| BETC Opportunity Announcement Q & A |
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| As of June 17th, 2010 |
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1. Question: What application should a high efficiency combined heat and power project complete?
Answer: It depends upon the fuel source. If the fuel source is a wood or other biomass fuel source, fill out the Tier General Application form (use the appropriate form for the facility: Tier 1, 2 or 3) and the Appendix 1 - Biomass, Wind, Hydro & Geothermal form. If the fuel source is natural gas, fill out the Conservation application form. All of these forms can be found at the ODOE website: http://www.oregon.gov/ENERGY/CONS/BUS/BETC.shtml.
2. Question: If the Oregon Department of Energy rejected an application due to changes in the Business Energy Tax Credit rules, and construction has begun or the facility is nearly operational, is the project still eligible for consideration?
Answer: Yes. If your application was rejected by the Oregon Department of Energy in May 2010 because of the changes from House Bill 3680 and the implementation of the tiered priority system, you are still eligible for consideration in the competitive tier process. You must submit a new application meeting all the requirements listed in the opportunity announcement. The date your rejected application was received and complete will be used to determine the eligible cost effective date for your new application, if the facility is the same as the one proposed in the rejected application.
3. Question: Is Algal Oil eligible for consideration as a source of biomass energy?
Answer: Yes, It could be considered. There is no prohibiting statute and Oregon Administrative Rule 330-090-0110(6) defines biomass as:
An organic matter such as agricultural crops and residue, wood and wood waste, animal waste, aquatic plants and organic components of municipal and industrial wastes comprised of uncontaminated carbohydrates and other cellulosic material, and organic by products from wood pulping and other biologically derived materials including organic fibers that are available on a renewable or naturally recurring basis.
4. Question: When submitting a Tier 2 or Tier 3 application, should an applicant include the $500 review charge and the additional review charge?
Answer: Only the $500 initial non-refundable review charge should be submitted with the application. If an application is selected for technical review, the Oregon Department of Energy will contact the applicant and require the additional non-refundable review charge to be paid. Please refer to Section 3.3.2 in the Opportunity Announcements for Tier 2 or Tier 3 for further explanation of the review charges.
5. Question: For solar photovoltaic applications, what should the applicant submit for their business plan?
Answer: For solar photovoltaic applications, an applicant should provide a summary of their plans for the facility to demonstrate that the facility is economically viable. The summary may be in the form of a business plan, project plan or other appropriate format to convey the information. For example, an applicant developing a utility scale solar facility to produce power for “sale” could submit a summary of their business plan, whereas a project plan or summary of operations could be more appropriate for an applicant producing power mainly for their own use. The application asks for a summary of the business plan related to the operation of this facility and an applicant should only attach further documentation if applicable.
6. Question: Estimated completion date on page 5 is listed as prior to July 1, 2012, which is the date final certification must be received. When do applications for final certification need to be submitted to ODOE so that final certification can be received by the project by July 1, 2012?
Answer: Oregon Laws, 2010, Chapter 76, Section 5 states “a taxpayer may not be allowed a credit under ORS 315.354 unless the taxpayer receives final certification under ORS 469.215 before July 1, 2012.” A complete final application should be submitted to ODOE by April 30, 2012 in accordance with OAR 330-090-0133(1)(b) which provides ODOE 60 days to process a final application.
7. Question: Are each of the categories weighted equally? If not, which carry greatest weight?
Answer: Each of the program priorities listed in Section 4.3 of the Tier Two or Tier Three Opportunity Announcements are not weighted equally. The priorities in Group 1 carry more weight than priorities in Group 2 and Group 3. Group 2 priorities carry more weight than priorities in Group 3.
8. Question: Are projects scored and ranked against similar technologies or are all Tier 2 or Tier 3 projects ranked against each other?
Answer: All Tier Two applications regardless of technology will be scored and ranked together. All Tier Three applications regardless of technology will be scored and ranked together.
9. Question: Does each technology have a benchmark for cost ratio of power, payback period, and reliability against which the project is scored?
Answer: Each technology does not have its own benchmark for cost ratio of power, payback period or reliability. All applications will be reviewed on the same scale.
10. Question: Do the scores for the three groups of priorities have different weights, for example, is Group 1 as a whole weighted more heavily than Group 2 or Group 3 in scoring?
Answer: An individual priority in Group 1 carries more weight than an individual priority in Group 2 or Group 3 and an individual priority in Group 2 carries more weight than an individual priority in Group 3. Therefore as a whole, Group 1 is weighted more heavily than Group 2 or Group 3 and Group 2 is weighted more heavily than Group 3.
11. Question: Tier Three Opportunity Announcement Section 4.5, Third Party Review, under what circumstances is a 3rd party review required/not required and is there a cost cap to the review?
