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for
Request for Greenhouse Gas Mitigation ("Offset") Project Proposals
Requesting Project Summary Information (Phase 1)

Notice Issue Date: November 15, 2002


New! Questions & Answers from the bidder's conference.

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Background on Seattle City Lightís Request

The Seattle Mayor and City Council adopted a resolution (Resolution #30359) directing its municipal electric utility, Seattle City Light ("Seattle"), to fully mitigate the greenhouse gas (GHG) emissions resulting from its operations. For information regarding our current and previous solicitation, visit our web site at www.cityofseattle.net/light/climatechange.

Bidders' Conference on Monday, December 2, 2002, 1:00-3:00 pm, Seattle

For more information about this Request for Proposals (RFP), attend the Bidders' Conference on Monday, December 2, 2002 in Key Tower, 40th Floor, Room 4080 located at 700 Fifth Avenue in downtown Seattle. The room is limited to 50 people. If you plan on attending, send notification no later than Monday, November 25, 2002 to Denise Sanders at denise.sanders@seattle.gov, or call (206) 684-3270, or write to Denise Sanders, Seattle City Light, Environment and Safety, 700 5th Avenue, Suite 3300, Seattle, WA, 98104. State your name, organization, phone, email address and how many from your organization will be attending.

Make sure you clarify if you will attend the conference or join by phone (see next paragraph).

If you cannot attend in person, you can call into the meeting through a conference line to join the Bidders' Conference. Callers will have to pay for their own long-distance charges and the call-in number is outside of Washington State. Callers must register to participate in the call by contacting Denise Sanders no later than Monday, November 25, 2002. Denise will contact all registered callers by email with the call-in number. If email is not available, Denise will contact you by phone. Follow the notification instructions above to register for the conference call.

What is Seattle soliciting?

Cost-effective proposals for GHG mitigation "offset" projects. An "offset" project directly avoids, displaces, or sequesters GHG emissions; will be implemented in the future; will only occur because of the Seattle funding; and will clearly quantify the GHG emissions reduction. Proposals are due on Thursday, January 30, 2003.

How many "offsets" is Seattle looking for?

Seattle estimates that it will be mitigating 386,000 metric tons of carbon dioxide equivalent (MgCO2e) annually. This RFP is intended to solicit project proposals to offset the Utility's GHG emissions in 2003 and 2004, for a total of 772,000 MgCO2e.

Which Greenhouse Gases (GHGs) Qualify?

Carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. Seattle uses the Intergovernmental Panel on Climate Change's (IPCC) "global warming potential" to evaluate the carbon dioxide equivalent for the GHG gases other than carbon dioxide. See the Appendix.

How many proposals will Seattle eventually select?

Seattle intends to contract for three to 10 offset projects totaling 772,000 metric tons of carbon dioxide equivalent (MgCO2e).

How many tons should the projects offer?

The sizes of the projects are expected to range from 50,000 to 350,000 MgCO2e. Local projects* will be allowed to offer fewer tons than 50,000 MgCO2e.

How much will Seattle pay per ton?

Seattle expects to pay a total average of $4.00/MgCO2e or less for all projects combined. Projects that are most competitive will have costs per ton that are below $4.00/ton. Projects with costs per ton that are greater than $10/ton are discouraged. However, local projects* will be given considerable flexibility on the cost per ton, especially for local projects with strong co-benefits (additional benefits beyond the GHG reductions).

*What defines the preference for Local Projects?

Local project preferences are for Seattle, King County, the Puget Sound region, Washington State, and the Northwest. Proximity to Seattle is preferred.

What is the Selection Process?

There are two phases. This Request for Proposals (RFP) is for the Phase 1, 10-page proposal plus a coversheet, a budget spreadsheet and a spreadsheet showing the calculations of GHG emission reductions. For projects selected for Phase 2, additional instructions will be provided.

What is the Schedule?

Bidders' Conference: Monday, December 2, 2002, 1:00-3:00pm, Seattle, WA

PROPOSAL DEADLINE: MUST BE RECEIVED BY THURSDAY, JANUARY 30, 2003, 5:00PM (PACIFIC TIME)

Anticipated Schedule Thereafter:

February 7, 2003

Seattle will acknowledge receipt of Phase 1 Proposals

April 2, 2003

Seattle will notify projects selected for Phase 2

June 2, 2003

(5 pm, Pacific Time)

Phase 2 Proposals due

August 1, 2003

Seattle will notify projects selected to enter negotiations for contracts

Fall 2003 and Winter 2004.

Seattle goal for signing contracts

Seattle will make every effort to meet this schedule yet reserves the right to modify the process and schedule.

 

DISCLAIMER: This RFP is not an offer by Seattle to purchase any rights, goods or services, and submission of project proposals does not create any rights whatsoever. Seattle is free to accept or reject any project proposal, and is not bound to accept the economically most favorable proposal, or any proposal at all. Seattle, and its directors, officers, public officials, agents, employees or assigns are not liable at law or at equity to any project or participant or any other party for any decision by any of them regarding submission, acceptance, rejection or modification of a proposal, or in any other connection with this RFP. All costs directly or indirectly related to preparation of a proposal or submission shall be the sole responsibility of, and shall be borne by, the developer of the project proposal.

