Rate Intervention and Utility Market Analysis

STATEMENT OF WORK for NAVFACSYSCOM Utility

Rate Intervention and Utility Market Analysis

I. Utility Rate Intervention (C.1 through C.9)

C.1 DEFINITIONS

The following acronyms or words shall have the corresponding meanings:

NAVFACSYSCOM: Naval Facilities Engineering Systems Command, Headquarters

FEA: Federal Executive Agencies

COTR: Contracting Officer’s Technical Representative

SOW: Statement of Work

T.O.: Task Order - A task order is a document (DD Form 1155) prepared by the Contracting Officer that is issued to the contractor and unilaterally orders work to be performed.

C.2 INTRODUCTION

a. The Department of the Navy, Naval Facilities Engineering Systems Command

(NAVFACSYSCOM) purchases utility services (electricity, water and natural gas) more than $1 billion annually. NAVFACSYSCOM intervenes in the utility regulatory ratemaking process before various federal, state or local authorities. A major part of NAVFACSYSCOM mission is to protect the Navy’s interests in utility cases, to supply technical support for Navy representation before regulatory bodies, and to participate in regulatory proceedings to ensure that the utility rates are reasonably close to the utility’s cost of providing the service, that they are not unduly discriminatory, and that the rates are just and reasonable. Frequently, NAVFACSYSCOM encounters situations where its participation in the regulatory proceedings concerning utility rate applications is impeded because of manpower, time or specific technical limitations. On occasion, NAVFACSYSCOM contracts professional expertise in certain disciplines in support of its own capabilities. The area in which expert assistance may be required is Cost Allocation and Rate Design.

b. Offerors must explicitly state how they can provide the required analysis, testimony, exhibits schedules and work papers or studies within a period not more than thirty calendar days from the date of receiving the assignment and pertinent original case data. Offerors should present in detail their technical and managerial plans for accomplishing such tasks in a timely manner.

C.3 SCOPE OF WORK

The following tasks are representative of work the contractor may be required to perform.

Each task order (T.O.) will include a Statement of Work (SOW) which specifically identifies the

requirements of each case.

a. Review and analyze the utility’s application including its filing, testimony, exhibits, and other rate case data, work papers, studies, and submit discovery questions, if necessary, as they relate to Cost Allocation and Rate Design.

b. Prepare suggested cross-examination questions for all witnesses of adversary parties.

c. Prepare testimony and attend hearings if the regulatory authority requires oral

presentation of the testimony. If such is required, the Contractor’s witness shall also provide

case counsel with technical support. The witness will also be subject to cross-examination by any party to the proceedings. Testimony is to be presented on behalf of the Navy, DOD, and all other FEA’s for consideration by the regulatory authority.

d. Provide technical notes for the preparation of legal briefs.

e. Analyze orders of the regulatory body and prepare a final report identifying the treatment of the issue presented by the Navy and its resultant cost reduction.

C.4 GOVERNMENT FURNISHED PROPERTY

None

C.5 CONTRACTOR FURNISHED ITEMS

The contractor shall provide all equipment, materials, and services to perform the

requirements of this contract.

C.6 STUDIES AND ANALYSIS REPORTS

a. Certain utility issues may require a preliminary analysis report to be performed for a

determination to be made as to whether there is a need for intervention or other Navy action.

b. The Contractor may, on his own, identify potential issues that can be challenged in

testimony, an estimate of the cost savings if the challenged issues are successfully litigated and a commentary regarding the likelihood of success in the challenge of each issue and bring them to the attention of the NAVFACSYSCOM without being solicited.

c. The Contractor shall perform utility-related studies as may be required by the

government. The deliverable item shall be a report.

C.7 ANALYSIS, DISCOVERY, TESTIMONY, CROSS-EXAMINATION, HEARINGS,

BRIEFS AND ORDER EVALUATIONS

a. DISCOVERY

(1) The Contractor shall provide in writing, one copy each, to the COTR and the case

counsel, simultaneously. All requests for data, documents and information to be served on the

utility or other parties shall be provided within the time constraints established in the procedural order and paragraph C.8.