Answer: OAR 330-090-0350(2)(c)(D) provides that “[i]f the department determines that it does not have the appropriate resources available to conduct the review, the department may notify the applicant that the department intends to use a third party to conduct the technical review. If a third party is used, the applicant will be required to submit payment to the department approved third party for the review.” The cost of the review will be facility (project) specific.
12. Question: “The parties will work to enhance the application and the facility to encourage success” is contained under Section 4.6: Offer of Preliminary Certification in the Tier Three Opportunity Announcement (Section 4.5 in the Tier Two Opportunity Announcement). What types of application enhancements are expected to occur at this stage?
Answer: During the Offer of Preliminary Certification, the applicant and the ODOE Energy Analyst will work to enhance the application and the facility to encourage success. This allows the applicant to make additions or modifications to their application if necessary. Currently, ODOE is unable to know or expect what types of enhancements would be appropriate, because the enhancements would be application and facility specific.
13. Question: Also under Section 4.6: Offer of Preliminary Certification in the Tier Three Opportunity Announcement (Section 4.5 in the Tier Two Opportunity Announcement), “The Energy Analyst will communicate to the facility owner the conditions surrounding the offer of Preliminary Certification”, are there conditions outside of the requirements listed within OAR 330-090-0105 through OAR 330-090-0350 that may be applied? What are those conditions expected to include?
Answer: The conditions surrounding the offer of Preliminary Certification include the requirements listed within OAR 330-090-0105 through OAR 330-090-0350 and Oregon Laws, 2010, Chapter 76. ODOE reserves the right to include additional conditions in order to protect the interests of the state and comply with statute. These conditions may be facility-specific, such as performance standards based on information provided in the application.
14. Question: Appendix No.1 to Preliminary Certification Application for Biomass, Wind, Hydro, Geothermal section 9b, please clarify the difference between 9b1 and 9b2 and how 9b2 is used in the simple payback calculation.
Answer: Appendix Number 1, Question 9.b.1., “Cost savings per year”, could account for energy produced and used at the site or ancillary energy used by the system (would show as a negative number). Question 9.b.2., “Total first year fuel savings revenue (no escalation)”, accounts for the energy produced that is sold. The ultimate goal of Question 9 is to account for the value of the net energy produced.
15. Question: Please clarify if the full $20 million could be awarded to Tier 2 projects during the first round June – August or if only a portion of that will be available.
Answer: For Tier Two applications, up to $10 million in tax credits ($20 million in eligible costs) will be available during the current funding cycle, June-August 2010. There will also be up to $10 million in tax credits available during the next finding cycle, October-December 2010.
16. Question: I see that the current rules state that the project must be operational by July 1, 2012 and I am wondering how the program defines when a hydropower project technically becomes “operational.” Is it once power is being put into the grid, or when a certain amount of power is being generated?
Answer: To clarify, Oregon Laws, 2010, Chapter 76, Section 5 states: “a taxpayer may not be allowed a credit under ORS 315.354 unless the taxpayer receives final certification under ORS 469.215 before July 1, 2012.” Therefore, before July 1, 2012, a facility must not only be operational but also receive final certification from ODOE. Complete final applications should be submitted to ODOE by April 30, 2012 in accordance with OAR 330-090-0133(1)(b) in order to provide ODOE time to approve or deny the final certificate. Hydropower facilities (projects) are operational when the facility can operate at full capacity. For example, all portions of the facility are complete to allow the facility to operate.
17. Question: What is the current pass through rate?
Answer: As described in OAR 330-090-0140(1)(a)(A), a pass-through payment for an original precertification issued on or after January 1, 2010, “[f]or a five year tax credit the net present value is determined by taking the total tax credit amount divided by 1.3579. Tax Credit/1.3579.”
18. Question: Section 2 Application Requirements; 2.2: Program Priority Review: please define “Aligning Renewable and Conservation Activities”. Is this referring to environmental conservation or energy conservation?
Answer: Aligning Renewable and Conservation Activities in Section 2.2 of the Tier Two or Tier Three Opportunity Announcements refers to renewable or conservation energy facilities (projects). This measure is looking for renewable and conservation activities related to the facility (project). For example, if an applicant has already, or demonstrates intent to, weatherize a building on which it is proposing to install solar panels, the application would be given positive consideration. In addition, if environmental conservation is applicable to the facility it could also be addressed in that part of the application form (Question 12 in the Tier Two or Tier Three General Application Form). Please indicate if the environmental conservation measures are required by law.
19. Question: Section 2 Application Requirements; 2.2: Program Priority Review: we assume the request of an analysis of the strength of the business plan refers to manufacturing facilities. For energy generating facilities is this analysis needed and provide an example of the type of information requested.
