Dealing With RFPs

For the best chance of arriving at an optimal solution at a competitive price, a well-thought-out procurement program should be coupled with an open, competitive process such as a request for proposals (RFP). If the university decides to issue an RFP, either by itself or in conjunction with other institutions, there are a number of parameters the university should consider:

Whether the utility is seeking a total, campuswide renewable-energy solution, combining renewable energy with energy management or energy-efficiency initiatives, or a limited solution with defined parameters.
Whether to seek a specific type of renewable energy, or even a specific technology, such as solar PV, or to be open to all sources of renewable energy.
Whether to propose a specific ownership and transaction structure.
Whether to include a model PPA, lease or other transaction documents.
The deadline by which the new power generation resources must be available, and the term required for the resources.
The minimum and maximum capacities of energy deliveries to be sought, which will determine the size and cost of the facility.
The campus’ average usage and typical energy profile by time of day and season—many renewable energy technologies are intermittent, and they may not match the campus’ energy usage patterns; other energy resources will be needed to continue to meet demand in other hours.
The required experience, capabilities and qualifications of eligible bidders.

A more general request for proposals may elicit more highly creative responses from developers, but also is likely to generate proposals that are less well-thought out technically and less competitive commercially. With careful preparation by facility engineering staff, campus administrators and legal advisers, a more focused request is likely to yield a more robust response. If the basic technology and transaction structure has been determined, such as a third-party PPA for an on-site solar, wind or geothermal project, the RFP itself can include more information of the type needed to make an intelligent bid, and the RFP can be directed to a more select group of providers that are more likely to submit a meaningful response.

Finally, a well-crafted RFP can include model documentation, such as a facility lease and a model PPA, which will enable bidders to understand the precise terms of the deal and make a stronger proposal. Further, the university evaluation team will be able to make a more accurate comparison of proposals, since the proposals from different developers will be based on common assumptions working from common documents.