ComEd).

First, for calculating the mark-to-market value, initial marks are calculated using price quotes dated with the Bid Date. Marks will be calculated each business day beginning the day after the initial marks are provided and continuing until the final deliveries have been made. The Current Mark-to-Market Value will be computed by multiplying the appropriate energy volumes by the difference between the initial marks and the updated marks derived from updated price quotes.

Second, a Company’s total credit exposure to the supplier is calculated on an aggregate basis and includes credit exposure calculated under the applicable energy contract as well as credit exposure under any other supply contracts as set forth in Section I, Subsection A of Paragraph 10 to the Collateral Annex as amended by the applicable contract or coversheet of the contract. In the event the total exposure amount for any day is a negative number, the total exposure amount shall be deemed to be zero for such day.

If on any day, the collateral requirement (which is the total exposure amount less any unsecured credit granted or any performance assurance posted) after rounding up to the nearest $10,000 exceeds the Minimum Transfer Amount of $100,000, then a Company may require the supplier to post margin to cover the exposure in the form of a letter of credit or cash. The Companies will notify the supplier in the morning on any day that the supplier will be required to post margin to cover additional exposure.

Please note that for ComEd contact information is provided for Credit and Collateral questions regarding initial collateral requirements as part of the (ComEd) Master Agreement execution process.

A “Bid” for a Capacity Product includes a price, in $/MW-day, for at least one ZRC for a given Season of a Planning Year for which ZRCs are procured. A Bid also includes the number of ZRCs to which the price applies and the Source Zone of the ZRCs. The price in the Bid is the price that the Bidder is willing to accept to deliver to AIC for the given Season and Planning Year the quantity of ZRCs from the Source Zone specified in the Bid.

A Bidder that submits a Proposal to the BEC RFP must be a member of PJM in good standing (either as an Affiliate Member or as a Voting Member as these terms are defined by PJM) and/or must be a Certified Market Participant in MISO (as this term is defined by MISO) as of the opening of the Part 1 Window. A Bidder that is not able to meet this requirement cannot proceed further in the Proposal submission process.

A Bidder that currently is a Seller under the (AIC) Confirmation agreement, or under the (ComEd) Master Agreement, or under the (AIC) Capacity Agreement meets this requirement.

A Bidder that has been a Seller under the (AIC) Confirmation Agreement, or under the (ComEd) Master Agreement, or under the (AIC) Capacity Agreement pursuant to winning Bids in a procurement event under the BEC RFP or under the Standard Products RFP in 2016 or later also meets this requirement.

A Bidder that does not meet this requirement as a consequence of being a current or past Seller under an applicable supplier contract as specified in this paragraph must provide evidence that it is an Affiliate Member or a Voting Member in PJM and/or that it is a Certified Market Participant in MISO. A Bidder that participates in PJM or MISO through another entity, such as a scheduling agent, must provide evidence of its relationship with such other entity and must provide evidence that such other entity is an Affiliate Member or a Voting Member in PJM and/or that it is a Certified Market Participant in MISO.

The collateral requirement under each of the (AIC) Confirmation Agreement and the (ComEd) Master Agreement for the energy procurement events is based on a mark-to-market methodology. For the (ComEd) Master Agreement, this methodology is described in Schedule 3 (MtM Calculation) to the Collateral Annex. For the (AIC) Confirmation Agreement, relevant information is provided in Exhibit D – Collateral Annex and Exhibit E – Paragraph 10 to the Collateral Annex. There is not a minimum or maximum amount of performance assurance required on a per block basis.

Under the applicable supplier agreement, the bidder or a guarantor, if applicable, may be granted unsecured credit based on a creditworthiness assessment. The creditworthiness assessment is based on the Bidder’s (or Guarantor’s, as applicable) financial statements and credit ratings submitted with the Part 1 Proposal and the result of the assessment will be provided to the Bidder with the Part 1 Notification. If the Bidder is relying on the creditworthiness of a Guarantor, an executed guaranty acceptable to the Buyer must be provided.

Any required performance assurance may be posted in the form of cash or a letter of credit. The standard forms of the guaranty and the letter of credit are appended to each of the supplier agreements. There is a Minimum Transfer Amount, defined under the applicable supplier agreements, of $100,000 for each of AIC and ComEd (subject to rounding).

