NYSERDA Offshore Wind Technical Conference

Good afternoon everyone, I'm Doreen Harris with NYSERDA Thank you for joining us today for our technical conference regarding the New York State Offshore Wind Standard

I'm pleased to be joined here today by my colleagues at NYSERDA whom I'll introduce in just a moment, but also the chair of the New York Public Service Commission, John Rhodes, and the President and CEO of NYSERDA, Alicia Barton We're, again, thankful to have all of you here today We also have a strong presence via webinar, so thank you all for joining us We expect this technical conference to run until about 4:00 pm

today With regard to the agenda, first I'll describe some logistics just for your awareness We then will have Chair Rhodes and President Barton offer some welcoming remarks, after which I will provide an overview of the Public Service Commission's July 12 Order which we're here today to discuss, and then the team at NYSERDA is going to provide an overview of a request for information (RFI) that we issued last Friday, July 20th We're going to provide an overview of that RFI and the context of the Order and take any questions you may have regarding the questions that NYSERDA has asked of you in the RFI So we will certainly have plenty of opportunities to take your questions but we will start with specifically the remarks, again, from the Chair and the President

Logistically, of those in the room, you will have the opportunity to ask questions here at the podium in a bit We also though will take questions via webinar via the chat function, so if you have questions and you're on the webinar, please do ask them I will say that if the question pertains to a particular topical area that one of my NYSERDA colleagues will be covering in detail later in the conference, we may hold your questions to that particular areas time in the agenda, but we do ask your questions as we're committed to answering as many as we possibly can today If you happen to have technical issues you can email us at offshorewind@nyserdany

gov, we'll be happy to help you in any way we can throughout this meeting And lastly, to answer the inevitable question– yes we will be recording this webinar, and we will be posting the slides on our website in the next few days for all to review and have at their disposal So again, thank you for joining us, and with that, I will turn the podium to Chair Rhodes and President Barton to offer some introductory remarks Thank You, Doreen, and welcome and thank you all for joining us today, in person and online, to discuss offshore wind development in New York If you are participating, you are a stakeholder, and as a stakeholder, your continued involvement in the State's development of offshore wind is foundational

Our job as the State is to set things up so that you can successfully deliver cost-effective, responsible, impact minimizing, appropriately sited, clean, reliable, and system valuable offshore wind That's our job to set it up

Your job is to deliver it in the nature of the development of this compelling resource takes place in the way that I just described So we appreciate the time you're taking today to learn more about the recent Public Service Commission Order on the topic of the State's first phase of offshore wind procurement and NYSERDA's RFI that hit the streets last Friday, July 20 Let me take a few minutes to give you an overview the big-picture overview on the subject of offshore wind Alicia Barton will do the same and also will follow me with additional details and additional topics Offshore wind is critical to Governor Cuomo's energy strategy and plays a vital part in the State's agenda to combat climate change and advance clean energy resources and a energy economy New York's signature nation-leading Clean Energy Standard mandate requires, and I think you all know this, for the State to obtain 50% of its electricity supply from renewable resources by the year 2030, and we know that sets the stage for a very large opportunity for offshore wind, an opportunity we know can be up to 1/3, or approximately 1/3, of that objective Furthermore, besides being part of the Clean Energy Standard, it's also in its own right an important objective of the Governor

He announced, about 18 months ago, that the State would build 24 gigawatts (GW) of offshore wind by 2030, then in this year, in the State of the State address in 2018, he took the first step towards achieving that goal when he called for the procurement of at least 800 megawatts (MW) of offshore wind power between two solicitations to be issued, the first no later than the end of this year, and another one next year To support these goals, and under the guide of Governor Cuomo, NYSERDA when ahead and developed the Offshore Wind Master Plan It came out around the beginning of this year, a comprehensive the roadmap to encourage the development of that amount of offshore wind Supported by more than 20 Studies on a variety of environmental, social, economic, regulatory, and infrastructure related issues, and evaluated a study area of about 16,700 square miles of ocean, generally south of and parallel to the coast of Long Island, and it included and was supported by, NYSERDA's Offshore Wind Policy Options Paper, which is basically the suite of actions

described suite of actions that the Commission could consider in developing the Order that was arrived at earlier this month And the Options Paper developed policy options for that first 800 MW phase of offshore wind procurement That same Options Paper, along with maps and in general, concluded some very important facts: that offshore wind can provide numerous environmental and economic benefits, as well as providing and playing an important role in reducing the greenhouse gas emissions (GHG)

It can play an important role in addressing what we call system issues because it is beautifully situated in close proximity to the downstate load center It provides a nice high capacity factor and resource that is superior to other weather variable renewable sources of generation that are possibility So because of the proximity of offshore wind, we look to substantial liability and fuel diversity benefits to the electric system Of course, it has also the potential to create thousands of jobs for New Yorkers in construction and in operations and maintenance Also, it provides significant public health benefits by displacing fossil-fired generation in the downstate area We are confident that this resource's time is now It is desireable, valuable and ready for prime time, and clearly, there were compelling reasons behind the Commission's decision to adopt the Offshore Wind Standard and to authorize the Phase 1 800 MW procurement at this time– that's why we did it on July 12

With this Order, as I mentioned, set things up for developers, and we set them up with some objectives in mind We are looking for the most cost-effective approach to developing the resource, and we were mindful of the cost benefit analysis which noted that the cost of the power and carbon benefits of this 24 GW portfolio paid for itself Meaningfully, the GHG reduction benefits alone estimated around $19 billion net present value (NPV) or approximately enough to justify the cost of the State's investment in this portfolio

Under the Offshore Wind Standard, and in continuity with the Clean Energy Standard, NYSERDA will serve as the procurement agent for the offshore renewable energy credits (ORECs) NYSERDA will coordinate its procurement with the New York Power Authority (NYPA) and Long Island Power Authority (LIPA), and you will hear later today about how the State will move forward with some of the details about procuring offshore wind In the initial phase, ORECs associated with the output of approximately 800 MW will be procured over a period not to exceed two years, with the first solicitation issued in the fourth quarter of this year This is a schedule that is designed to and will allow developers to take advantage of Investment Tax Credit (ITC) prior to its expiration and provide considerable ratepayer benefits by doing so The Order is also clear and deliberate in requiring its awarded project developers to consider the interests of ocean users such as commercial and recreational fishing, environmental stakeholders, and coastal communities in the offshore wind project development

The Order also authorizes NYSERDA to ensure that economic development activities resulting from this procurement take the form of high quality employment opportunities for all New York We are looking to harness the power of competition to spur solutions that are best for New York and New Yorkers across a wide spectrum of considerations, and we are doing this to ensure that we achieve a resource that delivers on its promise– its promise to be comprehensive, responsible economic, clean, cost-effective source of energy for New York and we need your best input to achieve that Today's technical conference is one more way in which New York is listening to interested stakeholders to ensure that we responsibly develop offshore wind and position New York to jumpstart that industry in the US We look forward to your input today and in the coming months as NYSERDA acts and works to fulfill the directions set out in the Commission's Order earlier this month, and with that, I turn it over to Alicia Barton

You may know her, I'll introduce her She's the President and CEO of NYSERDA, and she'll describe where we go from here Alicia Thank you, John, for the introduction, and for being here personally to lend your voice to the incredibly important conversation that we're happy to hear today Thank you to everyone for attending, and I want to echo John's welcome to those of you who are participating via webinar, as well as those of you who are here in person

It really is outstanding to have had such a robust response to this technical conference which was pulled together on relatively short notice following the Commission's Order on offshore wind It really evidences the sense of urgency we have in trying to move quickly to advance this incredibly important conversation I'll just start by saying that for me, today is a really exciting day, and looking around the room I know for many of you as wel, offshore wind has been a long time in coming to New York For many many years, we have been thinking about this and talking about this opportunity, and it was, for many years, a promising idea that was however just over the horizon So with the Commission's recent Order, we are now embarking on a full-scale approach to bring offshore wind to market in New York State, allowing us to take enormous strides forward towards our climate and clean energy goals and to launch an entirely new industry that we believe will have it homeplace here in New York as well

As John just described, the Commission's recent Order underscores Governor Cuomo's unwavering commitment to make sure that offshore wind is developed cost-effectively, responsibly, and importantly, to do it very soon This is the vision that the Governor has laid out towards achieving a market of 2,400 MW of offshore wind by 2030 knowing that we need to get a start on that work today, and this is the work that he has charged agencies like the Public Service Commission (PSC), the Department of Public Service (DPS) entity, and NYSERDA of doing the work to achieve The Commission's authorization of a Phase 1 offshore wind program to deliver approximately 800 MW of new, clean offshore wind energy presents New York's first large-scale opportunity to jumpstart development of offshore wind and NYSERDA stands ready and eager to work with our partners at DPS, with NYPA and LIPA, and importantly, as John noted, with stakeholders from all corners, from all perspectives, to launch this initiative in the next few short months We know as NYSERDA that we have a lot of work to do in a short amount of time, which is why, again, we wasted no time trying to pull together this conversation in issuing a request for information (RFI) that we hope many of you will respond to to provide us with the details, because the details matter, we know that, and we intend to do everything in our power to work with stakeholders to get them right That's why we need your input and engagement, and again, the first step is our appreciation for the representation in today's dialogue

Our goal for implementing this order are really embodied in and flow from the Commission's Order and are quite clear, but I'll just summarize some of the highlights and build upon John's remarks, which are that we are looking to procure approximately 800 MW of offshore wind to jumpstart development and to accelerate our case to bringing forward the many benefits– environmental, economic, and energy system benefits that John outlined as well in his remarks This timeline will also allow developers the opportunity to capitalize on the federal tax credits to the benefit of New York ratepayers before they expire, and allow a catalytic investment in the New York-based supply chain We are looking to structure our procurement to facilitate competition among developers and drive down cost for New York ratepayers We believe competition is important and will be a good thing to this process and will bring benefits to the State of New York, and we do, as we have been quite clear about, in the Offshore Wind Master Plan and elsewhere, we are looking to capitalize on our opportunity to build a new industry with a home base in New York State This is an opportunity that NYSERDA has previously estimated could create 5,000 jobs with $6 billion in economic activity by encouraging the use of local labor, supply chain commitments, and other economic benefits for New York State

The Commission's authorization of the use of project labor agreements (PLA) and prevailing wage are the first such endorsement by any of the states that have sought to procure offshore wind, and will ensure the New York workers directly benefit from the construction of these projects And to ensure that the resource is developed responsibly, the Commission also required consideration of environmental factors and commercial fishing considerations to a degree that I believe no other state has previously incorporated into its offshore wind programs programs as well, reinforcing the seriousness with which New York State views these issues These procurements will also accelerate the phenomenal case of offshore wind cost reductions that we've already seen in other markets by providing certainty to the industry regarding New York's commitment, and a scale that will also attract supply chain investments and jobs directly to New York State Following my remarks, we will have a detailed presentation of the Order and of the request for information (RFI) that NYSERDA has now issued to solicit input from all stakeholders about how these important considerations can best be implemented within the context of the forthcoming request for proposals (RFP), and we do hope that you'll respond in detail to that RFI to give us the information and context we need as we start drafting that procurement Launching this RFI will also complement, and more importantly, the RFP later this year, will complement the years of work NYSERDA and many partners across New York State government have undertaken over the past years with the industry, including engaging directly with offshore wind development supply chain companies to provide local jobs and incentivize the development of related port infrastructure, promotion of and investment in some of the port infrastructure in New York State ensuring that New York facilities are suitable and available to the industry, investment and partnership opportunities and workforce development ensuring that technical and labor institutions are positioned to train and certify offshore wind workers, and NYSERDA has already made financial commitments to support this type of workforce development