Answer: All questions on the application forms must be answered in order for an application to be considered complete. Questions should be completed in a method applicable to the facility. Question 11 in the Tier Two or Tier Three General Application Form asks for a summary of the facility’s business plan. The application asks for a summary of the business plan related to the operation of the facility. An applicant should provide a summary of plans for the facility that demonstrate the facility is economically viable. The summary may be in the form of a business plan, project plan or other appropriate format that conveys the necessary information. An applicant should only attach further documentation if applicable. For example, an applicant developing a utility-scale solar photovoltaic facility to produce power for “sale” could submit a summary of their business plan, whereas a project plan or summary of operations may be more appropriate for an applicant producing power mainly for their own use.
20. Question: What is the threshold for changes to the facility after certification. For example it is common to make assumptions during development about the amount of MW generation expected or the footprint of the facility. During final engineering and construction, this number may change due to unforeseen constraints. What is the process for making modifications to the application after certification and what is the threshold for the type and magnitude of changes allowed?
Answer: OAR 330-090-0130(7)(c)provides that “[p]reliminary certifications issued for facilities using or producing renewable energy resources, or facilities listed as renewable energy resources as defined under ORS 469.185, on or after July 1, 2009 shall not be eligible for consideration of amendments other than equipment modifications within 10% of the approved specification.” To submit an amendment the facility owner must file a written request prior to the facility (project) completion date describing the change to the facility, reasons for the change and include the appropriate fee. OAR 330-090-0150(3)(c)describes review fee as the payment as the lesser of $300 or the preliminary certification application review charge.
21. Question: The design and engineering for our biomass-fired power plant has not been completed. However, we know generally what equipment will be used, how the construction and operation of the plant will be manned, and the cost of the project. Due to the possibility that definitive information may not be available before the final filing date of July 31, 2010 (Tier 3 applications), is it okay to answer question 10 of the main application form and questions 6 and 8 of Appendix No. 1 with this approximate but close information and then refine the information if our application is accepted for technical review?
Answer: You will need to provide information that will describe your facility (project) in enough detail for the reviewers to have a reasonable understanding of the facility’s (project’s) function, resource requirements/availability, cost, production, sales, and likelihood of success; as well as other details outlined in OAR 330-090-0120 and 330-090-0350. Applicants must also be aware that there are limits to what may be amended. OAR 330-090-0130(7)(c) defines these limits and OAR 330-090-0150(3)(c) details the associated fees to amend. Therefore, a proposed facility (project) might include some estimates, however, they should be the highest quality estimates available and attention should be given to whether or not your facility could be completed within the original description (or with permissible amendments).
22. Question: What would Item 9.b.2., “Total first year fuel savings revenue” of Appendix No. 1 to the Preliminary Certification Application for our project? The only revenue that the project will receive will be from sale of electricity to a utility. Is this the number we should use for Item 9.b.2.?
Answer: Yes, Appendix 1 - Biomass, Wind, Hydro & Geothermal, Question 9.b.2. “Total first year fuel savings revenue (no escalation)”, accounts for the value of the energy produced that is sold. If all of the energy produced by the facility (project) is sold, this would be the information needed for Question 9.
23. Question: If the BETC solicitation is oversubscribed, will the BETC's be distributed prorata among the qualified projects?
Answer: The available tax credits budgeted for each funding opportunity as described in the Opportunity Announcements and ODOE Press Releases will not necessarily be distributed prorata among the qualified applications. The department may allocate tax credits up to 50 percent of the eligible facility costs at his discretion. Both Tier Two and Tier Three are competitive review processes in which it is very possible that not all qualified facilities will receive preliminary certification.
24. Question: If the BETC solicitation is oversubscribed and the project is qualified but is not accepted by BETC, will the application fee be refunded?
Answer: All review charges are non-refundable. Section 3.3.2 in the Tier Two or Tier Three Opportunity Announcements describes the review charges for applications.
25. Question: Certainty is very important for BETC recipients and the projects they are developing; if a project is accepted as part of this solicitation can we be assured that there will not be further changes to the BETC program?
Answer: ODOE recognizes the importance of certainty in the BETC program. If ODOE issues a preliminary certificate of potential tax credits for a facility through the tiered priority system, it is the Department’s intention that the facility owner be able to receive final certification and be issued tax credits for that facility provided that the applicant meets all conditions of preliminary certification. However, the BETC program is established by the legislature, and the legislature retains the authority to make changes to the program as necessary in order to protect the interests of the State. Therefore, ODOE is unable to guarantee that the legislature will not make changes to statute and the BETC program that prevent ODOE from completing its intended action and impacting facility owners.
26. Question: Is there a prioritization of renewable resources for BETC approval - solar vs wind vs geothermal vs wood biomass vs manure biomass etc?