Please note that for the (AIC) Confirmation Agreement, a bidder should refer to the front portion of the Confirmation Agreement, and for the (ComEd) Master Agreement, a bidder should refer to the Cover Sheet of the (ComEd) Master Agreement, for amendments and elections to the EEI Collateral Annex and paragraph 10 to the Collateral Annex.

It is the responsibility of each bidder to review the terms of the applicable supplier agreement (for each of AIC and ComEd) posted to the Block Energy and Capacity Procurement section of the procurement website. Each bidder accepts these terms as a condition of its participation in the BEC RFP.

The post-bid process is discussed in Section VI.2 of the RFP Rules, and the contract execution process for each Company is fully described in Paragraph VI.2.18 of the RFP Rules.

The payment adjustment is based on the difference between the Auction Clearing Price from the MISO Planning Resource Auction (“PRA”) for the Source Zone associated with the ZRCs and the Compliance Zone (LRZ 4). Please see FAQ-BEC-1 and FAQ-BEC-2 for examples of the payment adjustment.

Yes, this is correct. Only ZRCs from outside the compliance zone are subject to payment adjustments under the term of the (AIC) Capacity Agreement.

Under the terms of the (AIC) Capacity Agreement, payments to Seller will only be adjusted to reflect an increased payment if the Source Zone ACP in a season is greater than the Compliance Zone ACP in that season where the Compliance Zone is LRZ4.

For purposes of the below example, the “ACP” refers to the Auction Clearing Price from the MISO Planning Resource Auction (“PRA”) for the Summer season for the 2025/2026 Planning Year and the Compliance Zone is LRZ4. The example below is hypothetical. The results of the 2025/2026 MISO PRA are not yet available.

No. of ZRCs delivered by Seller: 25 ZRCs for the Summer season from Zone 3
Average Winning Bid Price for the Summer season under the (AIC) Capacity Agreement: $10/MW-day
Payment to Seller = $10 x 25 ZRCs x 92 days = $23,000
MISO Summer 2025/2026 PRA Results:
LRZ 4 ACP = $6/MW-day
LRZ 3 ACP = $20/MW-day
Adjustment to Payment = ($20 – $6) x 25 ZRCs x 92 days = $32,200
Adjusted Payment = $23,000 + $32,200 = $55,200

Under the terms of the (AIC) Capacity Agreement, payments to Seller will be reduced if the Compliance Zone ACP in a season is greater than the Source Zone ACP in that season where the Compliance Zone is LRZ4. If the amount of the payment reduction is greater than the unadjusted payment, then Seller (not Buyer) will have to pay Buyer under the (AIC) Capacity Agreement. We provide 2 examples below to illustrate this point.

For purposes of the below examples, the “ACP” refers to the Auction Clearing Price from the MISO Planning Resource Auction (“PRA”) for the Summer season for the 2025/2026 Planning Year and the Compliance Zone is LRZ4. The examples below are hypothetical. The results of the 2025/2026 MISO PRA are not yet available.

Example 1: Where the adjustment results in a reduced payment from Buyer to Seller.
No. of ZRCs delivered by Seller: 25 ZRCs for the Summer season from Zone 3
Average Winning Bid Price for the Summer season under the (AIC) Capacity Agreement: $18/MW-day
Payment to Seller = $18 x 25 ZRCs x 92 days = $41,400
MISO Summer 2025/2026 PRA Results:
LRZ 4 ACP = $20/MW-day
LRZ 3 ACP = $6/MW-day
Adjustment to Payment = – ($20 – $6) x 25 ZRCs x 92 days = – $32,200
Adjusted Payment = $41,400 – $32,200 = $9,200

Example 2: Where the adjustment results in payment from Seller to Buyer.
No. of ZRCs delivered by Seller: 25 ZRCs for the Summer season from Zone 3
Average Winning Bid Price for the Summer season under the (AIC) Capacity Agreement: $10/MW-day
Payment to Seller = $10 x 25 ZRCs x 92 days = $23,000
MISO Summer 2025/2026 PRA Results:
LRZ 4 ACP = $20/MW-day
LRZ 3 ACP = $6/MW-day
Adjustment to Payment = – ($20 – $6) x 25 ZRCs x 92 days = – $32,200
Adjusted Payment = $23,000 – $32,200 = – $9,200  (i.e., payment from Seller to Buyer)