And these efforts also build upon our recent exciting success in securing an award from the federal Department of Energy to build a new National Offshore Wind Research and Development Consortium to be housed here in New York, on Long Island specifically, to convene the industry and global leading research institutions to undertake projects that will drive down the cost of offshore wind even further It's clear to me that this is a significant moment in the history of our State's efforts to transition to a clean energy based economy NYSERDA is delighted to have the Governor's support, and the Commission's support in the context of its recent Order, for this critically important next step, and we welcome the participation of each and every one of you as we look to launch the first large-scale offshore wind solicitation for New York State later this year Thank you Thank you Chair Rhodes and President Barton, we really do appreciate the time that you took not only today, but in the efforts that went into the issuance of the Order a couple of weeks ago, so thank you very much, we're glad to take the torch and run with it as we move forward, so thank you

So again, we at NYSERDA are working toward the implementation of our first solicitation as was ordered by the Commission in their July session We believe that it would be helpful to you if we provided a brief overview of the Order, which I will do now I will tell you that following this overview, the team before you today will be reviewing the RFI that we have issued in the context of the Order, so I think what you'll see is that we'll get more and more specific as the afternoon goes on with regard to the specific terms within the Order, and also how we at NYSERDA are seeking your input on the implementation of those particular topics So I will now provide, again, a brief overview of the Order itself which we just received a very good overview of by both Chair Rhodes and President Barton I think it's important to note, at the session when the Order was issued, the Order directed NYSERDA, in consultation with NYPA and LIPA, to procure approximately 800 MW of offshore wind between 2018 and 2019

So this Order is available if you have not been following it in the Commission's case order, if you go to the Public Service Commission website and search for Case "18-E-0071" the Order is available there I will tell you that the Order itself, it has an appendix that you should also read that is included as two separate links on that website, and if you have any issues finding that please do reach out via our offshore wind email address As was just described we see this as a first phase of procurement, that's how it was framed in the Commission's Order This is towards the State's broader broader goal 2,400 MW of offshore wind by 2030, and clearly in fulfillment and support of our Clean Energy Standard mandate So the way the framing of the Order works is essentially that offshore wind procurements are towards the goals in the CES, the clean Energy Standard, and do not change in any way our existing commitments toward any renewable or energy efficiency efforts on the part of the State towards that mandate attainment

So, with regard to timing, the Order was quite prescriptive in saying that NYSERDA will issue its first request for proposals (RFP) in the fourth quarter of 2018 We are working tirelessly to achieve that goal, and know that we will We're working to do so, frankly, as soon as possible to issue this request for proposals, so thus the quick turnaround with the RFI You can expect similar turnarounds from NYSERDA as we move to issue this first RFP, again, as soon as possible but no later than the end of 2018 The Order also speaks to a very important coordination role within the New York Power Authority and the Long Island Power Authority

I'll be discussing that in a bit more detail later on this afternoon, but it is important to note that NYPA and LIPA are not jurisdictional to the Public Service Commission but are supportive of the State's policies, and the order speaks to the fact that NYSERDA should first coordinate its RFPs with NYPA and LIPA, so that's actually a very similar approach to that which we utilize on our land-based procurements for Tier 1 resources in New York where we can consult with them regarding our procurement volumes should they want to participate in our RFPs, but also that they may choose to do so on their own as is the case, LIPA obviously has an agreement for the State's first offshore wind project, the South Fork Wind Farm, resulting from their own RFP Similarly, NYPA last year issued an RFP for large-scale renewables The Order is clear that if that is an interest of NYPA and LIPA, that that certainly can be accommodated within the construct of NYSERDA's RFP There is, the policy does speak to, and the Order does speak to the fact that a second solicitation may be issued in 2019, and that really depends on the results of NYSERDA's 2018 solicitation So should NYSERDA's 2018 solicitation result in awards exceeding 800 MW of offshore wind, we are to go back to the Commission for authorization to issue our 2019 RFP

In the absence of that, we would issue a 2019 RFP without their authorization, as it was included in the July 12 Order With regard to funding, the funding mechanism for these ORECs, the offshore wind renewable energy credits as they're deemed, is very similar to the requirements that are placed on new york's load serving entities (LSEs) for the procurement of zero emission credits (ZECs) or Tier 1 renewable energy credits (RECs) under the Renewable Energy Standard (RES) wherein there is a pro rata requirement, an obligation, placed on the load serving entities to procure from NYSERDA their proportional share of any ORECs that we procure through our RFP So that is the basic funding mechanism that exists Similar to the Clean Energy Standard order from August of 2016, should NYSERDA require funding backstop there is a requirement in the Order that New York's electric distribution companies administer a process to provide backstop funding to NYSERDA should there be a shortage of funding in any way, and the reason for that is that we obviously want to provide a very credit worthy contract for the project developers through our funding mechanism that is locked solid with regard to the means by which we fund our solicitations The means by which NYSERDA will award the agreements is slightly different than that which had been theorized in the Notice that was issued prior to the Commission's Order, so it's important to note that the Commission Order establishes three criteria that NYSERDA will utilize in awarding projects

The first will be based on the price that is bid by the project developer, and that will be 70% of the weighting that will be utilized It is a topic that my colleague Matt Vestal will describe in more detail in a bit, but suffice it to say that we will utilize the net present value calculation similar to our Renewable Energy Standards Tier 1 solicitation, and that we will utilize a weighting that will depend on a couple of different options and requirements really for the nature of the bids that we receive We also will look, similar to the Renewable Energy Standard, at the economic benefits that will accrue to New York State should the project be awarded and constructed, so the Commission's weighted this at 20% of the scoring criteria My colleague Allison Rose will describe that topic in more detail And then lastly, the viability of the project will be 10% of the weighting that we will utilize

This is actually an increase from versus the Notice that was issued, and the Commission's justification in doing so was the reality that we are in a circumstance with where we are seeking to account for expiring federal tax credits in our RFPs, and the surety of a viable project in being able to capitalize on those federal tax credits is important– important enough that viability's weighting was raised from 5 to 10% in the ultimate Order And again, Allison will describe in more detail NYSERDA's questions around the topic of project viability in a bit With regard to procurement, and by procurement I mean the bids that are actually received, what is the structure that will ultimately result for any awarded project from the perspective of policymaking and the structure of the agreement itself, there are actually two structures that will be receiving bids for The first will be a fixed price bid, similar to that which we receive for our Tier 1 Renewable Energy Standard resources, and the second will be for a adjustable OREC price that was referred to in the Options Paper as an Index OREC So Matt will describe what those goals mean in a bit, but we will have the ability through the Order to award a contract for either one of those structures, and the award would be based on which structure yields a more economic price for New York's ratepayers according to our evaluation criteria

However, in the event that the Index OREC is selected for an award, the Order does specify that the agreement should specify conditions that would trigger a reversion to the fixed price OREC structure We will be evaluating those bids on a weighted basis, which is a weighting to be determined An appendix to the Order does describe an illustrative example of how the weighting may work We'll describe that more in a bit, but the 70% score will be based on the weighting that is described and implemented by NYSERDA in the RFP Again, similar to the Tier 1 Renewable Energy Standard procurement, there will be a maximum price that will be established in advance of the RFP above which NYSERDA will not make any awards, or an award and potentially any award

That benchmark price can be based on a number of techniques which we'll also be describing today And lastly, the Order did leave open to NYSERDA the flexibility to specify a contract term between 20 and 25 years for the agreements resulting from this RFP With regard to transmission, the transmission arrangement first, again, are very similar to that which we utilize in the Renewable Energy Standard whereas we do solicit proposals from projects outside of the New York Control Area (NYCA) subject to delivery requirements that are quite prescriptive The Order cites back to the Phase 1 Implementation Plan that was adopted by the Commission around the delivery requirements that exist, again, for other renewable resources in New York State, so you could look back to that Order with regard to specificity, and we do have some questions around that in our request for information But beyond that aspect of a delivery requirement, there was a decision before the Commission as to how New York State would look at transmission for this first phase of offshore wind projects which I know has been a topic of significant discussion and comment both in on our proceeding and in other states, and the Order was very prescriptive in saying that the transmission responsibility for Phase 1 procurements will be left to the project developer, that is, the generation developer

That generation developer is free to arrange any agreement for transmission with an independent transmission developer, but the responsibility, again, would lie with the generation developer themselves To the extent that any project includes overbuilt transmission, there would not be additional value accorded to those proposals And last, when we look at the project viability category, we should consider how the transmission aspect of the proposal may or may not influence the viability of the project itself Chair Rhodes mentioned the fact that the Order does make very specific statements around special provisions associated with NYSERDA's ultimate award, and those are primarily going to be covered today by my colleague Greg Lampman and Peter Keane First, the Order does authorize NYSERDA to include project labor agreements and a requirement for prevailing wage in any awarded project agreements

There will be more discussion about that later in the presentation, but also that we ensure that any awarded projects be constructed and operated in a manner that is reflective of the interests of ocean users such as commercial and recreational fishing, environmental stakeholders, and coastal communities And to that end, the Order was quite deliberate in its direction for NYSERDA not only to engage the commercial and recreational fishing communities, but also the environmental communities, as we have over the last several years, and continue to do so through our technical working groups to support responsible development of offshore wind But also, to integrate the work products of those technical working groups into our RFP process and into the associated agreements to the extent that there are specific practices that may be adopted through those technical working groups Again, Greg Lampman will describe this in more detail in a bit, but that does include a requirement that any awarded developer include a fishery or sorry, any proposer include a fisheries mitigation plan, and any best management practices that may be applicable at the time of the bid To the extent that fishing compensation is included in that fisheries mitigation plan, that compensation would be accommodated in the economic benefits category of NYSERDA's RFP

And lastly on visual impacts, the Commission did speak in the Order around the importance of minimizing visual impact resulting from any offshore wind projects, and that NYSERDA in its RFP and in its resulting contract would consider those issues It did cite to the New York State Offshore Wind Master Plan which did conclude that a 20 mile setback from any coastal position would eliminate or minimize visual impact under most daylight conditions, but it did leave discretion to NYSERDA in the execution of its RFP to tailor any setback requirement that would be part of its RFP through the consideration of environmental and economic benefits of the project resulting from the procurement We do have a couple of questions in the RFI around this topic, and Greg Lampman will be describing them Lastly, the Order does require these of lighting control to minimize nighttime visibility in any project that is awarded from this RFP So, that's the summary of the Order as it exists

Again, I would encourage you if you have not yet read the Order, that you do so It's pretty succinct and provides I think not only justification but also guidance as to the thinking of the Commission in issuing the Order If you have questions about the Order itself, we will pause in just a minute We're happy to take questions I will say that we at NYSERDA don't speak for the Commission, but if you have clarifying questions about the Order, we'd be happy to take them

