Market Valuation. In a “mark-to-market analysis,” the present value of the bidder’s payment stream is compared with the present value of the product’s market value to determine the benefit (positive or negative) from the procurement of the resource, irrespective of PG&E’s portfolio. This analysis includes evaluation of the bid price and indirect costs, such as transmission and integration costs. PG&E’s analysis of the market value of the PPA is addressed in Confidential Appendix A.
Market Valuation. PG&E’s valuation methodology has several advantages over methods used by other utilities: • It is rooted in a comparison to market price forwards rather than to hypothetical model outputs for future price based on inputs such as forecast demand, modeled supply increases, and fuel market price forwards. • It is relatively rapid to turn around valuations of several PPAs at once, in contrast to the burdensome nature of running multiple cases of traditional utility production cost models with dozens of cases for each generating unit assumed built vs. assumed not built to calculate system cost differences between scenarios with each unit in vs. out. • It uses a valuation concept that is generally accepted in the electric power industry. • It provides an intuitive valuation based on the degree to which a generating unit is “in the money” with respect to market price There are some drawbacks with this approach, some of which are common to any valuation methodology for long-term PPAs: • Because western power market forwards are not liquid and transparent beyond a limited time horizon, PPAs that last for 25 or 30 years must rely on extrapolation of market forward curves for valuation rather than on direct observation of traded prices for power two decades hence. • A certain degree of interpolation or projection is required to achieve hourly granularity in price assumptions. • In the absence of functioning, liquid, transparent markets in California for Resource Adequacy or for Greenhouse Gas compliance, the valuation must rely on fundamental forecasts for the value of capacity and of GHG compliance rather than on traded forward curves. • The methodology assigns Resource Adequacy value to all offered facilities interconnecting within the CAISO except where the project explicitly identifies that it plans to interconnect to the CAISO as an energy-only resource. Such energy-only resources are deemed to have Net Qualifying Capacity of zero by the CAISO. The developer benefits by avoiding the cost of network upgrades for deliverability. However, PG&E ratepayers do not benefit from receiving Resource Adequacy value from the project, so it is appropriate to assign zero RA value in the valuation. • Xxxxxx has a concern about the extent to which projects that propose to interconnect to the CAISO through the SGIP will actually deliver the full calculated amount of Resource Adequacy to PG&E customers, in the absence of a deliverability assessment. The valuation methodology assi...
Market Valuation. General strengths and weaknesses. PG&E’s valuation methodology has several advantages over methods used by other utilities: • It is rooted in a comparison to market forward prices rather than to model outputs for hypothetical future market price based on inputs such as forecast demand, modeled supply increases, and fuel price scenarios. • It is relatively rapid to turn around several valuations at once, in contrast to the burdensome nature of running multiple cases of traditional utility production cost models with dozens of cases for each generating unit assumed built vs. assumed not built to calculate system cost differences between scenarios with each unit in vs. out. • Net Market Value is a valuation concept that is generally accepted in the electric power industry. • It provides an intuitive valuation based on the degree to which generating units are “in the money” with respect to market price. There are some drawbacks with this approach, some of which are common to any valuation methodology for long-term PPAs: • Because western power forward markets are not liquid and transparent beyond a limited time horizon, PPAs that last for up to 20 or 25 years must rely on extrapolation of market forward curves rather than on direct observation of traded prices for power two decades hence. Such extrapolated prices are unlikely to be accurate forecasts, but the ranking of Offers using extrapolated inputs might still be directionally correct. • A certain degree of interpolation or projection is required to achieve hourly granularity in price assumptions. The diurnal shape of California power market pricing is changing in response to the addition of new renewable resources, and it is rather difficult to forecast with accuracy how hourly price profiles might evolve over three decades. • In the absence of functioning, liquid, transparent markets in California for Resource Adequacy, the valuation must rely on fundamental forecasts for the value of capacity rather than on traded forward curves. These forecasts peg the value of RA at rather high and monotonically increasing levels in future years, whereas the record so far in deregulated wholesale power markets is one of boom and bust cycles where the value of capacity flies up in years of scarcity then collapses for extended periods after a burst of overbuilding new plants. • There are challenges in estimating what Net Qualifying Capacity will be assigned by the CAISO to a project that does not yet exist, and at a poi...