 

What are the proposal requirements?

Timing of Project Implementation: Seattle will consider only projects where mitigation measures will be implemented in the future, subsequent to contract execution. Seattle will not consider projects where mitigation measures have been implemented prior to contract execution.

Additionality: Seattle will only fund projects where mitigation measures occur because of funding from this RFP. Projects for which the applicant or other party derives benefits, including financial benefits, other than those relating to GHG reduction benefits, are eligible.

Regulatory Surplus: Seattle will only consider projects where the GHG reduction benefit is over and above what is required by law. An emission reduction is surplus if it is not otherwise required by current regulations. In addition, GHG reduction credits from projects that are selected cannot be applied to future regulatory obligations.

Voluntary Programs: Seattle will only consider projects where the GHG reduction benefit is over and above what is provided for voluntary programs such as the U.S. Department of Energy's 1605(b) program or the California Climate Action Registry. Seattle will consider exceptions to this requirement as long as projects can guarantee that project-related credits are attributed to Seattle alone.

Baselines: Proposals must describe a "Baseline" projection that does not include the proposed project and a "Project Case" projection. Proposals must describe the assumptions and methodologies used to quantify each. The difference between the two is the projectís GHG reduction benefit. Proposals must show how the Baseline projection changes over time if changes from business-as-usual could be reasonably anticipated during the project life. Seattle will review the proposed Baseline and Project Case projections, and may use its own judgment to modify them for the purposes of evaluating projects.

Leakage: This occurs when a projectís GHG reduction benefit is lessened because the project has led to other GHG emission increases. An energy example includes reduction in use of power for a facility that then uses that saved power for other on-site activities. A transportation example includes reduction of congestion that increases efficiency and therefore reduces emissions but is counteracted by an increase of traffic that fills up the less-congested road system. A vehicle efficiency example includes incentives for more fuel efficient vehicles counteracted by an increase in driving because of the increased miles per gallon. A forest sequestration example is when proposed acres of trees are set aside for sequestration, but other acres of trees are cut down instead.

Proposals must describe how leakage is addressed by the project, both in terms of project activities to minimize leakage and in terms of adjustments to the projectís GHG reduction benefit. Seattle will review and may use our own leakage factors when evaluating projects.

Range of Uncertainty: Proposals must describe important risks and risk mitigation strategies, and provide an estimate of the range of uncertainty around the expected carbon dioxide benefit. Seattle may use adjustment factors other than those proposed by the developerís emissions reduction estimates.

Units of Measurement: All GHG reduction benefits are to be presented in metric tons (Mg) of carbon dioxide equivalent (CO2e): MgCO2e. See the Appendix for conversion factors to be used for MgCO2e, fossil fuel, U.S.-based electricity grid factors, 100-year Global Warming Potentials, and weights, volumes and densities. Proposals must justify any variation from these figures. Seattle reserves the right to apply its own conversion factors for the purpose of proposal evaluation.

More than One Proposal: Entities may submit more than one proposal but must submit them individually following the criteria of this RFP.

International Projects: Seattle requires an international project to have both a strong U.S. partner and a strong international partner in the host country. The U.S. partner must co-sign the proposal and any offset contract. The U.S. partner will be liable for all costs related to breach of contract and contract delays. Host country approval for international projects is strongly encouraged.

Retirement of Credits: Seattle plans to "retire" the offsets they acquire, holding them in perpetuity for the benefit of Seattle. Seattle may use these credits in any manner allowed under any future greenhouse gas regulatory or voluntary system that may be put into place. The project will not be eligible to receive allocation or credit in the future in another regulatory or voluntary setting for the offsets acquired by Seattle. Seattle will not consider offsets that have already been allocated or awarded credit for carbon dioxide or greenhouse gas emissions benefits in another regulatory or voluntary setting such as the U.S. Department of Energy's 1605(b) program or the California Climate Action Registry.

Monitoring and Verification Plans: The purpose of the Monitoring and Verification (M&V) Plan is to define how the carbon dioxide benefit will be quantified during the life of the project. The quality of the proposed M&V Plan is a component of project evaluation. Monitoring and verification are the responsibility of the project, not Seattle. The use of mutually-agreed upon third party verification is required.

All projects that are chosen for contracting will be required to include an M&V Plan. These plans may be developed with Seattle during the contracting phase of the RFP. M&V Plans do not need to be submitted as part of this Phase 1 Proposal, but a description of the M&V process must be included. Please describe 1) procedures to be employed, 2) how the ongoing monitoring and verification will be funded, and 3) the time frame and frequency over which the monitoring and verification will occur.

Project Finances Other than Seattle: If the project anticipates having funding sources in addition to Seattle, then the sources of those funds must be identified to the greatest possible extent. Either specific or expected additional funding sources must be identified.