Answer: There is no specific prioritization of renewable resources for awarding preliminary certification under the Tier Two or Tier Three Opportunity Announcements. All Tier Two applications, regardless of technology, will be scored and ranked together. All Tier Three applications, regardless of technology, will be scored and ranked together.
27. Question: Review Charge, the application has an upper section requesting full credit card information. Is it okay for the customer to request a phone call to retrieve this information or is it mandatory to be listed on the application? Many times applications are filled out on behalf of a vendor’s customer. They may not want to release this information to the vendor. The concern is the documentation suggests that lack of credit card information would deem the application incomplete and rejected.
Answer: Section 2.1 in the Tier Two or Tier Three Opportunity Announcements includes a list of minimum applications requirements. One requirement is payment via check or credit card. Section 3.3.2 defines payment is received as when a signed check made payable to “The Oregon Department of Energy” is included with the application or the credit card block on the front page of the application is completed and signed.
28. Question: Facility Owner Preliminary Statement, you have a huge open space in your application under this heading. Is there a requirement other than the customer just filling out their name/date/title and signing? Is all the white space to be ignored?
Answer: The Facility Owner Preliminary Statement requires the applicant to read all the listed information and sign the statement, provide their title, print their name and date. On the copies of the application available on the ODOE website, there is no white space under the heading. It is possible when filing out the application in a Word document, that the spacing gets inconsistent. To see a copy of the original application, please refer to the PDF version of the Tier Two General Application or Tier Three General Application on the ODOE website at: http://www.oregon.gov/ENERGY/CONS/BUS/docs/Renew/Renewable-Tier2-3_Application-General.pdf
29. Question: Readiness to Start and Complete the Facility, can I assume that a project outline with milestones and associated intervals tied to actual dates will suffice for this category?
Answer: Question 9 Facility Readiness on the Tier Two General Application or Tier Three General Application asks the applicant to explain how the facility will meet the program’s sunset deadline (see ORS 315.357(1)) and to provide a project schedule with key milestones identified. A project outline with milestones and associated intervals tied to actual dates should be enough information for the reviewers to determine if your facility will meet the program’s sunset deadline. Please note that this project outline must also demonstrate that the timeline is feasible and includes the appropriate key milestones based on the facility resource type.
30. Question: Cost Ratio of Power, can you direct me to the section in the application or appendix that addresses this requirement for your review/grading purposes?
Answer: The cost ratio of power will be calculated by taking the power being generated by your facility divided by the tax credit requested. Those measures will be taken from several questions in the application appendix based on the type of your facility. For example: Appendix 1 Question 2-5 and 8; Appendix 2 Question 3 and 7; Appendix 3 Question 3-6; Appendix 4 Question 3-6.
31. Question: Payback Period, can you direct me to the section in the application or appendix that addresses this requirement for your review/grading purposes? Is this derived from your own calculations after review of the funding sources, incentive amounts and gross cost of the system or are you looking for a full financial analysis from the applicant?
Answer: The payback period will be taken from the following application appendix questions based on the type of your facility: Appendix 1 Question 9, Appendix 2 Question 6, Appendix 3 Question 6 (MEC) and Appendix 4 Question 6 (MEC). Detailed information will be analyzed for those applications that proceed to the technical review.
32. Question: Financial Structure, is this handled under section 7 of the appendix regarding funding/incentive sources?
Answer: Yes, the financial structure is evaluated from the following application appendix questions based on the type of your facility: Appendix 1 Question 10, Appendix 2 Question 4, Appendix 3 Question 7 and Appendix 4 Question 7.
33. Question: Life Span, is this 100% reviewed/graded by the questions asked on the appropriate appendix to the application or are you looking for supporting documentation outside of the necessary appendix? If yes, what type of documentation do you need? Manufacturer Warranty sheets? Regarding the structure’s life expectancy, is this relevant to the roof or the building structure? Can you please provide an example of what type of data you would like to see that supports this integrity?
Answer: Expected Lifespan of the Facility is a criterion by which applications will be judged. Therefore, information that supports this criterion should be provided in a reasonable level of detail and may include maintenance plans, warranties, inspection reports, etc. Applicants should consider that this is a competitive process and any supplemental information that would be helpful in conveying the details of the facility (project) should be included.
34. Question: Jobs and Employment, is this question related to the applicant and their necessity to maintain the technology or is this question directed at the integrator and the man hours necessary to complete a renewable project from A to Z? Do we need to get as granular as factoring in considerations such as equipment manufacturing and what that takes on the employment side?