Market Valuation. According to its Advice Letter 3143-A, PG&E performed a market valuation of the original Shiloh Wind Project 2 PPA as part of its evaluation, taking into account contract price and transmission adders based on the project’s actual interconnection studies. The bilaterally negotiated contract was filed before the CPUC imposed a requirement for such RPS PPAs to be subjected to Independent Evaluator review, so no independent valuation of the PPA was prepared. Xxxxxx lacks all the detailed project-specific data required to perform, to the usual degree of accuracy, an independent evaluation of the value of the amended and restated contract. Based on other data provided in the past to PG&E for adjacent wind generation facilities, Xxxxxx would expect the contract to rank low in net market value (bottom quartile) when compared to Offers PG&E received in its 2014 RPS RFO; as with pricing, the competitive market benchmark for contract value has moved considerably since 2008. PORTFOLIO FIT PG&E’s 2017 RPS draft procurement plan (which was accepted by the CPUC in Decision 00-00-000 in December 2017) expressed an expectation that the utility has procured sufficient RPS-eligible energy to meet its compliance needs through 2030. As an existing contract within PG&E’s supply portfolio, the Shiloh Wind Project 2 PPA is already counted within the baseline assumption that PG&E uses when projecting when its RPS compliance position will be long or short. The amended contract is expected to continue to contribute towards RPS compliance through its delivery term through early 2029, which includes only years when PG&E expects to have excess procurement of RPS-eligible energy. On that basis Xxxxxx believes that its fit with PG&E’s portfolio is low; its production would be expected to contribute to the estimated net long position through 2029. This ranking is not a demerit of the amendment itself but simply represents how PG&E’s supply-demand balance in RPS compliance has evolved with changing demand outlooks since the original PPA was signed.
Market Valuation. In a “mark-to-market analysis,” the present value of the bidder’s payment stream is compared with the present value of the product’s market value to determine the benefit 14 Pub. Util. Code § 399.14(a)(2)(B). Advice 3884-E - 9 - August 4, 2011 (positive or negative) from the procurement of the resource, irrespective of PG&E’s portfolio. This analysis includes evaluation of the bid price and indirect costs, such as transmission and integration costs. PG&E’s analysis of the market value of the PPA is addressed in Confidential Appendix A.
Market Valuation. The market value of investments made pursuant to this Agreement shall be determined at least monthly and whenever the method of valuation authorized by the Agreement does not accurately reflect the value of Participants’ interests in such investments.
Market Valuation. In a “mark-to-market analysis,” the present value of the bidder’s payment stream is compared with the present value of the product’s market value to determine the benefit (positive or negative) from the procurement of the resource, irrespective of PG&E’s portfolio. This analysis is based on an evaluation of the contract price in the PPA. The transmission adder adjusts offer prices to include the cost, if any, of bringing the power from the generating facility to PG&E’s network. Each bid is associated with a transmission cluster based upon the location of the facility. The costs in the CAISO interconnection study are used for bid evaluation. PG&E’s analysis of the market value and transmission adder is confidential and addressed in Confidential Appendix A.
Market Valuation. PG&E did not calculate Portfolio-Adjusted Values for the bids for these RECs. That would have been consistent with its past practice in renewable energy procurement and with the 2015 RPS procurement plan’s statement that the use of PAV ensures procurement providing the best fit for PG&Es portfolio at the least cost. However, in the context of ranking competing bids for the same 60 GWh volume, a ranking by highest price should be equivalent to a ranking by highest PAV. Transmission costs, congestion costs, capacity value, project viability, and other valuation components are identical across bids because they are attributes of the same 60 GWh regardless of buyer. Other issues. In the process of soliciting and evaluating bids for the 60 GWh volume, PG&E’s primary deviation from the Energy Division’s suggested principles for evaluating fairness is that PG&E did not thoroughly define the evaluation criteria it would apply to the bids and communicate them transparently to potential bidders. There was no written protocol describing qualitative and quantitative criteria and how they would be used to rank bids. PG&E did however include this text in its e-mailed note to its contact list: “PG&E will transact with the highest bidder that meets This statement omitted any specifics of how PG&E would apply creditworthiness as an evaluation criterion. There was no communication about what would constitute acceptable credit quality or posted collateral that would meet PG&E’s requirement. In contrast PG&E’s formal RPS solicitation protocols have spelled out in some detail the security requirements for RFO participants, have provided a form of letter of credit, and detailed within a form agreement what credit ratings are acceptable to PG&E for counterparty’s commercial bank to provide a letter of credit. When applying non-valuation criteria it is particularly important to provide participants with clear guidance on how their proposals will be evaluated in order to ensure that participants view PG&E’s methodology as fair. While PG&E has, with CPUC approval, used credit as a criterion in its formal RPS solicitations for several years, its use has always been accompanied by a written description of the evaluation criterion in a public solicitation protocol. In its decisions establishing the RPS program, the CPUC directed “the utilities to use transparent criteria in evaluating the tie-breakers used to rank bids”.5 The practice in this e-solicitation falls short of the ideal. I...