 

What other additional information or guidance is available?

Co-Benefits: Seattle prefers projects with environmental, health, and socioeconomic co-benefits, and will request information on co-benefits from projects. Special consideration may be given to projects with excellent co-benefits.

Permanence: Seattle prefers projects that permanently avoid or displace GHG emissions, such as energy-related projects, over projects that temporarily sequester GHG emissions.

Guarantees: Seattle prefers projects that provide guarantees, especially carbon benefit guarantees. Guarantees are especially important for sequestration projects, and would provide important support for any project proposal.

Replicability and Expandability: Projects that can be replicated in or expanded to other sites or areas are encouraged.

Options, Alternatives: To supplement specific project proposals, projects may offer unspecified alternative sites or approaches to the project. For example, if a proposal identifies a specific site for a project and the projects know that other sites may become available, then the proposal may leave open the possibility that other, unidentified sites, may become the focus of specific contract negotiations.

Types of Projects: Seattle will consider a broad range of offsets projects. The types of projects include, but are not limited to, energy efficiency, renewable energy (solar, wind, geothermal, biomass, other), fuel switching, CO2 sequestration, flue gas sequestration, materials substitution, recycle/composting programs, coal mine methane, landfill methane, biogas methane (animal waste and waste water), alternative transportation fuels, vehicle emissions reductions and transportation initiatives.

Portfolio Diversity: Seattle considers it important to acquire a portfolio of diverse project types.

Eligible Projects: Seattle will accept proposals from non-profit and for-profit corporations, government agencies, national laboratories, individuals, and combinations of these parties. Multiple project partners are encouraged.

Discounted Value for Projects with Long Implementation Time: Seattle places a priority on projects that deliver the GHG emissions reduction as close in time to 2003 and 2004 as possible. For projects that take decades to deliver the GHG emissions reduction or sequestration, Seattle expects to discount the value of the GHG offset. Phase 1 proposals do not need to include this calculation in their GHG reduction calculation. This will be addressed in Phase 2 or during contract negotiations.

Projects as Programs: Seattle will accept proposals that administer a program or package of GHG reduction benefits. Specific sites, facilities, units or operations may not be necessary as long as specific performance milestones guarantee the GHG reduction benefit. An energy example includes the installation of a set amount of compact fluorescent light bulbs in locations to-be-determined. A transportation example includes a guarantee of reduced vehicle miles traveled (VMT) within a transportation corridor without identifying the specific drivers who have reduced their VMT. A materials substitution example includes a guarantee of reduced use of virgin materials in commercial products but without specified end users. Programs must have a plan for clearly documenting their GHG reductions.

Assignment and Sale: While the primary goal is to "retire" credits, Seattle reserves the right to assign or sell GHG reduction benefit acquired as a result of this RFP.

Partnering: A project may have multiple potential funders but only one (Seattle) funder who seeks to claim the carbon credit. Since many offset projects have multiple benefits -- such as reduction of criteria pollutants, lower energy costs, additional environmental benefits -- the carbon reduction benefit can be isolated and paid for by Seattle. This partnering approach can be used to lower the total cost per ton of carbon offset.

For example: an energy efficiency project may reduce criteria pollutants and energy costs. Some funding partners want the pollution credit (sulfur oxides or nitrogen oxides), the project host gets the reduced energy costs, and Seattle gets the carbon dioxide reduction. The project costs $300,000. Each partner pays $100,000. Seattle funds 33 percent of the project but gets 100 percent of the carbon reduction, thus substantially reducing the cost per ton for the project.

Restrictions on Use of Seattle Funds: Seattle will not provide loans or long-term escrow accounts. Seattle will only pay on proof of delivery of services, activities, or products that result in reductions in GHG. Delivery can include construction or purchases where the GHG reduction subsequently follows, staff time for the administration of a program, or other activities or products that are clearly defined and acceptable to Seattle.

Public Disclosure: Seattle is bound by the Washington Disclosure Act. Specific projects will be notified about any public disclosure requests related to their project before information is released.

Indemnification Coverage: Projects that are selected for contracting will be required to provide Seattle with indemnification coverage.

What is the format for the Phase 1 proposals?

Proposals are to be limited to a one-page cover sheet (described below) and a 10-page proposal of text. The 10-page proposal must have one inch margins and a twelve-point font. In addition, two appendices are required, one to display the project budget and one to display the project carbon dioxide emissions benefit calculations. It is strongly preferred that the cover sheet and the 10-page proposal are transmitted in Microsoft Word 97 or compatible format, while the appendices are to be transmitted in Microsoft Excel 97 or compatible format. Responses must be in English: We will not accept proposals in other languages.

One-page Coversheet:

Present the following 17 items in this order and following this format:

1. Type of Project. Choose one or more of the following: energy efficiency, renewable energy (solar, wind, geothermal, biomass, other), fuel switching, CO2 sequestration, flue gas sequestration, materials substitution, recycle/composting programs, coal mine methane, landfill methane, biogas methane (animal waste and waste water), alternative transportation fuels, vehicle emissions reductions and transportation initiatives. Or other and describe.