But now turning to the next step, and the next step began on July 20th, last Friday morning, when NYSERDA issued a request for information (RFI), and that request for information was specific to the questions that were left open in the Order for NYSERDA's discretion in implementing its first phase of RFPs And so the RFI was issued, again, on July 20th, Friday If you did not receive an email with the RFI and would like to get a copy, it's available on our website at the link you see on the screen here, and our goal in issuing the RFI is specifically to obtain the feedback of stakeholders around specific technical issues and implementation issues of our RFP that we again are ordered to issue in the fourth quarter of 2018 So you'll see in the RFI it's organized by specific topical areas that we're going to cover in some detail here today relating to schedule, quantity, price, non-price evaluation criteria, and other evaluation metrics that we may utilize in our RFP We have about a three week turnaround time for your responses, they are due by Friday, August 10th at 5:00 p

m ET You can issue your responses to our email address at offshorewind@NYSERDAnygov And if you could include the subject line "RFI osw – 2018 Comments" in your response, we'd greatly appreciate it

Just to go through the content that we're really looking for, although the RFI is comprised of a wide variety of different questions, in the dozens, we would not require anyone to answer all of the questions If you have particular areas of expertise that you can provide to us, make no mistake about it, we would be very pleased to receive even just a handful of responses if you have expertise in a particular topical area, but we do ask in the interest of brevity to please limit your responses to less than 30 pages and provide them in a manner that we can utilize searching functions in reviewing the responses We will be making all RFI responses public We will be posting them as filed on our website so if you have confidential information that you do not wish to share publicly, do not include them in your RFI response Organizationally, the RFI is split into a number of different areas for feedback that we at NYSERDA will be providing you a detailed dive into those topical areas now

First, I will be providing an overview of the first two topics, the procurement schedule and procurement quantity After that, we'll pause for any questions that have come in either via the chat function on the webinar, again, webinar attendees please do provide your questions I'll then turn the presentation to my colleague Matt Vestal to discuss the next four topics including interconnection and deliverability, details around the two OREC pricing options that we are ordered to include in our RFP, and lastly the evaluation of the bid price component of our award After that, we'll pause again to take questions That will then turn the presentation Alison Rose who will discuss the economic benefits and project viability non-price categories included in the RFP with specific questions that we've asked of you

Then Greg Lampman will describe topics related to marine, environmental, and other impacts And lastly, Peter Keane from Counsel's Office will describe eligibility and contract provisions And after each of those sections, again, we'll take your questions both in person and we'll handle any particular topical questions that have come in via the webinar at those intervals So I hope this organizational structure will work, so again, those on the webinar feel free to bring in your questions at the appropriate time or now, we'll filter through them as needed to get them asked at the right point in time So first, around schedule, again, we will be issuing our first request for proposals in the fourth quarter of 2018, this is what the Order requires and you can see on the screen that's how we represented it

As described, we may issue a second solicitation in 2019 Whether we need to go back to the Public Service Commission for an Order authorizing that solicitation depends on the relative amount of MW awarded through the 2018 solicitation So, specific to the RFI, we are asking a couple of questions which we feel are quite relevant given our schedule that we are trying to keep Again, we are aiming to issue the RFI– or RFP– as soon as possible, however, what we're asking of you the stakeholders who would be involved in the submission of bids, we're interested to know how much time you would need to develop your proposals in a way that provides, again, the best price to New York ratepayers So that means, how much time would you need? What would the response date be in your in your estimation, the most optimal response dates? And then secondly, we're interested to know what is driving that answer

Are there particular studies or outreach or other information that you will have available at a particular point in time that would drive you to say that there's a particular window that you would want the bid to due within? So those are questions we are asking in the RFI around schedule, and second, we are looking for these bids to be binding for a period of 6 months regarding the price that you would bid into the RFP So we're interested to know if this duration is reasonable, or if a shorter or longer period would make sense for you For your information, we are obviously looking to move this process through as quickly as possible, but to the fact that project developers do need a certain window of time in order to provide the best fit that they can, so that's really the logic behind these questions that we're asking, because we're interested to know how fast we really should move to get the best results And then with regard to quantity, the Order done state that over two years, 2018 and 2019, Phase 1 of the Offshore Wind Standard, will procure ORECs associated with the output of approximately 800 MW of offshore wind The Order does allow NYSERDA to award more than 800 MW in 2018 if sufficient attractive bids are received, but we could also reduce the size of our initial solicitation if NYPA and LIPA, and/or LIPA, pursue an immediate solicitation which is outside of NYSERDA And lastly, as I said, if we procure 800 MW or more in 2018, we would require Commission authorization to issue a 2019 solicitation So the questions in the RFI are around quantity, and the quantity questions that we've asked are first, whether there is a minimum that we should request in our RFP, and if there is a minimum, what should the minimum be and why? And similarly, of course we're interested to know if there is a maximum? Is there a theoretical maximum above which New York State should not award a bid? secondly, we're interested to know about the value to projects and industry in having flexibility

Should we be looking for multiple bids with different capacities, and should we specify those capacities, or should we allow the bidders to determine those capacities based on some other factor which may drive the quantities that you feel you are best suited to bid? And lastly, we ask, what should the RFP include to promote economic development or tax benefits? Again, one of the driving forces behind this Order and the quantities that are included in this first phase and specifically in 2018 RFP have to do with tax benefits, so if there's something particular that we should include with regard to quantity that may maximize those benefits, we would certainly want to know from you any particulars that we should be aware of in making those requests So with that, I will pause, happy to take any questions either in person or via webinar on really the Order itself and/or the topic of schedule and quantity around the procurement at this time So I'm going to pause, if you have– if you are here in person and you have a particular question, we would ask that you ask your question up here at the podium To the extent there's multiple questions, you can just form a nice line or have a seat in the front row We'll do our best to get to all the questions

And while you make your decisions here in the room, I am going to turn and see if there's any questions via webinar Okay, while the folks in the room are making their decisions, I do have a couple questions via the webinar, the first I believe I have answered which was a question about the circumstances upon which NYSERDA would need to go back to the Commission for authorization to issue a 2019 RFP That would be based on whether we awarded 800 MW or more in the 1st 2018 RFP The second question asks, when does NYSERDA anticipate making awards resulting from its 2018 RFP? I would say that the questions that we're asking around schedule are really driving to that point which is obviously a question of the potential bidders around what time frame they believe they would offer their best pricing to NYSERDA, and our commitment of course is to respond to those bids as quickly as possible We recognize the imperative of capturing tax benefits, federal tax credits, that are expiring, so the question is really I think one that we would pose back to those who are likely to bid around how quickly they believe they could respond to our RFP

And the last question I have at least via webinar has to do with the timeline for NYPA, LIPA, and NYSERDA's coordination for Phase 1 That time line is now We are working closely with NYPA and LIPA around this first procurement in 2018 to determine really their approach and how that integrates into NYSERDA's procurement, again, for Q4 of 2018 So that is rapidly evolving as we speak So let me just ask if there's any other questions via webinar

So again, there's a couple of other questions that have come in via webinar but I believe they're related to the topics that we're going to be discussing now Looks like there's no questions in the room, oh Fred, come on up Thanks Doreen, and complements to you and the entire PSC/NYSERDA team on a really thoughtful and comprehensive Order and, I look forward to responding Just a couple process questions that may have a bearing on our answers, and I should know the answer this first question, but, in terms of how long the offer should remain binding, remind me, does NYSERDA have the ability to enter into a contract without going back to the Public Service Commission, or does the Commission need to to ratify those choices? Thanks Fred, Peter, do you want to take that question We'll probably get into it later but it's timely now to talk about the approval process

As Doreen said earlier, we're not in the business of interpreting Commission Orders, but my clear understanding is there is no conditional approval process required once we choose a winner Similar to the land-based side we do for Renewable Energy Standard solicitations, there's no 'go back to the Commission process' required We don't need a new Order from the Commission for instance to award any land-based I guess my second process question is whether you anticipate issuing a draft RFP and then going out for public comment on that, or is this our one bite of the apple? Sure, yes, it's a good question, and one that we would like to build in to our schedule the opportunity to issue a draft RFP and a draft standard form contract for a similarly quick turnarounds that have comments from potential bidders We are working to in an attempt to do so soon after we receive your comments in response to the RFI, so I would say that it is something we are working to accommodate given the fact that obviously we want to issue this RFP in a manner that is not only reflective of your feedback, but again, that we get the details right around the words that really matter a lot in an agreement and in an RFP

That's really helpful, thank you Good afternoon, my name's Howard Kosel from Anbaric, and likewise, congratulations to NYSERDA on executing the Master Plan A question on 'firm and binding' Firm I think is but binding, does that include all internal approvals, board approvals, all necessary such that, if awarded, we would be bound to contractually execute? I'll just refer to what we do currently on the Renewable Enery Standard side We consider the submission of approvals of an offer based on the terms in the contract such that NYSERDA can form a contract by accepting We do, however, require within a reasonable amount time, I think it's about 30 days, that you provide the corporate sort of confirmation that the authority has, you know, been given to the execution parties, etc, to enter the agreement

But yeah, we will consider an offer when submitted, we understand there's, you know, corporate sort of action that might often need to take place I should have given the context of it Most of us, we have investors, have an approval process that we have to go through, and would that have to be done prior to submission in response to an RFP, or as you suggested, that once an offer is made, then those approvals would be required What do you put in the proposal, and again, this is a good question, this would fall under development, but NYSERDA can't be put in a position that we make an award and, you know, some board requirement, you know, isn't completed such that you have to back away, now that wouldn't be acceptable to NYSERDA I don't think certaintly Thank you

Hey, good afternoon everybody My name is Clint Plummer, I'm with Deepwater Wind, and again, congratulate NYSERDA and the PSC for the tremendous work on putting together this package of information A quick question on the coordination between NYSERDA, LIPA, and NYPA Will the capacity that NYPA and/or LIPA be purchasing if they decide to go forward be a subset of the 800 MW, or would it be added to, and if so, would that be known as part of the RFP that's released I'm looking to Pete because there's a specific sentence in the Order that I wanted to reference, do you have it off the top of your head? I could paraphrase it, it says the participation by NYPA or LIPA does not have to be, you know, sized based on their proportional load etc

, so again, the Commission maybe will have to weigh in, or at least staff, but my feeling is those are additional Calls for decisions to be made about quantity, as well as I think there are two ways that this could come about One is, either of the other two power authorities go out on their own I think there is an option at theoretically that they could join with us and just make a long-term financial commitment towards whatever capacity we procure In either case, I don't see those as being automatically subtracted from our Phase 1 goal

Yes, in fact, I've now found the citation in the Order, thanks Pete, it on Page 27 and it exactly says, "The quantity of ORECs that is procured by NYSERDA, NYPA and/or LIPA towards the Phase 1 goal need not be limited to the proportional share of retail load to be served, but instead could be based on quantities deemed efficient for each particular solicitation or award" So I would agree with Pete around that interpretation Thank you We did have another question come in via webinar which is asking, if there were, let's just say two bids issued in 2018, and we ended up going out for another RFP in 2019, would that bidder have to submit those bids over again in 2019 I think that's the nature of the question, and the answer to that would be yes

If NYSERDA issued another RFP in 2019, it would be a new RFP with potentially slightly modified terms but it would be in a request of new bids from eligible proposers And I think that wraps up questions around the topics of procurement quantity and schedule, very good questions, thank you all So I will now turn the presentation over to my colleague, Matt Vestal, to talk about the four topical areas around interconnection, the various bid types, as well as the bid evaluations as ordered by the Commission and as included in our RFI Great, thank you Doreen As you just mentioned, I'll be covering those subsequent four sections of this presentation after which time we will again pause for questions on those topics