Answer: Question 10 in the Tier Two or Tier Three General Application asks about estimates of job creation. The intent of question is to quantify the jobs created or retained during the facility (project) period. Please include all jobs created or retained directly by the facility. Do not include overhead staff, such as human resources and finance unless those workers provide direct support to the facility. Use the extra space on the application to justify how the worker is directly related to the facility or other explanations of how the estimates of jobs were calculated. In general, you should not include job estimates for equipment manufacturing unless there is a strong justification that the work hours are easily quantifiable and directly related to the facility and its continued operation. Please make sure to provide a clear justification for each type of job you list for this question.
35. Question: Geographic area/Local Economic Conditions, is this 100% reviewed/graded by the questions asked on the appropriate appendix to the application such as mounting type, TSRF/TOF, Solar Resource for the area? If no, please provide example data.
Answer: Geographic area/Local Economic Conditions is evaluated based on the county in which the facility is located (Question 2 in the Tier Two or Tier Three General Application) by using unemployment and population density data for that county.
36. Question: Strength of Business Plan, whose Business Plan are you requesting? The applicant’s? The Architect, Engineer, vendor or contractor’s Business Plan?
Answer: For the Business Plan, an applicant should provide a summary of their plans for the facility (project) to demonstrate that the facility is economically viable. The summary may be in the form of a business plan, project plan or other appropriate format to convey the information. The application asks for a summary of the business plan related to the operation of the facility and an applicant should only attach further documentation if applicable. For example, an applicant developing a utility scale solar photovoltaic facility to produce power for “sale” could submit a summary of their business plan, whereas a project plan or summary of operations may be more appropriate for an applicant producing power mainly for their own use.
37. Question: Aligning Renewable and Conservation Activities, is there a reference table you will be using to grade this category? For example, is recycle boxes throughout the office a consideration and a positive grading point?
Answer: Although ODOE encourages recycling, this will not be included in this evaluation. This measure is looking for renewable and conservation activities related to the facility (project). For example, if an applicant has already, or demonstrates intent to, weatherize a building on which it is proposing to install solar panels, the application would be given positive consideration.
38. Question: Connection and Existing Infrastructure, is this a question on Interconnection to the Utility/grid or a technical question related to how the panels will be mounted to its supporting structure?
Answer: This question is in respect to interconnection between the facility (project) and everything else; it would usually involve transportation of energy or fuel (via the grid, a pipeline, road, railroad, barge, etc.). Information regarding the connections of the facility (project), both electrical and mechanical, should be addressed in the description section of your application.
39. Question: Combined Heat and Power or Co-Gen Systems, will all applications that are only deploying one renewable technology, as a single generation source be penalized?
Answer: Applications that only have a single generation source will receive a lower score in this area than applications for renewable fuel fired combined heat and power or co-gen systems. This is a Group 3 priority.
40. Question: Reliability of Power, is this 100% reviewed/graded by the questions asked on the appropriate appendix to the application or is this a grading based on the type of renewable technology selected? If no, please provide example data.
Answer: The reviewers will evaluate the reliability of power based on the resource supply. Reviewers will give a higher score to facilities with a steady flow of power compared to those with an intermittent or variable flow of power. This criterion is a Group 3 priority.
41. Question: Public Body Competitive Bidding, will applications that are a private party be penalized for not using a competitive bid process or is that a penalty that is only applicable to a Public Entity?
Answer: Private party applications will not be penalized, rather they will receive the same score for this priority as a public body that does use a competitive bidding process.
42. Question: Grading, can you please provide the grading structure? Is this ranged points system or just a pass/fail?
Answer: All applications will be scored according to the priorities listed in Section 4.3 of the Tier Two or Tier Three Opportunity Announcements. Each priority will be scored on a range where Group 1 has more weight than Group 2 and 3 and Group 2 has more weight than Group 3. Only the minimum requirements listed in Section 2.1 and facility requirements listed in OAR 330-090-0105 through OAR 330-090-0350 of the program priority review listed in Section 2.2 are scored on a pass/fail basis. To make this Opportunity Announcement competitive, the specific scoring structure will not be available until after all applications have been reviewed and scored. All score sheets will be available via a public records request after notification to all applicants of their status.
43. Question: Associated Rules, where are the rules for the facility requirements listed? There is a link at the bottom of the Oregon/gov/energy web page that takes you to the Oregon Administrative Rules however at the beginning of the document it says that the rules that cover it are 330-090-0150 through 330-090-0350; On the OAR rules page only 330-090-0150 is listed, the rest of the rules are missing.
Answer: The current BETC Oregon Administrative Rules are located at: http://oregon.gov/ENERGY/CONS/docs/FINALTempBETC3680rules21MAY10.pdf
44. Question: For a Tier 3 application, could we also apply for the Tier 2 application at the same time in the event that we were not granted a Tier 3.