2. Type of Greenhouse Gas. Choose one or more of the following: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

3. Location of Project

4. Proposing Organization(s) Name

5. Proposing Organization(s) Address

6. Proposing Organization(s) Web Site

7. Contact Person Name

8. Contact Person Phone Number

9. Contact Person Fax Number

10. Contact Person E-Mail Address

11. Total Project Cost (U.S.$)

12. Amount of Money Requested (U.S.$)

13. Amount of Carbon Dioxide Emission Benefit Proposed (MgCO2e)

14. Price of Carbon Dioxide Emissions Benefit Proposed (U.S.$/MgCO2e)

15. Project Implementation Starting Date

16. Project Implementation Completion Date

17. Project Summary (No more than 50 words)

 

10-Page Project Proposal and Appendices:

The 10-page (or less) proposal must include the following. No specific formatting is required except for a minimum of one-inch margins and 12-point font.

  1. A description of the project.
  2. Identify known or expected sources of funding.
  3. Define the role(s) of each funder and organization involved.
  4. Include qualifications for participating organizations and/or individuals.
  5. Address or adhere to all items listed in the "What are the proposal requirements?" section above.
  6. Address Co-Benefits, Permanence, Guarantees, and Replicability/Expandability listed in the "What other additional information or guidance is available?" section above.
  7. In addition to the 10-page document above, proposals must include:

  8. Appendix A: Present the project budget, specifying specific sources and uses of funding, identifying the capital and operating costs. Include costs for monitoring and verification throughout the project life.
  9. Appendix B: Present the project MgCO2e benefit calculations, including the Baseline projection and the Project Case projection. (See "Baselines" above.) Address leakage and the range of uncertainty in the calculation of the MgCO2e benefit. Include a breakdown of the accrual of the MgCO2e benefit on an annual basis.

 

Where are the proposals submitted?

Proposals are to be transmitted to Doug Howell and Corinne Grande at Seattle City Light in two formats, email and hard copies, to:

1. By e-mail to doug.howell@seattle.gov and corinne.grande@seattle.gov

2. Three hard copies by mail to Climate Change RFP, Seattle City Light, Strategic Planning Office, 700 Fifth Avenue, Suite 3300, Seattle, WA 98104.

 

What if we have questions during this solicitation period?

Questions and answers will be posted on our website at www.cityofseattle.net/light/climatechange. It is the responsibility of the project developer to keep informed regarding clarifications by visiting this Web site. Questions and answers about this offset solicitation are posted there. Please review these Q & A prior to contacting Seattle. If your question is not addressed on the website, you may contact Corinne Grande by email at corinne.grande@seattle.gov, or by phone at (206) 386-4517, or by letter at Corinne Grande, Seattle City Light, Environment & Safety, 700 Fifth Avenue, Suite 3300, Seattle, WA 98104.


 

Appendix

Fossil Fuel Conversion Factors -

(US Department of Energy, Energy Information Agency, http://www.eia.doe.gov/oiaf/1605/factors.html)

Fuel Type

CO2 Content

CO2 Coefficient

 

(Pounds CO2

per Unit Volume or Mass)

(Pounds CO2

per Million Btu)

     

Natural Gas

120.593 lb/103cf

117.080

Gasoline (conventional)

19.564 lb/gal.

156.425

Distillate Oil/Diesel

22.384 lb/gal.

161.386

Residual Oil

26.033 lb/gal.

173.906

LPG/Propane**

12.669 lb/gal.

139.178

Kerosene/Jet fuel

21.537 lb/gal.

159.535

Anthracite Coal

3852.16 lb/short ton

227.4

Bituminous Coal

4,931.3 lb/short ton

205.3

Sub-bituminous Coal

3,715.9 lb/short ton

212.7

Lignite Coal

2,791.6 lb/short ton

215.4

1 pound of carbon in carbon dioxide = 3.6667 pounds carbon dioxide, measured at full molecular weight (CO2)

Electricity Carbon Dioxide Conversion Factors

CO2 Intensity Factors for Marginal Electricity Generation for US Regions

EPA Region

Pounds of CO2 per kWh

Region 10: OR, WA, ID

1.202

Region 9: CA, AZ, NV

1.240

Region 8: CO, UT, MT, WY, ND, SD

1.244

Region 7: MO, IA, KS, NE

1.404

Region 6: TX, LA, OK, AR, NM

1.186

Region 5: OH, IL, MI, IN, WI, MN

1.988

Region 4: FL, NC, GA, TN, AL, SC, KY, MS

2.215

Region 3: PA, VA, MD, WV, DC, DE

2.096

Region 2: NY, NJ

1.679

Region 1: MA, CT, ME, NH, RI, VT

1.726

   

 