And so first, we will cover interconnection and deliverability, and as seen in the Order, the Commission certainly recognizes that the projects eligible to bid into the Phase 1 procurements are not limited to those just off of New York shores, so some bidders may be located more proximately to the shores of other states And so along those lines, the Order does state that energy delivery, however, does need to be contractually guaranteed within the New York Control Area, so that is either directly through an interconnection into New York or through with an adjacent control area, again, with transmission rights into New York Control Area The Order also explicitly states that the transmission responsibility for Phase 1 procurements will be isolated and held to the project developer themselves This does not preclude developers from entering into partnerships or other relationships with transmission developers, however, NYSERDA does hold on to the ability to judge the projects overall project viability based on any and all agreements that the developer pursues Continuing on to the next slide, the Order also notes that any overbuilt transmission will not be explicitly awarded additional value in the evaluation process, and so while projects may not be limited to the amount of transmission capacity that they are able to build out as a function of this initial RFP, again, no additional value will be awarded for any and all incremental capacity

Moving on to the second bullet on this slide, the Commission also recognizes, of course, that there are benefits to the scaled economy of share transmission solutions These are noted explicitly in the Order, but most notably there are potential economies of scale with the phasing and the shared infrastructure that can be developed through proximately located wind energy areas And so the Order recognizes that while this will not be explicitly considered for Phase 1, it does note the timing urgency of these shared systems given their complexity and notes that NYSERDA and DPS staff should take immediate steps to study a potential backbone or share transmission system for Phase 2 and beyond So therefore, DPS staff and NYSERDA will convene a technical conference no later than September 28th of this year, and the intention of that technical conference is again to study those optimal configurations, as well as the ownership strategy for development of such transmission systems for Phase 2 and beyond Moving on to the next slide, the RFI explicitly has a number of questions on interconnection and deliverability, I've pulled out five of those questions at a high level here on this slide

So first and foremost, NYSERDA is seeking to understand what transmission agreements or arrangements are needed to deliver energy from outside of the New York Control Area Secondly, we'd like to understand what risks are associated with delivery of energy from outside of that control area Third, we want to understand on the capacity side what specific transmission arrangements may be required incremental to those arrangements that are required for the delivery of energy NYSERDA would also like to understand or to take a poll on what level of detail should be required from bidders in determining or in justifying the reasonableness of their transition cost estimates So NYSERDA recognizes, as does the Commission, that the cost of transmission can be a significant uncertainty in the overall cost of an offshore wind project, especially in the early phases of its development, and therefore NYSERDA seeks to evaluate the reasonableness of such transmission structures in its bid evaluation process

So therefore, NYSERDA is looking to understand where it can request for the transparency of some bids, whether that be through the understanding of system upgrade costs, the cost of onshore and offshore substations, array cabling, export cabling, what-have-you And lastly, the fifth question noted here, notes that the presence of a partnership between a project developer and a transmission developer, as I said before, that could impact NYSERDA's evaluation of the overall project viability, so we'd like to understand exactly how that should be considered in our evaluation process We'll now move on to OREC pricing options under the Index OREC structure So as Doreen noted in the previous section, we are pursuing a hybrid procurement approach, and those two structures being first, the Index OREC and then second, the Fixed OREC I'll cover those two back-to-back

So first with the Index OREC, we'll explain the mechanism here on this slide and then the following slide, discuss the questions that we're posing through our RFI process And so in the Order, the Index OREC is defined as an adjustable OREC that the prices of which net periodically against a reference price that is expressed in a market index Now the Order does again specifically call out that that contract price will vary monthly, so that means that the indices that are used are settled on a monthly basis The monthly OREC price is calculated using reference prices in both the energy and capacity markets, and the Index OREC strike price which you can see in the formula at the bottom of this page is on the far left side of that formula, this is equivalent to the actual bid price from the bidder in the RFP But this is going to be the starting point for determining each of the monthly OREC prices throughout the contract life

So what that means is that your bid price, or the Index OREC strike price as it's called here, is offset on a monthly basis with a dynamic calculation of, or aggregation I should say, of two market indices, the first of which being a reference energy price in the second being a reference to capacity price The details of those two indices are included in the Order, and I'll discuss that on the next slide But the fourth bullet here again notes that because this is an index structure, this is looking backwards, if you will, so therefore there will be a settlement period at the end of each monthly period, there will be a settlement time during which the monthly OREC price will be determined and then aggregated for payment to the project developer Proceeding to the next slide, so these two bullets here, just note the definitions that were included in the Order in both defining the reference energy price as well as the reference capacity price The reference energy price was denoted to be a time-weighted average of hourly, day- ahead market price indices and the load weighted average of those prices in NYISO's Zones J&K

That's a lot of technical language embedded in that sentence, but effectively what this means is that based on the load balance between Zones J and K, those prices between those two zones will be averaged according to the actual time weighted generation profile of a specific project Moving on to reference capacity price, this will be a megawatt hour equivalent, or a dollar per megawatt hour equivalent price, based on the zonal load weighted average monthly spot market, UCAP as it known as, Unforced Capacity Prices, in NYISO Zones G, H, I, J, and K And so for those who are able to reference the Order, I'll note that these definitions were included explicitly in Appendices B and C of that Order Moving on the next slide, as it pertains to the Index OREC structure, in the RFI, there's a number of specific questions, the first of which is asking whether the bid prices should be limited to fixed prices over the contract life, or whether NYSERDA should allow for variable price structures and schedules What this means is, NYSERDA is asking whether the OREC strike price can perhaps escalate over the life of the contract, or whether there can be an annual variable schedule included as the bid price

Secondly, NYSERDA is seeking to understand, or to seek feedback on, how negative LBMPs or locational based marginal prices should be considered in our contracting And third, we would like to understand as it pertains to the reference capacity price, how we should, or which UCAP factor NYSERDA should use in the determination of dollar per megawatt-hour equivalent price The NYISO has published an initial proxy for offshore wind That UCAP factor is 38% for both summer and winter seasons, but as it pertains to existing generation in the New York Control Area, that UCAP factor is adjusted based on actual performance over the operational life of the asset So again, NYSERDA is explicitly seeking feedback here as to whether that UCAP factor should be fixed throughout the contract life or whether it should be based on actual performance

Moving to the next section, we'll discuss the Fixed OREC structure As Doreen noted earlier, the Fixed OREC is effectively identical to the approach that is adopted by the Commission for Tier 1 of the Renewable Energy Standard, or the RES, and so this structure does not include a hedge for energy capacity like we saw for the Index OREC structure So again, this option is effectively, or will be established on the same terms as is currently use under the CES solicitations So the questions that we pose in the RFI for this structure are similar, or actually word for word consistent with two of the questions that we asked for the Index OREC structure, and those being whether NYSERDA should allow for dynamic price schedules as part of the bid submissions, as well as how negative LBMPs should be handled, so the RFI does explicitly ask these questions as it pertains to each of the individual procurement structures, noting that there could be different treatment under each of those options I will now move into the bid price evaluation

And for this, I will refer those on the webinar as well as those in the room to reference Appendix B which does include an illustrative example of how the bid price evaluation will work in the context of this hybrid procurement And so as the Order notes, NYSERDA will be required to solicit two separate bids from each bidder, one for the Fixed OREC and the other for the Index OREC Both of these prices will be considered in the award of the 70 point criteria as was laid out in the Order, and so these raw bid prices will be weighted using a formula that is articulated in the RFP, and again, that price component will drive the overall bid score of 70% of the overall bid evaluation The RFP will also include a maximum acceptable bid price above which point any and all bids would be automatically rejected, and this is again consistent with the current practice under the RES NYSERDA will also retain the right to reject all bids taking into account not only the maximum total bid price but also other recent auction and market conditions

So moving on to the questions that are posed in the RFI about the bid price evaluation, first, we note that , or we ask, what weighting factors should be selected, and why? Again, the Order allows for significant flexibility in this regard to NYSERDA as the procuring entity, but the weighting factors and calculations that are included in the Appendix B are meant to be illustrative only Secondly, we seek to more fully understand what price evaluation lessons can be learned from procurements in other jurisdictions That could be from those here in the United States as well as those international procurements Third, we'd like to seek industry feedback on exactly how the maximum acceptable bid price should be determined I'll note that there is, the maximum acceptable price will be applicable to both the Fixed OREC structure as well as the Index OREC structure, and so there's certainly delicacy NYSERDA will take in determining that maximum acceptable bid price to ensure that it can be equally applicable to both of those structures

Fourth, the Index OREC bid prices will have to be adjusted for values for energy and capacity in order to be compared directly to the Fixed OREC bids, so what this means is that NYSERDA will construct a long term reference case which will be utilized to evaluate the cost of the Index OREC bid over the life of the contract, and this does not need to be done for the Fixed OREC because that structure is a fixed price over the life of the contract and we can understand and quantify those those prices, but as is intrinsic in the structure of the Index OREC, these prices are dynamic over time, therefore we need to understand or take the view on where those prices will land in the long term in order to be directly comparable to the Fixed OREC structure And then the last question noted here is asking what other provisions could or should be included in the RFP to allow for more competitive pricing We believe that the Commission has gone to great lengths in its Order to ensure a competitive process that accommodates not only multiple lease areas in the region but is also flexible, and not only as procurement mechanisms, but as well as other eligibility requirements, again to ensure that this process benefits from those costs through true competition So therefore, that that wraps up the bid price evaluation section, and so we'll now open up the floor again to questions, it looks like we have a few that have come through the webinar, but if folks want to again please utilize the platform that we have here to take questions in person as well While Matt's reading a couple questions that have come in via the webinar, there was one holdover question that came in on the last topic that I'll cover first which has to do with really the fact that a large portion of costs for prospective bidders will be in foreign currency, so a firm bid will require hedging in that regard, and how will the RFP consider this in terms of the validity and lead time to an award

And that's a very good question, and that's really baked in, I would say it's baked into our questions regarding the procurement schedule, which is to say how long would and should these bids be seen as firm and binding, as we do recognize there's many dynamic situations at play, including you know the point this questioner has made with regard to the foreign currency that's utilized with regard to the cost So when one is considering the response, hopefully this can help color your thinking and inform it I'll it back to Matt, but it does look like we have a couple in person so why don't we start there Hi this is Deniz Ozkan from Atlantic Wind Connection, a question about transmission Will you value the projects the same if they're connected directly to the New York Control Area versus other states' offshore area, and another follow up, are you going to require, even though the first phase transmission lines built by the wind developers, and standardize a kilovolt (kV) for capacity or voltage levels, and then require the first phase lines to be connected to an offshore transmission network or backbone system in the future, are you thinking about that? And a third one actually, if you award more than 800 or 1,000 or 1,200 MW capacity did you look at how it will impact future transmission design? The award, the first project, high capacity radial lines, how it will impact transmission design later on, thank you