Market Valuation. Building Value New Year Built Effective Year Built Condition Code Remodel Rating Year Remodeled Depreciation % Functional Obsol External Obsol Trend Factor Special Condition Condition % Percent Good RCNLD Dep % Ovr Dep Ovr Comment Misc Imp Ovr Misc Imp Ovr Comment Cost to Cure Ovr Cost to Cure Ovr Comment 0 0 1.000 0 OB - OUTBUILDING & YARD ITEMS(L) / XF - BUILDING EXTRA FEATURES(B) Code Description L/B Units Unit Price Year Cond. Cd Percent Grade Grade Adj. Appr. Value SHED SHED Shed Shed L L 1 1 100.00 400.00 AV AV 11 C C 0.70 0.70 100 400 BUILDING SUB-AREA SUMMARY SECTION Code Description Living Area Floor Area Eff Area Unit Cost Undeprec Value Property Location UNASSIGNED Map ID 46A/ 0/ / 0/ Xxxx Frontage E XXX HWY District: 02 Fort Chiswell State Use SFD - Suburban - Vac Vision ID 2400 Account # 2658 Bldg # 1 Sec # 1 of 1 Card # 1 of 1 Print Date 2/8/2023 12:28:41 AM OTHER ASSESSMENTS CURRENT OWNER TOPO UTILITIES STRT / ROAD LOCATION CURRENT ASSESSMENT GATEWAY ENTERPRISES, LLC E5 PROPERTIES, LLC PO BOX 806 WYTHEVILLE VA 24382 0 Well Type Description Code MARKET VALUE USE VALUE 00000 XXXXX XXXXXX, XX 0 Septic Land 200 26,000 26,000 SUPPLEMENTAL DATA Tax Map # 046A-001-0000-0005Area Code 01:Wythe County Ag Dist Co 00:None User Field User Field User Field User Field Appeal Ch N Appeal No N:No VISION GIS Id 046A-001-0000-0005 Associated P Total 26,000 26,000 RECORD OF OWNERSHIP BK-VOL/PAGE SALE DATE Q/U V/I SALE PRICE VC PREVIOUS ASSESSMENTS (HISTORY) GATEWAY ENTERPRISES, LLC 210002266 07-21-2021 Q V 150,000 12 Year Code Total Assesse Year Code Assessed V Year Code Total Assesse XXXXXXX XXXXXXXX XXXXXXXXX 180002736 0 10-09-2018 U V 0 00 2022 200 26,000 2021 200 26,000 2020 200 26,000 XXXXXX XXXXXX X & XXXXXX X 480098 0 02-13-1997 U V 0 00 XXXXXX XXXXXX ETALS 0 0 01-01-1900 U V 0 00 Total 26,000 Total 26,000 Total 26,000 This signature acknowledges a visit by a Data Collector or Assessor Code Description Number Amount Interest
Market Valuation. In a “mark-to-market analysis,” the present value of the bidder’s payment stream is compared with the present value of the product’s market value to determine the benefit 10 Advice Letter 3938-E-A was corrected by substitute sheets submitted on February 15, 2012 11 Pub. Util. Code § 399.14(a)(2)(B). 12 D.00-00-000. (positive or negative) from the procurement of the resource, irrespective of PG&E’s portfolio. This analysis is based on an evaluation of the contract prices in the PPAs. PG&E’s analysis of the market value is confidential and addressed in Confidential Appendix A.