CO2 Intensity Factor for New Natural Gas Fired Electricity Generation

Combined cycle combustion turbine: 0.81 Pounds of CO2 per kWh

Global Warming Potentials (GWP) Relative to Carbon Dioxide
Please see Table 3, of the Intergovernmental Panel on Climate Change (IPCC) report at Potentials Table This file is in Adobe Acrobat .pdf format, and requires Acrobat Reader for viewing, downloadable from adobe.com: Get Acrobat Reader This link goes to a site which is not hosted on the CityofSeattle.net

Other Conversion Factors

Weight

1 kilogram = 2.205 pounds

1 short ton = 0.9072 metric tons

1 metric ton = 1.1023 short tons = 2,205 pounds

Volume

Liquid Fuels

1 barrel 42 US gallons

1 barrel 159 liters

1 cubic meter 6.289 gallons

Gaseous Fuels

1 cubic meter 35.315 cubic feet

Energy

Natural Gas

1 cubic foot (cf) = 1,030 Btu

1 therm = 100 cf = 103,000 Btu

1 Mcf = 1,000 cf = 1.03 million Btu

Density

1 thousand cubic feet of methane/natural gas = 42.28 pounds

1 thousand cubic feet carbon dioxide = 115.97 pounds

1 metric ton natural gas liquids = 11.6 barrels

1 metric ton alcohol = 7.94 barrels

1 metric ton liquefied petroleum gas/propane = 11.6 barrels

1 metric ton aviation gasoline = 8.9 barrels

1 metric ton motor gasoline = 8.53 barrels

1 metric ton kerosene = 7.73 barrels

1 metric ton distillate oil = 7.46 barrels

For other conversion factors, please see the Environmental Protection Agency Web site: www.epa.gov/ttn/chief/eiip/eiip_ghg.htm Vol. VIII link, Tables 1.4

Sources: www.epa.gov/ttn/chief/eiip/eiip_ghg.htm. For CO2 Intensity Factors: Regional Electricity Factors Final Report, US Environmental Protection Agency, Atmospheric Pollution Prevention Division (APPD), November 16, 1998, contract no. 68-W6-0050. For Other Conversion Factors: http://www.eia.doe.gov/oiaf/1605/ggrpt/appendixf.html.


 

Questions and Answers from the Bidder's Conference:

1. Will there be information on Seattle's web site about the contracts that Seattle has signed or is currently negotiating for GHG offsets?
No. Seattle has not yet signed any contracts. When the first contract is reviewed by the City Council, expected in January 2003, sections can be available for public review.

2. What types of projects did Seattle select for negotiations in its previous RFP? Were any outside of Seattle?
Seattle has been negotiating for projects that involve efficiency improvements, co-generation of electricity, materials substitution, and forest sequestration. Much of the offset activity would take place outside of the Seattle area. In this solicitation, Seattle will put a priority on local projects. This is not to the exclusion of other projects

3. Does Seattle have a preferred protocol for calculating carbon dioxide equivalent?
Yes. We recommend using the Intergovernmental Panel on Climate Change (IPCC) Global Warming Potential factors. Please see Table 3, page 27 of 63, of the IPPC report at www.ipcc.ch/pub/wg1TARtechsum.pdf

4. Do the offsets have to comply with Kyoto standards?
Seattle is striving to be consistent with the Kyoto standards, but those are still being developed. Seattle is also following standards for offsets being developed by states and at the national level.

5. Does the term "in the future" related to an activity or project mean 2-3 or 20-30 years?
We will review on a project by project basis. Seattle prefers projects that deliver offsets as close in time to 2003/04 as possible.

6. How would you handle the discounting of a 70-year forestry project?
Phase 1 - Seattle would do qualitative evaluation of the impact of discounting. Phase 2 - Seattle has not yet determined an exact formula, and it may differ from project to project, but we anticipate that the calculation would be similar to the concept of economic discounting ("time value of carbon"), perhaps at a rate of one to two percent per year for mitigation that occurs beyond some specified future date. If possible, Seattle prefers to address climate change now, at the time emissions occur.

7. Would discounting start immediately?
It's possible that discounting will be primarily applied to offsets delivered ten years or more from 2003/04.

8. What if offsets result from compliance with a regulation, but that regulation was not related to GHG reduction?
To the extent that the offsets would have happened anyway, even if that was not the intent of the law, Seattle would not consider them to be additional. A proposal could present a case for this, but it would be difficult.

9. What if the proposal is to pay for an existing program that was going to lose its original source of funding?
This would be a difficult case for a proposal to make. Seattle would have difficulty determining the certainty and reason funding was going to be lost. The intent of the solicitation is not to be an alternative funding source for programs that are already in place.

10. What assumptions and calculations should be used to determine the baseline?
Baselines have to be determined on a case by case basis. Explain in the baseline description what the GHG emissions would be without the proposed project. Include, to the extent possible, changes in regulation or technology that will impact GHG emissions in the future without the proposed project. Seattle will hire outside experts, as needed, to help review the assumptions in the baselines.