Sure, so I want to ensure that I address all of your questions here, first and foremost And so we don't expect that, sorry, I'll say that the evaluation process will treat those systems that interact directly into the New York Control Area and those that interconnect indirectly or through a land-based transmission agreement the same apart from the project viability considerations And so what that Order includes explicitly in its language is that NYSERDA has the right to score project viability in light of any and all incremental risk that it sees from those types of contractsSo this does not mean that NYSERDA will score those projects worse or better, it just notes that NYSERDA has flexibility to do so, so therefore we have included a specific question very similar to the one that you just posed actually in the RFI, this is looking for the opinions of those experts in the room to advise NYSERDA as to how it should handle that authority that it has been given To address your second question, we do not expect that there will be requirements or incremental consideration given to Phase 1 bids regarding their ability to interconnect incrementally to Phase 2 backbone systems

We respect that Phase 1 systems may be designed so that future projects can leverage or benefit from that Phase 1 system, but again that would not be given additional weighting our evaluation process for Phase 1 And I'm sorry, I'm forgetting your third question, if there's something I haven't answered– if you award 1,000 or 1,200 MW, how will that impact future transmission design if you have a couple of radial lines? Sure, I think that, first of all, that is a great question and it is addressed, or, sorry, the question was if 800 or 1,200 MW is awarded in Phase 1, how will Phase 2 transmission kind of work around those large injections for Phase 1? This is expected to be a point of primary consideration for the the transmission working group that is being assembled and is ordered to take place prior to September 28th of this year, and so certainly some of the points that will be addressed in that working group are not only, I believe that the Order explicitly called out what type of shared structures should be considered, both from a physical design perspective as well as an ownership perspective, but we will also need to consider the implications of those Phase 1 injections and how Phase 2 will have to adjust for, or perhaps take advantage of those Phase 1 systems Any other questions in the room? I have a question on the interconnection process, I'm Howard Kosel, Anbaric, with regard to the interconnection process and New York, it's a fairly rigorous process that takes some time which the costs are not determined until much further on in the process– facility stage, Class Year, who accepts their allocation and doesn't accept their allocation, and ultimately when you sign your interconnection service agreement, so with 70% of the evaluation criteria on price, how do you plan when you won't know what the system deliverability upgrades or system upgrade facilities, what those costs are until well after the RFP has been awarded, can you just comment on how you think about handling that? Sure, I think first of all, I'll note that developers have been thinking about this for a long time as well, and so we certainly expect that some developers are a ways into that interconnection process and have perhaps significant understanding of where their interconnection cost will lie, but as we noted in our RFI questions, you know we do understand that there is some uncertainty in these prices, and so therefore we're seeking to understand if we want to be able to assess the reasonableness of those interconnection costs as we evaluate those prices, and so therefore, again, we include that question explicitly in the RFI, but I think NYSERDA as well as the Commission certainly understand that these prices can be incrementally uncertain relative to the other costs required for offshore wind on the generation side, but all consideration of that uncertainty or pricing of that uncertainty is really in the hands of the developers as they prepare their bids Maybe I'll just add one thing, and I think we'll talk about this a bit when Allison presents, and that is, when we think about project viability, one criteria within that category really has to do with the interaction status of the facility On the land-based side, we have minimum thresholds that these projects need to have hit in order to even participate in the RFP, and in the RFI we're asking a similar question and that is, what would be a minimum threshold for an offshore wind project, and further, what incremental progress would a project have to make in order to be considered more viable than another by virtue of the fact that they have removed some of those uncertainties around their bids, but those are very good questions and thank you for asking

I will ask any questioners in the room to try to get really close to the mic when you ask as it seems that the webinar attendees are having difficulty hearing you, please Thank you for organizing this I have a two-part question regarding OREC, one is, under this current solicitation, will energy storage be considered as part of any developers proposal, and if so, how will that be evaluated, in other words, levelized cost of energy has one price and levelized cost of storage, will there be a breakout or some kind of an inclusive price, what is the basis for that, and the second thing is, I understand that in lieu of a long-term PPA [inaudible] and in such a case, some developers may utilize project financing to undertake these projects [inaudible] [inaudible] so in such a case, will there be considerations in the evaluation, for example payment security mechanisms and payment plans, for example where lenders might have certain covenants to be met for debt service coverage and mitigating downside risks, so I certainly appreciate you elaborating if possible, thank you, appreciate this opportunity Thank you for the questions First, I'll note that the Phase 1 RFPs will not include incremental consideration or points for energy storage systems, however, that does not again inhibit or discourage developers from pursuing energy storage on their own So both of these procurement models, whether that be the Fixed OREC or the Index OREC, do provide sufficient upside, or opportunity, for developers to maximize their wholesale revenues through optimising of energy storage systems, so that option is certainly on the table

Secondly, we do recognize that many developers could and will pursue projects finance type structures, this is not new for New York State procurements or NYSERDA procurements, and so I don't want to speak to the exact legal provisions but may turn to Pete in case he wants to address these, but certainly we expect that any contracts awarded by NYSERDA would accommodate those types of standard market provisions around ensuring debt service requirements and other provisions that that language can require And frankly, I'm not certain that I understand exactly what kind of debt service provisions you're talking about, we could talk about it now, I would ask if you put in written comments, if you don't mind, specifically ask these questions and give examples, you know, 30 page limit, so use all of it if you want, but that's the kind of thing I'm hoping we can learn from this type of meeting, really make a difference in the agreement Thanks If there are no other questions in person, I'll take one from the webinar and then we will pass on and move to the next section So the question via the webinar is, for the first phase, would the developer be responsible for both wet and dry transmission infrastructure? The short answer is yes, the developer is required for whatever transmission infrastructure is required to meet the eligibility requirements included in the RFP, so therefore, as stated in the Order, all projects are required to have firm energy delivery rights into the New York Control Area, so therefore any transmission infrastructure required to meet that condition would be borne by the project developer

I believe that concludes this question and answer section, there will be more throughout the afternoon, but at this point, I will turn it over to Allison Rose to discuss economic benefits Great, thanks Matt So on the topic economic benefits, similar to the Renewable Energy Standard, the Offshore Wind Energy Standards recognizes the economic benefits that can flow to New York State from project development in the region, and as such, the Commission has apportioned 20% of the available points for this category Unique, however, to the State's industry, are the near-term opportunities that can both flow from infrastructural and supply chain investments, as well as the enduring benefits that can result from these types of investments, specifically, the broader impact to New York State that can result from supportive infrastructural and supply chain investment, and projects that can serve — supply chain investment projects that can serve future project development, and further reduce the cost of future offshore wind in New York So to that end, the Order acknowledges that the State's geographic advantage is in the ability to serve as a hub for offshore wind development regionally, and so the RFI asks questions the tend to follow these themes

So the current thinking around the development of the RFP includes the idea of submitting an economic benefits plan as part of a proposal, and so the first question that the RFI is seeking to get your feedback on relates to this economic benefits plan So number one, what information should be required in an economic benefits plan to support the scoring of supply chain and supportive infrastructure investment, opportunities for New York State businesses to bid on project expenditures, and enabling investments in activities such as workforce development, research and development, or other categories? The Order also identifies opportunity for economic development, workforce development, and purchases of local products and services, among other things So the broad question is, how do we bring these types of opportunities to New York State? And we would pose to you, how do we ensure opportunities for New York workers and New York businesses in particular to, participate in offshore wind development? We want to ensure the maximum potential for high quality employment opportunities in New York We want to ensure that we can provide the properly trained, highly skilled, and qualified workforce that is needed to support the development of the industry throughout the duration of the projects that will come to the region, and we'd like to ensure that there are opportunities for New York State small businesses to participate in offshore wind development in the region The next question touches on local content specifically, and this may include creating opportunities for New York State business

So the Order states that NYSERDA is expected to include a local content provision in the evaluation criteria, however the exact form and weighting of local content and the extent to which it affects the evaluation bids is for NYSERDA to determine So we're asking in the RFI questions with respect to local content around how we can communicate opportunities to small business, how we can require proposers to provide opportunities for New York firms to bid on contracts When we think about that, we're questioning what categories of expenditures are reasonable to apply this type of a requirement to? What is the practicality of requiring opportunity for New York State businesses to bid on these projects, and what level of demonstration would be required for a proposer to prove that they have opened these opportunities for New York State businesses? Additionally, the Order, similar to the Renewable Energy Standard, the Offshore Wind Standard will require verification of economic benefit claims that are made in proposals, and failure to comply will have a penalty So with respect to the financial penalties, NYSERDA is considering a number of different mechanisms to address shortfall and economic benefit claims The first would be as we do in the Large-Scale Renewables program, a mechanism that would reduce contract price in proportion to the shortfall

The second might look like, or might require a seller to make additional investments to make up that shortfall, and the third option might require a seller to submit payment in proportion to its shortfall, so fund related activities that would ultimately yield the objective, which is bringing the economic benefit and the economic development to the State of New York We're seeking input on these three potential penalty provisions, and want to hear from you if there's any other suggested ways that you might suggest we consider verification of economic benefits With respect to the types of economic benefits that are discussed in the Order, there are some things that are unique So we have direct expenditures, but we also have investment in enabling supply chain infrastructure, commitments to offshore wind industry and supply chain stimulating activities NYSERDA is directed to weight these expenditures differently, but particularly, the Commission has directed us to pay attention to expenditures and investments that create real, persistent, and sustainable institutional labor capabilities in the State, and further, those investments that could lower the cost of future offshore wind projects

To that end, the RFI is asking, what documentation will be required to do this? So we need you to tell us what documents will demonstrate real and verifiable investment in these different category types? Second, how should NYSERDA evaluate whether investment is likely to lower the cost of future offshore wind projects? Again, we're seeking your feedback on those areas The next question that is on the weighting of real economic benefits or relative economic benefits categories And the Order states that weight should be given to those activities, expenditures, and investments that can create persistent and sustainable institutional or labor capabilities in New York State, and that lower the cost of future offshore wind projects So, criteria may include other direct benefits to New York economic interests as well So NYSERDA is asking, how should we give greater weight to those different categories of expenditures? What information might be reasonable to use as the basis for assigning additional weight to those types of categories? And how much additional weight is appropriate to assign to expenditures or investments that create these distinct types of benefits to the State? Lastly, in regards to economic benefits, the Order calls out one specific type of investment with respect to fishing mitigation and compensation

And the question is, how these be quantified and considered in the RFP? This is an area of interest to many stakeholders here, and we're looking to the development community to help us better understand how we should consider appropriate mitigation and compensation, and weight it accordingly in the economic benefits section of the RFP With that, I'm going to turn briefly to project viability and then we'll pause and take some questions which I'm sure we will have First, similar to the Renewable Energy Standard, project viability will be weighted in the Offshore Wind Standard with 10% of the available percentage of points Viability is of particular importance as Doreen noted earlier given the imminent expiration of the Investment Tax Credit For that reason, viability represents more than what it has historically been weighted at under the Renewable Energy Standard, going from five to ten percent for offshore wind, and attributes that should be considered in the evaluation of projects for project viability include: permitting plan and status, financing plan, developer experience, proposed technology, development and logistics plan, interconnection status, reasonableness of project milestones, community outreach, environmental impacts, and wind resource assessment