Answer: An applicant may only apply in the tier in which the facility (project) is eligible, based on total projected facility cost, see OAR 330-090-0350(3)(e). However, an applicant may submit separate applications for different-sized facilities (projects) in the appropriate tiers. An applicant that submits multiple applications must indicate to ODOE in writing that the applicant acknowledges that OAR 330-090-0120(2)(b) prevents an applicant submitting multiple BETC applications for a single facility.
45. Question: What happens if the actual cost of the project comes in either higher or lower than the estimated cost provided in the application? At what point does the difference between estimated cost and actual cost require the project and application to be re-evaluated?
Answer: Once an application has been issued preliminary certification, ODOE will not provide an additional tax credit on any increased costs. If the costs decrease and the facility is completed as proposed in the preliminary application, upon review of the final application, ODOE will issue a tax credit on the decreased eligible cost amount. Changes in cost during facility (project) development will be evaluated during final certification. OAR 330-090-0130(7)(c) provides that “[p]reliminary certifications … shall not be eligible for consideration of amendments other than equipment modifications within 10% of the approved specification.”
46. Question: For Tier Two, we understand there might be an additional $20 million available in a subsequent application period. Is a 2nd round of applications to occur after June 30th that we would be able to apply for funds at that time? If so, when do you anticipate that deadline to be?
Answer: For Tier Two applications, up to $10 million in tax credits ($20 million in eligible costs) will be available during the current funding cycle, June-August 2010. There will also be up to $10 million in tax credits available during the next finding cycle, October-December 2010. ODOE anticipates that applications for the next funding cycle will be accepted in October 2010. Please check our website in September 2010 for the new Opportunity Announcement for that funding cycle.
47. Question: Technical review period – will we be able to see how our application ranks in comparison to the other Tier 2 applicants so our client can make a ‘yes or no’ decision as to whether or not to advance to the technical review, and incur the additional fee?
Answer: Only applications for which ODOE intends to issue preliminary certifications will be advanced to the Technical Standards Review described in Section 4.4 of the Tier Two Opportunity Announcement. At that point, the applicant must decide whether to proceed with the technical review, and pay the non-refundable review fee. It is ODOE’s intention that applicants who successfully complete the technical review will be issued preliminary certificates.
48. Question: Our understanding is it is generally better to wait until closer to 90% design level to submit an application, but given the fact that there’s a rapidly approaching deadline, we want to make sure our client can apply and potentially receive funds by not missing the Tier 2 June 30th deadline. Our application is based on a planning level design with cost estimates based on actual vendor quotes. We intend to provide planning level documents with our application that shows rough equipment layouts, as requested in the BETC Tier 2 application. Is a planning level design generally detailed enough to give our application consideration, given the other parameters of the application are successfully met?
Answer: You will need to provide information that will describe your facility (project) in enough detail for the reviewers to have a reasonable understanding of the facility’s (project’s) function, resource requirements/availability, cost, production, sales, and likelihood of success; as well as other details outlined in OAR 330-090-0120 and 330-090-0350. Applicants must also be aware that there are limits to what may be amended. OAR 330-090-0130(7)(c) defines these limits and OAR 330-090-0150(3)(c) details the associated fees to amend a facility (project). Therefore, a planning level design may be enough to be considered, however attention should be given to whether or not it can compete with other applications in the same tier and, if so, could it be completed within the original description (or with permissible amendments).
49. Question: Within the section entitled “Pass Through Option Process and Application” (page 41, Item 9, section (a)), the rules indicate that an applicant who intends to transfer the tax credit certificate to a Pass Through partner must complete and file the Pass-through Option Application form supplied by the Department. Can the Department clarify where the Pass-Through Option Application may be found or provide a link to that particular application?
Answer: OAR 330-090-0130(9)(a) does require an applicant who plans to transfer the tax credit to complete the “Pass-though Option Application form.” This requirement can be met my checking the box in Question 5 of the Tier Two or Tier Three General Application Form. No additional form is required.
50. Question: Please define what the Department characterizes as “Business Plan” and please identify the criteria for which the Department will measure “Strength of Business Plan” when assessing Tier Two applications. (a) Given the broad interpretation of the phrase “Business Plan” are there specific sections or topics that the Department is seeking to review within such business plan? (b) Will ODOE prepare templates of the Business Plan format that they expect applicants to submit?
Answer: Question 11 in the Tier Two or Tier Three General Application Form asks for a summary of the facility’s business plan. An applicant should provide a summary of their plans for the facility to demonstrate that the facility is economically viable. The summary may be in the form of a business plan, project plan or other appropriate format that conveys the information. The strength of the summary/business plan/information supplied for Question 11 will be evaluated based on the understanding and knowledge provided to demonstrate the facility is economically viable. The reviewers are not looking for a specific section or topic nor will ODOE prepare templates to provide the information.
51. Question: Please define what the Department characterizes as “Reliability of Power” when assessing Tier Two applications.