11. How critical is Monitoring and Verification to the proposal?
Monitoring and Verification is an important part of the project, and Seattle will want information about the M&V plan in the Phase 1 proposal, but will not require an actual plan until the Phase 2 or negotiations process. Seattle would prefer that the bidder prepare an M&V plan as part of the negotiating process, so that it can be agreed to by the bidder and Seattle before a contract is signed. Seattle may accept a contract in which the M&V plan is a deliverable, to be completed by a specified date. If a mutually acceptable M&V plan cannot be developed by that date, the contract would be terminated. Specifics will depend upon the type of project.

12. How far out in time would Seattle discount offsets in long-term projects?
Seattle is most likely to discount any offsets produced beyond a decade after 2003/04. There is not one definitive answer on the discount rate, but most likely it would be one to two percent per year.

13. Of the six greenhouse gases that Seattle would consider for offsets, is there a priority list?
No, Seattle does not have a preference. We are more concerned about achieving a diverse portfolio of competitively priced projects and the other co-benefits that come with GHG reduction.

14. Will Seattle develop a quantitative evaluation of co-benefits in Phase 2?
No, evaluation of co-benefits will be qualitative. If the co-benefits can be sold to other parties, thus reducing the cost of the GHG offsets to Seattle, that would make the proposal stronger.

15. Is Seattle interested in purchasing the first five years of offsets from a project with a longer lifetime?
Yes. The sooner Seattle receives the offsets, the better. However, the additionality test must still be met. Seattle wouldn't buy the first five years of offsets from a project that is already planned and would be implemented without our funding.

16. How much information will be required for a "programmatic" proposal, where details such as site location may not be available? Is cost per ton still required?
Certainly we would want a "best estimate" and range of what costs per ton would be. It would be helpful to understand the key drivers of possible differences in cost. Itís easier to review a more specific proposal than one that is less specific. Seattle might take a proposal into Phase 2 and work with the proposer to clarify the cost.

17. Farming techniques that store carbon in soil: some farmers have been doing these practices for years; others are just beginning to adopt these practices. Does Seattle have a preference?
Seattle will only purchase offsets created from future actions that would not have occurred without our funding. Projects that are already underway or will be started regardless of or before a contract signing would not be additional.

18. Will Seattle pay for renewable energy in conjunction with CO2?
Seattle is more likely to purchase the environmental attributes or "green tags" separate from a power purchase. This is not a solicitation for energy output, per se. We have been following the market for "green tags" and have a sense of what their value may be.

19. Please explain the reference to the Klamath Falls plant.
Seattle buys electricity from the Klamath Falls plant, a natural gas combustion turbine. The GHG emissions associated with that energy production will be part of the mitigation that Seattle will buy for 2003/04. See the web for City Council resolutions related to GHG mitigation.

20. Compare discounting of a renewables project to one that is process orientated. Is it location specific?
The GHG intensity factors for electricity vary among different parts of the country, depending on the resource mix of the region. Any project in which offsets are the result of new electricity generation or reduced electricity use should use the appropriate regional factor. See the Appendix for the intensity factors. If the proposal can make a strong case that it should use another intensity factor, that will be considered.

21. Would SCL purchase offsets for years 2003 - 2008 from a project where the offsets from years beyond 2008 had already been sold.
This would probably not meet our additionality requirement, since the project has sold offsets already and is already going to happen without Seattle funding. This is closely related to an earlier question. The difference is in the timing and whether the project would happen without our funding. SCL would buy early years' offsets and allow the bidder to sell later year offsets to others, but the bidder would have to make a persuasive case that Seattle funding was necessary to make the project happen.

22. How would Seattle evaluate a program proposal when the timing of program elements isn't clear?
Seattle will consider these on a case by case basis. We would negotiate a schedule of accomplishments ("milestones") toward meeting the program goals and producing GHG offsets and write it into the contract. If the milestones aren't met, the contract could be terminated.

23. What if we have a program that is operational now and the proposal is for an expansion of the program?
That is related to an appropriately defined baseline. We would need to review the credibility of that analysis and be sure that the expansion would not have happened without our funding and that it will result in increased GHG offsets over the current program.

24. In the case of a project where green tags are involved, would Seattle do that under one contract?
In recent renewable contracts, Seattle has purchased all the environmental attributes as one bundle. We have never really thought about purchasing environmental attributes separately. If there are GHG offsets, plus renewable energy (for example in a landfill methane project where the GHG impact of burning methane and producing CO2 would be less than allowing methane to go into the atmosphere), we could do two separate contracts.

25. How does the LEED building standard relate to Seattle's requirement that offsets are surplus to regulatory or voluntary actions?
It depends. The City of Seattle has a voluntary policy that all new City buildings will meet the LEED Silver standards. Offsets resulting from achieving that standard may not be additional. The proposal would have to show that the activity would not happen without Seattle funding. (Note - if the activity is used to meet LEED, but is not declared in a GHG program, there may not be a double counting issue in the strictest sense of GHG accounting, but there may be the issues of two organizations - Seattle and the developer - taking "credit" (GHG and positive PR) from the same activity). Any GHG reductions purchases by Seattle would require the proposer to transfer all rights to those credits to Seattle.