At this time, what we're asking for is broad: what information and documentation should be required of proposers to demonstrate viability? We want real projects that are happening now in New York, we want to ensure that these projects get built, and so how do we do that? What can we ask of any proposer to prove that their project will happen? So at this time, I'm going to open the floor for questions on economic benefits and project viability, and we'll see if anything came in over the webinar while folks in the room queue up Thanks Allison, agai, please do come up if you have particular questions In the meantime, while Allison's just taking a look at the questions that have come in, there's one that I'm going to answer and one that I'll look to Matt to answer The first question had to do with how NYSERDA would determine and/or quantify a shortfall in whatever claims that have been made at the time of the bid? I will say that that is the topic within the RFI regarding a question that we would ask these bidders, and prospective bidders through the RFI, however, in the land-based renewables context where we do have a very similar category, albeit with a slightly different purpose in the sense that in the land-based category, we really are looking at direct impacts from the project and really not with this broader context of long-term investments that could benefit the State again in the longer term, however, on the land-based side, we do audit the spending of these awarded developers to verify through a third party audit the spending records that they are claiming to have executed on in their projects' development Should there be this shortfall, there's contractual ramifications that are again in question at this point in the offshore wind context as to how they would apply here

However, I would say that at least looking at the RFI would be a great place to provide some feedback should you have thoughts, but also looking at our current LSR RFP on the street, you would see how at least we considered that from a land-based perspective I think Matt or Allison, there's one topic Matt I thought would cover and the rest were probably Allison So another question received over webinar was, has any thought been given to creating a method for provider firms to learn firms in other disciplines in the interests of their projects? Absolutely, there was a technical working group devoted to Jobs and Supply Chain of offshore wind that was created as a byproduct of the Offshore Wind Master Plan This working group was referred to very extensively actually in the Order as well, but this technical working groups has three primary purposes: the first is the development of port infrastructure in New York State, the second is preparing New York's workforce for this imminent industry, and the third is creating a platform and publicly available resources to encourage the dialogue and partnerships that are going to be vital for the development of a local supply chain, and so I think that that last piece really get to the heart of what this question is intending, which is, how can local companies in New York capitalize on the offshore wind opportunity and learn from those who perhaps are more experienced or have diverse exposure to other disciplines, and so this working group is providing that type of platform, and we expect long term that, or I'll say that the long term is becoming short term as we move quickly, more quickly and quickly as we go, but the State will also be arranging and is continuing to arrange supply chain forums where local companies have the opportunities to engage with not only the development community, but also international manufacturers and maintenance providers, so to the extent that there are questions about that particular working group, we'd be happy to take those through the contact methodology that will be included at the conclusion of this presentation Great, we'll go ahead and start with questions in the room

Thank you, hi, Nora Madonick, Arch Street Communications, and thank you very much for today I have two questions for you One is, I appreciate that NYSERDA and the Commission have identified work for small businesses in the RFI and in the outreach, what I didn't see was anything specific to minority women owned or service-disabled veteran-owned business, and I'm wondering if a percentage has been discussed, or if you would like some input on that in the RFI and if so, in what categories That's a good question, well to my knowledge we have not set, there is not a plan for a set percentage We look forward to the comment, it will get that topic into the discussion for sure, I think you can put it anywhere in the answer to any one of the questions that you'd like

I don't have a, you know, just leave it at that And the other question I have is, will you be sharing out the attendee list for this meeting and the webinar so they're potential partners? Our plan is not to release, and for no particular reason really other than just wasn't on our radar to release the attendees from today's webinar or from the in-person attendance, however, you know, one of the work products that Matt had described from the Jobs and Supply Chain Technical Working Group is to create this inventory that could be utilized for the purpose that you described which is to really help companies in various aspects of the supply chain connect with one another on areas of mutual interest, so I think actually that would be a better place for that connection to occur Thank you I'll add one incremental response to that question, in question 41 of the RFI does call for any topics or risks that NYSERDA should consider in drafting the RFP that were not explicitly noted in the first 40 questions, so we've done our best to kind of hit all the touch points for the most sensitive areas of the RFP, but to the extent there are some that are adjacent to those questions, responders are encouraged to utilize that question to capture those concerns All right, we have a few questions from the webinar

The first is, how would NYSERDA determine or quantify shortfall? I think, well this is an RFI question, I just answered that, sorry, I was reading the other question In the land-based renewables program, we audit using a third-party auditor so we would again consider options here proposed in your response The next question we received was, will New York State ports, workers, and manufacturing be used for Phase 1 projects? We certainly hope so To the extent that New York State ports, workers, or manufacturing is used to support the development of projects in the near term that proposed under the solicitation, they will be awarded points under the economic benefits portion of the RFP We have a number of questions on ports, so the next one is, has NYSERDA given any consideration to the somewhat unique characteristics of port facilities that are required to support the cost effective and time efficient execution of installation operations for commercial scale offshore wind projects? The answer to that question is yes, we have been and continue to study ports around the State of New York to understand opportunities and limitations, and beyond that, if Matt would like to add anything else, you can do so

Sure, I'll note that in the Master Plan that was released in January of 2018, there was a comprehensive initial assessment of more than 64 facilities in areas across New York State looking at three geographic areas those being the Hudson River, New York Harbor, and Long Island NYSERDA is also actively engaged in executing a 2018 Ports Assessment that is seen as a natural extension of that Master Plan report, and this assessment will be made public at its completion which is expected during the fourth quarter or early first quarter of next year, and this assessment would take a fine-tooth comb at a smaller subset of those facilities to study some of those unique port characteristics that were addressed in that question Next question, regional port facilities are not adequate to support offshore wind development, especially for utility scale projects; will developers be required to upgrade or build new facilities, and if NYSERDA or others improve the facilities, will economic benefits be credited to the developer? At this point, investments made by developers to upgrade or build new facilities would be considered in the economic benefits evaluation for their proposal If NYSERDA or others improve the facility, there is currently no thinking that the points awarded under economic benefits would then be credited to the developer The goal is for developers to bring economic development opportunity to New York, not the other way around

Next question, given high capital requirements and short utilization for period port facilities that are suitable for offshore wind installation, is there any scope within NYSERDA's evaluation process to consider having such operations carried out from offshore wind ready ports in other states? Certainly, developers may use whatever port it is that they deem appropriate for the development of the project, however we would certainly be looking for those investments that will bring long-term benefits to supply chain development and infrastructural development within New York State for future offshore wind development in this area, and so if a developer chooses to use other port facilities, there is not an opportunity to capture some of those economic benefits point within the RFP, and we would encourage you to consider alternative options Joe Hartigan from Rockaway, Queens Gas pipeline, runs from New Jersey all the way up to Jones Beach They brought it in How is that going to affect the transmission line, can you go over it, can you go under it, also where the gas pipeline goes under the shipping channel, it has to be 40 feet under the ground you, when you bring the power line in where the shipping lanes are, you cross two of them, the power line has to be 40 feet under the ground or you can still lay it on the surface, what are the Coast Guard regulations as far as dropping that power line in the shipping? So I'm going to reserve this question I think for the next speaker since it's not directly addressing economic benefits, but my question is, the gas pipeline goes from Jersey to Jones Beach, and you really can't bring the power line anywhere in but east of Jones Beach, because I don't know if you can cross a high-voltage power line with a gas pipeline, that's my question

I think generally NYSERDA would note that the design of offshore transmission systems is left to project developers, so NYSERDA has the job of evaluating those systems based on the three valuation buckets that we've outlined today, but as far as interacting with some of the jurisdictions that you noted, be it the Coast Guard, other State and federal agencies that Greg will speak to, that is being led and designed by the project developers themselves I think to the extent that it impacts project viability, transmission designs will be considered Okay, while we wrap up this topic, I do want to mention a couple of questions that came in that really weren't related to any of the particular sections we were going to discuss today so I'll just bring those up right now and then we'll turn it to Greg Lampman to take the next section So these really have to do with the ESCO obligations that are inherent within the structure that the Commission has ordered So the question has to do with, if there's not an alternative compliance payment, what will happen if enough projects are not constructed and there are not enough ORECs available for each ESCO to purchase their requirement? So the way the Commission has adopted this requirement is actually more like the ZEC obligations that have been placed on, the zero emission credits obligations that have been placed on, the load serving entities or ESCOs here in New York State wherein the ESCOs are responsible for purchasing their pro rata share of however many ZECs NYSERDA purchases from the eligible nuclear generators

So in the instance that there was a circumstance, let's just say, where a project was delayed and it came online in July instead of May, and there were fewer ORECs to be had in a given year, it wouldn't impact the ESCO or the LSE in any way other than to just reduce the pro rata share of the ORECs that they would be obligated to purchase from NYSERDA So that's how it works, it's a perfect balancing really of the amount that NYSERDA buys and the pro rata amount that each LSE is required to purchase, and again, the Order does specify the fact that there is not an option for LSEs to enter into bilateral agreements with developers, and that is by virtue of the fact that again, the way this is designed is that NYSERDA is the procuring entity and that the ESCOs buy from NYSERDA So with regard to the perspective price per OREC that might be applied, I would say you could certainly look at our cost study which was appended to the Master Plan, there were a few tables around the expected potential premiums that would be borne by repairs through this program, however, I would say that every indication that we see is that these estimates were likely conservative in the sense that, since that time, what we've observed to be true is that the market has responded with the cost reductions that we seek more in the near term than perhaps even we would have had estimated in 2017 when the cost study was executed on So ultimately, the cost that the LSEs will pay will be the cost that NYSERDA pays, and that will be the most cost-effective bid that we can possibly achieve That's really the takeaway that I hope you can get from that flow of cash and our overall objective

So I think now we can turn it to Greg Lampman to discuss marine, environmental, and other impacts Thank you, Doreen So as many of you know, States have limited opportunity to intervene in siting projects in federal waters, and the New York State Offshore Wind Master Plan dedicated a lot of time and space to looking at how ocean users off the coast of New York use that space as well as how wildlife uses that space, and encourages BOEM to work within an area called the Area for Consideration to identify sites In regard to siting, the Master Plan has a supporting study on visualization that states that the State believes a 20-mile setback would eliminate or minimize visual impacts during daylight hours So that's a stipulation that we've included for BOEM to consider in identifying new sites off the coast of New York

The Order notes that minimizing visual impacts is a very strong concern and requires that, through our procurement process, that we consider siting, or that we consider visuals impacts, in our contract requirement It also gives NYSERDA the discretion in setting a setback or requirements around visualization, which means that NYSERDA could elect to have a direct setback, maybe using that outlined in the Offshore Wind Master Plan or an alternative, or it could use it as a consideration amongst others, including economics and environmental considerations And that is how the Order approaches visualization during daylight hours, but it goes on also to include the requirements of lighting controls to minimize nighttime visibility issues In the Offshore Wind Master Plan again, we talk about the use of aviation controlled lighting, so aircraft controlled lighting on the nacelle, with the objective of minimizing the amount of time that the lights are activated That study identified, using FAA data, notes that night lighting would be on less than a minute a day if it were activated based on aircraft in the area, so Order requires that lighting controls, not specifically that version, but lighting controls are included in the RFP

So the RFI asks, how should we approach visualization and distance from shore, visual issues and distance from shore? And we're looking for feedback on specifically those questions whether it should be a direct line, I know a lot of folks in this room provided comments on that in the Notice, but also if it is considered among these other topics, economics and environmental issues, how should it be considered and rated? So we're looking for feedback on that topic specifically in the RFI Similar to siting issues, states have very little opportunity to engage formally in the development process in State and federal waters The environmental permitting is mainly done on the federal side, there are few opportunities for the state to engage through its Coastal Zone Management Plans, but to a large degree, it's a federal process The Order reinforces the New York State Offshore Wind Master Plan in that it wants to consider environmental stakeholders in this process, both environmental groups as well as commercial and recreational fishers So first, the Order reinforces the values of the technical working groups that were called for in the Offshore Wind Master Plan