Answer: The reviewers will evaluate the reliability of power based on the resource supply. Reviewers will give a higher score to facilities with a steady flow of power compared to those with an intermittent or variable flow of power. This criteria is a Group 3 priority.
52. Question: Please provide the formula the Department will utilize when determining “Payback Period” and “Cost Ratio of Power” when assessing Tier Two applications.
Answer: “Payback Period” or “Simple Payback” is the total eligible cost of a facility divided by the expected yearly energy cost savings, stated in years. (Note: Yearly energy cost savings should include the value of all fuels when applicable.) “Cost Ratio of Power” is the net energy produced per year, in KBtu divided by the tax credit dollar amount requested.
53. Question: Will the Department be providing guidance as to the future energy rates that should be utilized when determining “Payback Period”?
Answer: “Payback Period” or “Simple Payback” by definition does not include escalation of rates, therefore for purposes of this calculation all values will be considered in current dollars.
54. Question: When considering the cost of comparative applications on a price per watt basis, how will the Department take into consideration qualitative factors such as the respective warranty period or useful life of the underlying technology employed by the proposed applicant?
Answer: ODOE will review and score all applications on the same scale for cost ratio of power. This will take place during the Program Priority Review described in Section 4.3 of the Tier Two or Tier Three Opportunity Announcement. Additionally the life span of a facility is one of the criterion scored during that review and will implicitly provide higher scores to facilities with a longer useful life. Information on warranty periods can be provided and may be useful to a reviewer during the Technical Standards Review as described in Section 4.4, but is not required.
55. Question: When referring to the “Expected Lifespan of the Facility”, is the Department referring to its Economic Life, Depreciable Life, Power Generating Life, or some other measure?
Answer: ODOE will define "Expected Lifespan of the Facility” as the number of years over which a facility (project) is expected to be usable for the purpose it was designed and built, taking into account normal repairs and maintenance.
56. Question: When measuring “Expected Lifespan”, how will the Department take into consideration the value of replacement parts necessary to keep the energy facility operating?
Answer: The case must be made for what replacement parts are necessary and reasonable in relation to the type of facility.
57. Question: Please confirm that the language within House Bill 3680, Section 6 (2) (the section relating to the creation of a tiered priority system for assessing applications) that sub-item (i) was meant to read “geologically” advantageous rather than “geographically” advantageous. If the language in House Bill 3680 is correct, please specify the criteria that will be used to determine geological advantageous?
Answer: “Geologically” was listed in an early version of the bill, but the final (“enrolled”) version of Oregon Laws, 2010, Chapter 76, Section 6 (2)(i) states that “[p]rojected siting in a location that is geographically or socioeconomically advantageous.” The enrolled version of House Bill 3680 is located at: http://www.leg.state.or.us/10ss1/measpdf/hb3600.dir/hb3680.en.pdf
58. Question: What measures will be used to determine socioeconomically advantageous? (1) Qualified Census Tracts? (2) Low Income communities? (3) How will this criteria be measured in comparison to market sectors criteria? For example, is a project that provides alternative energy for a commercial businesses in low income community favored more highly than a project that provides alternative energy to schools?
Answer: “Projected siting in a location that is geographically or socioeconomically advantageous” is one of the criteria suggested in House Bill 3680 Section 6 (2). The director may implement any of those criteria, but that measure has not been included in the evaluation criteria for this round. The reviewers will evaluate the geographic area and local economic conditions of the county in which the facility is located (Question 2 in the Tier Two or Tier Three General Application) by using unemployment and population density data. The evaluation measures do not directly look at low-income communities or specific characteristics of the facility owner (such as a school or nonprofit organization).
59. Question: Will ODOE publish analytical data related to projects that are funded? For example, data broken down by: (1) Market data, (2) System Size, (3) Technology Employed, (4) Energy Type, (5) Geographic Location, (6) Funding Amount, (7) Price / kWh, (8) Anticipated rate of return, (9) Payback period, (10) Expected lifetime, (11) Job creation and (12) Cash returns vs. non-cash returns
Answer: At the end of the funding period when successful applications are awarded a preliminary certificate, ODOE will issue a press release with the facility owner’s name, resource type, county location and tax credit awarded, similar to the May 12, 2010 press release, http://www.oregon.gov/ENERGY/news/1016BETC_Cap.shtml
60. Question: Within Page 4 of the Tier II application (Form 5/10 BETCOA App – SKF ER), please specify if the number of jobs created should include estimates of jobs created at sub-contractors or component manufacturers based in Oregon. For example, for a Wind development project that utilizes turbines manufactured or assembled within Oregon, should the Wind Developer attempt to discern the number of jobs created at that supplier?