26. If the proposals contain proprietary information will it be kept confidential?
If proprietary information is clearly marked confidential, Seattle will endeavor to keep it confidential. Seattle, however, is subject to the Washington Public Disclosure Act and is not able to ensure confidentiality. Instead, Seattle is typically able to agree to provide notice to a respondent in the event a third-party requests documents marked confidential by that respondent. This notice would typically allow the respondent a short time frame to request a temporary restraining order (TRO) restraining Seattle from producing such confidential documents. Contact Seattle before submitting the proposal if there are specific concerns, and we will check with our Law Department.

27. We would like to propose a project of biogas digesters. This would capture methane and burn it to produce electricity. Methane has a greenhouse warming potential 21 times that of CO2. Would this be a fundable project idea under the current RFP?
Yes, if the proposal clearly shows how the project will reduce overall GHG emissions (calculated in CO2 equivalent units) compared to without the project. Show the baseline (without project) GHG emissions of the methane release (convert into CO2 equivalent) and the GHG emissions with the project. The decrease in emissions, in CO2 equivalent, are the offsets.

28. Using the $4 per metric ton figure stated in the RFP, an offset project involving electricity would only receive payment of $0.0022/kWh .
($4/metric ton)x(1 metric ton/2200 pounds)x(1.2 pounds CO2/ kWh) = $0.0022/kWh
(The calculation uses CO2 Electricity Conversion factor listed in the RFP Appendix for a project in Region 10.)

At the $4/metric ton rate, renewables and other electricity displacement projects would not get much money per kWh. The green tag market would probably offer a higher price. Renewable and efficiency projects can benefit from GHG offset funding if there are other funding sources or cost benefits as well. For example, an efficiency project in a manufacturing process may save the manufacturer money, and added with the GHG offset funding may be economically feasible.

29. Precisely define additionality. Does Seattle use environmental additionality as a selection criteria as well?
Seattle considers a project to be additional if it would not have occurred without Seattle's funding. Other funders can support the project, but not claim the GHG offsets if they are sold to Seattle. (The term additionality is still being defined among various groups dealing with GHG issues, and there is considerable debate about what 'types' of additionality should be required for GHG credits. Seattle has chosen its definition based on a best assessment of what will result in a credible offset.)

30. Are we able to sell you the pre-2008 (Kyoto-mandated) GHG credits, which are already being generated and verified?
No, offsets do not qualify as additional if they are from projects that will proceed regardless of Seattle funding.

31. Define very precisely the steps you consider the 'milestones' of your project implementation, after which you can disburse financing.
Typically, Seattle expects the milestones to be actual delivery of the offsets. However, in certain circumstances, Seattle may be willing to agree to other milestones that equate to an actual deliverable. Each case will be considered individually and the milestones would be established as part of the contract negotiations.

32. Are there any specific international projects that Seattle would give priority to?
No. Seattle would evaluate the merits of international projects using the criteria listed in the RFP, with special emphasis on having a strong US partner and good risk mitigation and monitoring and verification

33. Would Seattle be interested in reforestation projects in the tropics? Must they meet Clean Development Mechanism criteria?
Seattle would consider this type of project. It would have to meet Seattle's criteria, as listed in the RFP.

34. Can you help locate "partners" in Seattle for overseas proposals, as we are not familiar with organizations in that part of the world.
No, finding US partners is the responsibility of the bidder.

35. Define "local flexibility".
Seattle will consider local projects that offer fewer than 50,000 metric tons and/or are more expensive than $4/metric ton.

36. Define "co-benefits".
Co-benefits include, but are not limited to: environmental benefits other than GHG reduction, improvements in health, socioeconomic benefits, reduction in traffic congestion, etc. Project proposers are encourage to describe these co-benefits clearly as a part of their proposals, and Seattle will evaluate those benefits qualitatively, along with the GHG benefits.

37. Will Seattle make any pre-payments to the project? For example, upon equipment purchase before the actual project implementation?
No. Seattle is required under Washington law to have actually received goods or services before any payment is made. Though there may be certain scenarios in which Seattle would agree to pay for certain deliverables required to produce offsets, there must be guarantees that the offsets will be produced, and that the project will not be terminated before completion and after Seattle has made payments. These are issues that would be worked out in contract negotiations.

38. Will Seattle pay the developer to prepare the detailed second-stage baselines (i.e., for the greenhouse gas emissions quantification work), which could run $15,000-$20,000 (depending on the GHG emissions reduction complexity), or will the Seattle City Light choose only those projects that would not require such complex emissions reduction quantification?
Generally, no, but it will depend on the project. For very promising or local projects, Seattle may structure a contract that includes payment for baseline studies. Seattle may be more willing to share these cost if the overall project costs are competitive. Seattle will need enough information in the Phase 1 and 2 proposals to determine if the offsets are worth paying for an expensive baseline study.