These technical working groups are in a variety of states of development, most are nearing formalization Matt talked a little about our Jobs and Workforce Development Technical Working Group We're also developing an Environmental Technical Working Group and a Commercial and Recreational Fishing Technical Working Group The Order reinforces that these technical working groups are valuable and useful for providing information of a technical nature to the State in informing its decision making, and it requires that bidders to the solicitation participate in those technical working groups To bring value to that participation, it also requires that the selected developer consult with the State when development gets approached to satisfy federal regulatory requirements around fishing, wildlife and other environmental issues

This basically gives New York state agencies, namely the New York State Department of Environmental Conservation, the Department of State, NYSERDA, New York State Parks, Recreation and Historic Preservation an opportunity to engage with selected developers in how they build and design their mitigations or their approaches to federal regulations So we're kind of first in the room in having those consultations with the developer, and in doing so, we're able to draw a direct line between the stakeholders in our technical working groups, the state consultations, and the developers to influence the process to be sure that it represents, to the extent possible, the interests of New York State and its stakeholders It also recognizes the value of transparency in environmental data So during the course of a site assessment and during construction and operation plans, developers will be collecting environmental information in a variety of ways This can include marine mammals, sea turtles, birds, metocean data, geotechnical data, and a whole range of things

What the Order requires is that the data that's collected, environmental data as it's termed, should be made available for public consideration during the course of collection So what we really want to do is make sure that environmental data is collected, it's provided out to the public, made publicly available so that the public can evaluate the environmental data in the context of the project, so rather than waiting for a site assessment plan or waiting for a construction operation Plan to see the environmental work that's taking place on those sites, that data becomes more transparent if it is made available more quickly, and so that third parties can review it and consider it in relation to the project The Order also encourages NYSERDA to request additional funding from the Department of Public Service to support environmental research So NYSERDA's Environmental Research program has been funding environmental research for more than 20 years, the objective of that is to collect environmental research– or conduct environmental research and collect environmental data, to support better energy and environmental decision making What the Order basically is saying is that NYSERDA should go back to the Public Service Commission and request additional funds to support more research

We'll be working on what that research should do, so what research needs to be undertaken to advance responsible and cost-effective development, but we're working on those questions with our technical working groups, so the technical working groups will be informing where the data gaps exist what data would bring the most values the overall process, and then we'll be using that to get more money and support that environmental research Finally, it also provides the option of incorporating best management practices and environmental criteria in the scoring calculations around Phase 2 So basically what it's saying is, if the Environmental and the Fishing Technical Working Groups can develop best management practices, these best management practices would be considered by DPS in its Order for Phase 2 So to the extent that we can come up with best management practices that makes sense, we will be working with the with the Commission to consider them in the next Order So in this regard, the RFI requests, what environmental data should be made available, and what data should be considered proprietary to the developer? So we recognize that some data provides a competitive advantage and doesn't need to be made public, doesn't bring that value, while other data does

So which data should we be requiring and which data should remain proprietary to the developer? Additionally, how much funding is needed to support environmental research? what's the State's role in environmental research in the State? The developers are going to be conducting research in order to inform their federal permit, and the federal agencies have been conducting research in this space, so what's the State's role, and what research would make the most sense to reduce risks and support responsible development? Additionally, it asks for best management practices So we're looking to develop best management practices both on the commercial and recreational fishing side, as well as on the environmental side Are there examples of best management practices that have worked well elsewhere in the US or in Europe? So are there examples that we could use to start this conversation around the development of best management practices? A bit more specifically to the commercial and recreational fishing groups, we've got our F-TWG, for all our technical working groups we use TWG short, the F-TWG is the commercial and recreational fishing group

The Order request that the F-TWG specifically develop best management practices for Phase 2 development, and also for consideration in consultations with the developers reflected through this procurement It also requires bidders to submit a fishing compensation plan which may also be used to include any best management practices So a fishing compensation plan is a bit open as to what should be included here, but we're looking for ways that the developers interested in working with the fisheries community to minimize their impact on that group And it requires that NYSERDA consider compensation programs that will be included in the fisheries mitigation plans in the evaluation process So I think in doing so, what the Order recognizes is that all sites don't necessarily require compensation plans, but some sites may require compensation plans at some stage in the development, and if that project is at a stage where they they've been working on a compensation plan, the State will consider that in its procurement

In that regard, the RFI asks, what information should be required in a fishing mitigation plan? What commitment should proposers provide regarding how they will work with commercial fishing to design, build, and operate sites? So in that regard, we're thinking about, at the stage of development in which the project is being bid, how far can they go in assuring commitments to commercial fishing? And finally, if a compensation program is included, how should it be thought of in the context of other things? So how should a proposer quantify the economic impacts, and how should a fishing compensation plan be considered among other economic impacts of the project? So thinking about economic development opportunities and mitigation in the same process And with that, I will turn it over for questions And so we had an earlier question ask, has NYSERDA considered including economic benefits plans actions by developers to minimize impacts of fisheries and the ports and businesses operating in those economies? That is specifically what's called for in the question around the mitigation plan, how should we be thinking about mitigation and fisheries, is it directly to a boat operator, or there are larger groups or a larger community involved in this? Thinking about truckers and everyone else in between, that's one of the questions in the fishery mitigation plan Fisheries mitigation as a part of economics benefits scoring criteria? So the order specifically requires that a compensation plan be considered in that part of the scoring, in the economic benefits, but doesn't stipulate how the mitigation plans should be considered We're looking for, if you could respond in your RFI around the mitigation plan on how those points should be considered in the procurement

In what way will you be considering ocean users? So ocean users come in a variety of forms, we've identified in the Master Plan 4 specific groups that we want to work with, so if the Workforce Development group that Matt was discussing earlier We also have a Maritime group that's being led by Department of State which deals with shipping and navigation We have the Commercial and Recreational Fisheries technical working group and then an Environmental technical working group These are what I would think of as the major ocean users, and we've been working with other groups in a variety of ways, including through our consultations with State agencies The Order talked about a Phase 1 and Phase 2, when does Phase 2 begin in regard to environmental best management practices? So environmental best management practices are, like the fishing best management practices, requested

So we're going to be working with these groups to try and develop them The fisheries and environmental technical working groups are going to be comprised of both stakeholders in those groups, as well as developers We're going to try to develop best management practices that are mutually agreeable to those groups So I would say we will begin working on Phase 2 immediately, and Phase 1 we'll be working on best management practices that will help form the consultations So the near-term approach is to use the technical working groups to inform our consultations with the developer, and that Phase 2 best management practices could be included in the procurement itself, or could additionally inform those consultations for the Phase 2 developers

When does NYSERDA anticipate BOEM identifying new lease areas to support Phase 2 for New York State? Not sure how this one ended up in my stack, but the expectation is that BOEM will identify new lease areas early in 2019, and we expect that they will have lease auctions held later in 2019 to be available for procurements in the near future Are there any questions from the floor? All right, well if you think of anything on this topic, please do jump in There are a couple of miscellaneous questions we haven't quite caught up on yet I think two were something Matt was going to cover, and then two I'll cover, and then we'll hand it to Pete to talk about eligibility and contract provisions The first question states, if a project connects to PJM or ISO-New England, will it need to show deliverability into Zones J and/or K, or just a connection to the NYCA, the New York Control Area

If just a connection to the New York Control Area, how does New York City benefit? As it's contemplated in the Order, deliverability would only be required into the New York Control Area, so not specifically into Zones J and K Given the nature of the load pocket in Zones J and K, I think they should recognize that New York City is a load taker, is a net importer of electricity, and so therefore energy injected into any zone within the New York Control Area will have benefits for the load that is delivered into New York City Just while we're talking about the overall benefits here, I know this question is specifically related to the benefits and the wholesale electricity market, but the other benefits associated with offshore wind, those being jobs and supply chain related, are obviously independent of exactly where any energy is transferred to the Control Area A second question is, what would it take to have staging or fabrication port areas available by 2023, and how can developers and the Atate work in collaboration to ensure that that happens? So absolutely, staging and fabrication areas may and can be available by 2023, and we are working directly with the development community, as well as operators in the port logistics industry, to ensure that we have a comprehensive understanding of the requirements of these facilities So this goes back to these 2018 Ports Assessment that I noted just a few minutes ago where NYSERDA is not only leading and conducting that assessment, but we are also utilizing the Technical Working Group, specifically the Jobs and Supply Chain technical working group, to help us shape this report to ensure that it is of maximum use not only to the State but the industry itself, and to meet this question posed here which is, again, ensuring that these facilities are available for Phase 1 projects

There had been one question about the timing of a projects ability to come online earlier than later, how we would think about that That's a good question, certainly if a project was more advanced, it would score better marks most likely in the viability category, but further, really, this would be a question around how NYSERDA would look at perspective discount rates as well in its evaluation, and how its metrics would ultimately be built, if you will, around evaluation and look to the future I will note that there's a question in the RFI that relates to really general evaluation methods, I'd say this could be an interesting topic to weigh in on, I think it is Question 35 as it relates to how NYSERDA might be thinking about bids with projects of different points of commercial operation Greg, we had another environmental question come in So the question is, why is fisheries mitigation considered a benefit? I think it's important to note through our Offshore Wind Master Plan, as well as with this Order, it's pretty clear that we've taken the approach of trying to, first, achieve our goals of development of 2,400 MW of offshore wind by 2030

There's a lot of environmental advantages to that that are worth considering, but also that we're taking an approach where we want to first try to avoid areas of greatest impact and then try to minimize the impacts around those areas, and then mitigate those issues And so we're trying to work with developers and the regulatory community in both avoiding and then minimizing and mitigating those impacts So I think we've followed that all the way through, and we've also been trying to engage with the stakeholder groups to help inform that process, so it's not happening in a vacuum, we're trying to do that in consultation with both the regulators and developers and these stakeholder groups Finally it says, it's a two-part question, also, what kind of compensation will occur to land-based fishing jobs? And I think I referred to that in my presentation, in the fisheries compensation plans, we don't stipulate what should be included, but land-based jobs could be included in a fishing compensation plan So we're asking specifically in the RFI, how should a proposer quantify the economic impacts, and how should a fishing compensation plan be considered along with other economics considerations? And so we're looking to both think about how do these jobs ripple out, or how do these activities ripple out across the jobs, and then how should we be thinking about this in our procurement? Thanks Greg, and again, please do weigh in with any remaining questions you may have on these topics as we proceed with the last section of our presentation which is with Peter Keane around eligibility generally and contract provisions, Pete

Thanks Doreen So the Order limits the eligibility of projects in a few ways It has to be located in the United States waters, it has to be new, in other words, it has to go to operation after January 1, 2015 which is the Renewable Energy Standard requirement There's an energy delivery requirement into New York, either direct or through an adjacent control area, and they have to have a lease from BOEM But at the same time, the Order gives NYSERDA discretion to add additional eligibility requirements in any solicitation that we might issue

So first question is, if you folks have any suggestions on additional eligibility requirements that we should include in the 2018 RFP, if you have some suggestions, we'd like you explain to us what the advantages are If you disagree, tell us what the disadvantages are Next rule, when we do the on-shore projects we have what we'll call an outside commercial operation date In other words, when we sign the contract, you agree to build the project such that you are starting to generate electricity into the system by a certain date in the future The way we do that is by sort of, we have here the time that you can extend, but there's an outside date by which you have to build the project