Answer: Question 10 in the Tier Two or Tier Three General Application asks about estimates of job creation. The intent of question is to quantify the jobs created or retained during the facility (project) period. Please include all jobs created or retained directly by the facility. Do not include overhead staff, such as human resources and finance unless those workers provide direct support to the facility. Use the extra space on the application to justify how the worker is directly related to the facility or other explanations of how the estimates of jobs were calculated. In general, you should not include job estimates for equipment manufacturing unless there is a strong justification that the work hours are easily quantifiable and directly related to the facility and its continued operation. Please make sure to provide a clear justification for each type of job you list for this question.
61. Question: Please define the information (and provide examples of) requested by the Department within Section 7 “Resource Supply” on page 3 of the Tier II application (Form 5/10 BETCOA App – SKF ER). For example, in the case of Solar Photovoltaic, is the Department anticipating to receive indications that the type of Facility utilized will not negatively impact the structural design of a rooftop? If yes, please define the actual “deliverable” anticipated by the Department. For example, is the Department anticipating a statement by the Facility Owner, an Engineering Report, an affidavit from a roofing contractor, or some other statement or evidentiary document?
Answer: For solar photovoltaic applications, the applicant must provide data that shows that the structure’s life expectancy or durability will not be reduced by the installation. This can be shown by providing data that the roofing material has at least 10 years of useful life remaining to ensure the roof will not need repair or replacement early in the facility’s operational life. Evidence of this requirement may be met by providing either a copy of a recent roof inspection or a receipt showing the date of the most recent roof replacement. The roof system must be capable of handling the additional load of the facility. Augmentation of the structure may be required by building codes.
62. Question: If a facility owner merely purchases and takes delivery of equipment for a renewable energy facility, storing the equipment for future installation, will that alone constitute “physical construction” that is treated as “erection, construction, installation or acquisition of a proposed facility” under temporary OAR 330-090-0110(30)(g)?
Answer: A facility owner may purchase and take delivery of equipment for a renewable energy facility and that will not constitute physical construction under OAR 330-090-0110(30)(g). However, all applicants should be aware that this is a competitive review process and ODOE cannot guarantee that a qualified application will receive a preliminary certification. Anything an applicant does prior to receiving a BETC preliminary certificate is taken at his or her own risk.
63. Question: Are applicants that are not issued preliminary certification during the funding cycle June 1, 2010 through December 31, 2010, and who begin construction January 1, 2011, eligible for consideration for a subsequent funding cycle? (a) If so, must the applicant file a new application for the subsequent funding cycle? (b) If the applicant must file a new application for the subsequent funding cycle, must that application be identical to the prior application?
Answer: Applicants who begin construction prior to ODOE receiving their application for preliminary certification are not eligible for a BETC regardless of whether the applicant has previously applied, according to the definition of “Facility Start” date in OAR 330-090-0110(30)(g).
64. Question: What application materials (including which Appendices) should be submitted for a facility that includes both (i) a biodigester that produces methane from biomass and (ii) electricity generation equipment that uses methane produced from the biodigester?
Answer: Those types of facilities (projects) would normally to be submitted on the combination of the Tier Two or Tier Three General Application form and Appendix No. 1 Biomass, Wind, Hydro and Geothermal form. However, applicants should consider that this is a competitive process and any supplemental information (including information from other appendices) that would be helpful in conveying the details of the facility (project) should be included.
65. Question: If an applicant elects to use the pass-through option when the application for preliminary certification is submitted, can the applicant subsequently decide not to use the pass-through option? (a) Alternatively, if an applicant does not elect to use the pass-through option when the application for preliminary certification is submitted, can the applicant subsequently decide to use the pass-through option? (b) If the applicant is allowed to change its mind about use of the pass-through option, how should it notify ODOE of that change? (c) Does that change constitute an amendment within the meaning of OAR 330-090-0130(7), such that ODOE may decline to approve the change?
Answer: At any point in the application process, the applicant/facility owner may elect not to use the pass-through option. To make this change, the applicant/facility owner must notify the BETC Program in writing of this change and complete the appropriate pages of the final application if already submitted. This change is not considered an amendment within the meaning of OAR 330-090-0130(7)(c). However, to be eligible to use the pass-through option an applicant should elect this option on the application for preliminary certification (Question 5 on the Tier Two or Tier Three General Application), see OAR 330-090-0130(1)(c). Please be aware that ODOE cannot guarantee that it will find an applicant/facility owner a pass-through partner. Applicants/facility owners who provide their own pass-through partner will be able to move more quickly through the pass-through process once the facility receives final certification.
The Oregon Department of Energy has attempted to provide clear and accurate answers, however the department reserves the right to modify any answer if necessary. If you believe an answer was incorrectly stated please contact Elizabeth Ross at 503-373-7953.
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