39. Will Seattle pay for the project validation (i.e., for the certification process by a third independent party)? If the answer is 'yes', up to what amount?
The project developer is responsible for performing Monitoring and Verification and reporting the results to Seattle. Seattle expects that the cost of M&V will be included in the price per metric ton offered for the offsets.

40. Will Seattle recommend the validators acceptable to you, or where will you get the information about who is qualified to be your validator?
This will be part of the negotiating process. Seattle is aware of qualified evaluators for a variety of types of projects, but the final selection will be mutually agreed upon by Seattle and the proposer.

41. Seattle indicated that loans could not be made and payments are to be made based on some form of progress. An example of progress was a milestone in the construction of a facility. This led me to believe that payments could be made on construction. This is different than some GHG contracts which pay only for specific amounts of GHG being mitigated as they are being mitigated.
If we have a y (say 1) million dollar facility that will produce y (1) million dollars of GHG mitigation at 4 $/CO2 equivalent tons over x(say 7) years, could we be paid for the construction in the first year?
The preferred payment schedule is to pay for the offsets as they are delivered. Generally, Seattle is unable to make any generic statements about project payments. However, in the event that Seattleís preferred payment schedule is not possible, Seattle may also consider other options depending on the project. Each option will be viewed on an individual basis. In order to make payments, Seattle has to understand and have evidence of a good or service that is being delivered, and be sure that offsets will result. Contracts will be written to ensure that payments made are linked to actions that produce offsets, and that Seattle has recourse if payments are made and offsets are not produced.

42. During the bidders conference, mention was made that proposers should identify anticipated future changes in technology that would supplant the CO2 reductions achieved by the proposed mitigation measure. In looking through the RFP, I didn't see mention of "anticipated changes in technology" - could you please clarify the context in which it was mentioned?

This is related to the Baseline (a projection of GHG emissions without the proposed project). Any "anticipated change in technology" that would occur over the life of the project, related to GHG emissions, would have to be reflected in the Baseline. For example, an fuel efficiency project would have to include estimates of how, even without the project, improved technology would result in decreased GHG emissions over time.

43. Why does Seattle require a US partner be involved in the GHG offset project proposals? What type of liability would Seattle expect the US partner to assume in the event of project failure?
Seattle requires a US partner for several reasons. Among the most important is that it provides an entity that can be party to the contract that is bound by US laws and financial procedures, thus reducing Seattle's risk. As Seattleís intent is to simply purchase offsets as finished products, Seattle would expect its contracting partner to assume all of the risks related to the creations of the offset regardless of whether it is a US or International partner.

44. If GHG reductions are achieved, but the project developer does not own the emission source, what procedure does Seattle require to demonstrates the transfer of reduction 'rights' from the utility to the project holder to Seattle?
Seattle would require that the contract contain provisions that the developer would transfer clear title to Seattle and defend and indemnify Seattle from challenges to the title. Seattle may also require that all parties involved in the emissions reduction activity and any potential claimants of the offsets (for example, the local electric utility in an energy efficiency project) acknowledge in writing that Seattle owns the offsets.

45. How much diesel fuel is used by City of Seattle vehicles?
The City operates 132 diesel vehicles all of which use ultra low sulfur diesel. Typical use per year is 760,000 gallons

46. Can you give me an indication of what types of projects were successful from the first RFP?
Contracts are being negotiated with projects involving energy efficiency in industrial processes, use of substitute materials in place of raw materials in manufacturing to reduce energy use and CO2 production, and forest sequestration. We anticipate that the material substitution contract will be signed by the end of January.

47. As it now stands, our project is smaller than the 50,000 metric tons CO2 equivalent minimum. Is there any chance you would consider something
smaller that is outside the King Co. area?

Yes, there is a chance we would consider projects smaller than 50,000 tons. Projects that are closest to Seattle (and still outside of King County) have a better chance of being considered even though they are below the 50,000 threshold.

Projects that are very small may be at a disadvantage to larger projects because of the administrative cost of negotiating and executing contracts and doing Monitoring and Verification. Small projects may increase their chances of advancing to Phase 2 if they can find partners, who would do the same type of project, and increase the number of total tons.

48. What does it mean that Seattle expects to discount the value of the GHG offset for projects that take decades to deliver GHG emissions reduction or sequestration? Does this mean the projects need to be larger to meet the
50,000 metric tons CO2 equivalent minimum?

SCL recognizes that ghg emissions that occur in the near term should be mitigated in the near term, as close in time as possible to the actual emissions. Projects that take decades to deliver tons do not address the immediate nature of the ghg problem, and therefore SCL will discount those tons. Projects that deliver tons over several decades should provide a larger number of tons that the 50,000 minimum to account for possible discounting. The process for discounting tons for time will vary from project to project.


Downloadable Documents:

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