The Order doesn't give us a lot of guidance on that, I think it refers to the concept but it doesn't provide any rules, at least not to NYSERDAs discretion, so we have a few questions that we want to ask about that The first is, how should the contract, well first of all, what factors should be considered in setting that latest, that outside commercial operation date, understanding that offshore wind is a new type of project here in the United States, but we have to have an outside date by which the project has to be complete, what should be we thinking about when we set that date? Next, if a developer misses the contract date, what should be the ramifications? When we issue this RFP, we're going to issue a contract with it We're hoping to issue both in draft form, but eventually we'll issue the RFP with a contract that is basically the bidding document in a sense, that's the contract you're bidding on It has to address a number of areas [inaudible] and some more we're going to talk about a minute, but the contract signs hopefully next spring How should it address a delay, or a failure by a developer to build the project within the commercial operation period? There are a number of ways that that can be done or has been done in other forums and other types of agreements, liquidated damages for instance, is a set amount of money and penalty that's charged to the developer from missing a deadline

It is not unforseeable that there are going to be delays in getting a project built, particularly in this nascent portion of the development of the industry, so we're asking for your advice on what sort of factors we should consider in judging the reasonableness of some delay in project progress coming from whatever reasons The final question here is, if the selected project isn't completed by the contractual COD, what kinds of financials penalty should we enforce against the developer? So I think the previous question is about delays, this last question is about just a failure to build or a failure of the project generally Next topic, the Order allows NYSERDA to fix the contract terms for between 20 and 25 years So we have a few questions about this, should we require every bidder to submit for a contract term, a uniform contract term, so we would require everyone to submit a contract bid for 25 years Now we may offer alternative bids as well, but should we ask each bidder to submit a bid in this uniform term, could be 20 years could be 25 years, could be anywhere in between, but I think that's the question

All right, the next question is about the economic benefits, and Allison touched on this quite a bit For my questions, how do we enforce the pledges, let's call them, in the agreement? We talked all about today how we want to foster price-effective bids that bring us these other benefits that we see as available New York, economic benefits being one of the large ones So we're trying to protect, Doreen talked a little bit about creditworthiness, we want a financeable contract for the developer to take, so we don't want to step on toes that we can avoid another way, in other words, we don't want to create financing problems or increase financing costs for a developer, so I wonder whether we could have some opinions, you could be very helpful to us at this point, in how we should design those enforcement mechanisms For instance, if a developer does not demonstrate or make the investment spend that they pledged to within whatever time period that was, we have to have an enforcement mechanism because otherwise, you're getting points in the competitive selection process because of that pledge A couple of them are mentioned in the papers here, one is and we do some of this in the on-shore wind variety, we could reduce your OREC price, we could require you to make those investments within some period of time, we could require you to make payments into a NYSERDA fund that could be managed in a number of different ways, but that would go at whatever that investment was originally place for, for instance, it was infrastructure development, workforce development, that sort of thing

Where NYSERDA would make that money available somehow to be invested in that same category, my guess is that depending on which one of those, we could do any combination of those as well, that it might someday have more of a negative impact on the financeability of an agreement, for instance, the reduction of the contract price, seems to me might be the most harsh, but I don't develop projects you guys do so, we're hoping that you guys can help us think this through Finally, as mentioned earlier, we're going to take these dual bids, the Fixed price and the Index OREC, the contract has to include with the Order calls a reversion mechanism where, if the original contract is an Index it gets switched to the Fixed bid upon some event So what we're asking is, how should we include that in the contract? This specific question, first, is what sort of an event would trigger that reversion? Second question is, whether we should limit the time during which that reversion could be triggered? So I think that's it on my slides, let me just say on the reversion, we don't, I'm sorry, one more slide The Order recognizes all the benefits of this program to New York The Order also recognizes that if building our projects to proceed on time and on budget to coordinate multiple groups of contractors together, Doreen had mentioned earlier in the talk here, we're authorized to require or encourage project labor agreements and a payment of prevailing wage, that's one way that other projects have incorporated and employed in order to ensure that these multi trade groups work together, that they go into the project with understandings about how disputes are going to be resolved, about what sort of specific activities are going to be handled by what trade groups, etc

So it is a new area, I think someone earlier said we're the first state to require these sort of labor provisions, so any advice you have about how to do this, really the goals are to keep it on time, on budget Again, we have lots of reasons why we need this happen quickly [inaudible] so we have an interest in that I think we're hoping that that can moderate a bit as well, because those risks can be taken off the table if people agree in advance I think that is, I think I got all my slides I'll stay on the reversion, there'd be a trigger, I don't think NYSERDA expects to have discretion to just order that trigger on its own for whatever reason, my thought is is that some sort of event that happens that would trigger the reversion to the Fixed price

I did have one question that came along the way asking whether NYPA would have similar discretion to develop a NYPA RFP and contracts as NYSERDA has, for example, a 20-mile setback, consideration of environmental impacts, 20 to 25-year contract term I'd say yes they would, I think that the Order sets forth the conditions under which a project will generate an OREC I don't think they have discretion to go beyond that, but at the same time practically, I don't know that they have the opportunity to because it has to be a project that's new, built since 2015, I don't think there are any built prior to that that they could do business with That is, deliver energy into New York, when we measure the amount of energy in New York that's from renewable sources, you don't measure just ORECs, you have to measure the energy in New York State, so I don't think they go outside of that requirement Those are more eligibility requirements than contract terms, I think they have quite a bit of flexibility to craft their contracts as they see fit

Another question is, prevailing wage and/or PLAs, it's a project labor agreement, there was a question mark next to acronym, requirements of the Order? At this point, no, they're not, but NYSERDA has been given the authority employ those as we determine that it makes sense overall for the projects success One more, what is the process for choosing a proposal for a award? So we touched on this, there's a 70/20/10 rating system The 70 points is based on your price, that's pretty much mathematical, there's a formula that determines how many of the 70 points you're going to get based on what price you bid There's project viability, and there's economic benefits on which we convene a panel of experts, and they are experts, we have an RFI out now I think to renew the panel that we've already assembled of people who have been in the field of renewable energy for many years in various different forms with different skill sets etc, but we form a team of people who advise us as to the real weight, the real benefit, the credibility of one proposal versus the next, and they spend weeks in total evaluating each one of the proposals that we get according to instructions that we give them

That's largely what you'll see the RFP about what we value We'll be asking questions today about, how should we look at a project and give it points because it's persistent? We really are looking for advice on how to do that because those instructions will go to the members of the scoring panel or to help us eventually write the proposals, so the 70 points is pretty cut and dry There are the non- price points which are more difficult to, we don't feed energy into a spreadsheet and have it spit out an answer, there's much more nuance and evaluation process on which we benefit from the knowledge and the expertise and experience of a whole panel full of people who have been doing this for a long time The award will finally get a preliminary rank, we'll look at a projects overall value to New York State at that point, and we'll arrive with it could be one award it could be more than one award All the factors that we have been talking about about what's the transmission arrangement, viability, and economic benefits being considered at the same time to find out the final award winner, but that's the process basically

Thank You Pete, I think we'd have an in-person question, please Good afternoon, I'm Adam Harkin, I represent dockbuilders, piledrivers, [inaudible] Question about prevailing wage, this project could possibly not fall under prevailing wage? I think NYSERDA has an opinion although I think the General Counsel of NYSERDA, a guy named Noah Shaw, he may be on, so I have a couple thoughtd but I thought you might have a couple as well Sure, can you just repeat the question so I can hear it clearly? Earlier it was stated that NYSERDA would have the ability to attach for prevailing wage and/or PLA for this project, and I was just curious to know if prevailing wage could possibly not be attached to this project? Well, the question I think begs an analysis with respect to whether these projects are public works under New York State Department of Labor statute The answer to that question I believe is that they would not be, NYSERDA is not the developer of the projects, this is not a construction contract that NYSERDA would be entering into NYSERDA is providing renewable energy payment for renewable energy credits in the same way it does with its onshore developments

To the extent that other municipal entities or State entities may be involved with construction projects that are associated with the overall sort of arrangement and sort of series of projects that are going to be required to support the development of offshore wind projects, that I wouldn't be able to talk through those because they're all sort of hypothetical projects, but for purposes of this financing agreement, which is only part of the stack of the financing of a project, our analysis is that these are not public works, however, as a matter of policy, and as a matter of discretion, the the Public Service Commission has noted that we are authorized to include these sorts of requirements or scoring metrics in our in our RFP and in our contracts Thank you Thanks Noah Yes, thank you I don't see that anyone in the room has questions on the topic of eligibility or contract provisions, and I also don't believe anything has come in on the webinar, so I'll just open it up to any questions of any sort, see if you can stump us, any questions you may have, we're happy to answer them

We'll just wait one minute and then we'll wrap up Hi, it's Howard Kosel again from Anbaric Question on ORECs and the Index based The current proceedings for NYISO carbon pricing, is that considered to be part of the index? Even though I know it's not finalized yet, but it certainly won't impact Fixed ORECs obviously, but the Index ones it certainly could have a an impact It could, so thank you for the question

For anyone who may have not been able to hear that question, the question was how any NYISO consideration of carbon pricing would impact the Index OREC structure specifically And through the formulation of those indices, that are again referenced in Appendix B of the Order, those indicies are based in actual wholesale market values of both energy and capacity, and therefore any inclusion of carbon pricing in the wholesale markets would be accommodated for or included in those indices, so therefore your Index OREC price would reflect such carbon pricing And so the Order notes that the benefit, if you will, of the Index OREC method is that it is dynamically accommodating of such a structure Thank you, hey Doreen, can I just jump in, this is Noah I think it's important to note in that regard, and picking up on Matt's point, that these indices are pegged to a generic project profile, not to the actual prices that a bidding project would clear, and we arrive at a number that would be an imprecise approximation of what the actual project would clear

So when you talk about the accommodation of a future carbon charge, it may not be exact but it would be approximate based on the methodology and the formula of the index Thanks, Noah, for that additional color I don't think there's any questions that have come in via the webinar, so we'll just wrap up and just discuss next steps very briefly Again, the RFI is available on our website I have provided the location earlier in the webinar, but it's prominent if you were to look NYSERDAs offshore wind page should you not have received our email on Friday

We are holding a RFI due date for your responses of 5 pm on August 10 You can submit those responses directly to our offshorewind@nyserdany

gov email address, and again, no need to answer all questions Focus on those areas that we hopefully have identified for you today where you have particular expertise and/or information that can help NYSERDA Lastly, again, please know that all responses will be made public We will post all responses on our website soon after the August 10th deadline, so please do not include in your responses any confidential or proprietary information that you would not want disclosed Lastly, again, we have recorded this webinar today and we will make it and the slides available on our website in the near future

We certainly do appreciate your attention and also the attention of the couple hundred people on the webinar which is really indicative, I think, of the reality that we are now in New York State in launching the active procurement of this phase of offshore wind, which, as President Barton indicated, is really launching the reality that we all have been working for years to drr come forward So we do appreciate your participation We appreciate your continued participation and we drive toward our RFP issuance, and again, to wrap up, please do reach out should you have any other questions, but thank you very much and have a nice afternoon

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