(2) The Contractor shall avoid “canned” data requests as much as possible and shall

restrict the requests to those that would assist in the preparation of the Navy’s case.

(3) The Contractor shall integrate responses to discovery requests in developing Navy’s

testimony and brief preparation.

(4) The Contractor shall prepare proper responses to discovery requests served on the

Navy. Two copies of the responses shall be provided to the COTR unless otherwise directed.

b. TESTIMONY. The Contractor shall prepare and deliver testimony, exhibits and

schedules, and, if required, surrebuttal testimony on issues within the scope of the contract. A

draft of the prepared testimony shall be presented by the Contractor to the COTR for review,

discussion, and modification where needed. The Contractor may be directed to submit a second

draft, if necessary. When the COTR is satisfied with the testimony, the Contractor shall be

instructed to proceed with the final version. No changes of any nature shall be made to the

testimony after the COTR approval without his express authorization. Draft and final

testimony shall be submitted in strict adherence to the dates as will be communicated to the

Contractor. Final testimony shall be prepared in the format and in the number of copies as

required by the regulatory authority and will be communicated to the Contractor.

Information will be communicated by the NAVFACSYSCOM analysts via e-mail or telephone within the time constraints established in the procedural order and paragraph C.8.

c. CROSS EXAMINATION. The Contractor shall prepare proposed cross-examination

questions with anticipated answers based on the testimony, exhibits and schedules filed by

witnesses to be examined. The prepared cross-examination questions shall identify the ultimate

point to be developed because of a successful cross-examination, the detailed reasons for

asking them, expected responses, and alternative and follow-up questions. Questions are not to

be restricted only to those issues addressed in Navy’s case. A copy of the proposed cross examination questions shall be submitted to the COTR and case counsel simultaneously. The

Contractor shall be informed of the dates and places of examination of witnesses. The

Contractor’s attendance at the cross-examination hearings may or may not be required depending on the particulars of each rate case as will be communicated to the Contractor by NAVFACSYSCOM analysts via e-mail or telephonically within the time constraints established in the procedural order and paragraph C.8.

d. HEARINGS. The Contractor’s expert witnesses shall appear before the regulatory

body to support their testimony. For this phase, the Contractor shall prepare a summary of the

testimony to be delivered at the hearings. The summary shall be reduced to writing and

forwarded to the COTR at least five working days prior to the delivery of the testimony on the

witness stand. The summary may be waived if such is not the practice of the regulatory

authority. The witnesses shall be available to present the testimony and undergo the examination by other parties or to attend Navy’s cross-examination of its adversaries at the times and places set by the cognizant regulatory body.

e. BRIEF PREPARATION. After the conclusion of the evidentiary hearings, the Contractor shall review the pertinent transcripts and provide technical notes for the Navy brief preparation. Depending on the regulatory body’s practices, the briefing material may be in the form of either a simultaneous brief, or opening and reply briefs. In either form, the Contractor shall include the necessary rebuttal to arguments and criticisms of the Navy’s positions addressed in opening briefs or expected to be addressed in reply or simultaneous briefs submitted by adversary parties. The brief proposed by the Contractor shall be in the following format, and shall address, but not be limited to, the following, after a brief introduction and background:

(1) A statement of the objectives of Navy’s testimony.

(2) A complete coverage of every essential point raised with emphasis placed on

contested issues.

(3) An explanation and reconciliation of conflicting evidence to discredit opposing

parties, evidence and to highlight the persuasiveness of Navy’s proof, and to answer any

criticism during cross-examination of Navy witnesses.

(4) The misconceptions and NAVFACSYSCOM in the proof, testimony, or rebuttal offered by other parties’ witnesses.

(5) An explanation of why the regulatory authority should grant the approach offered by the Navy’s testimony.

(6) The Contractor shall cite the commission’s, other commissions’, or courts’ authority

in granting the same or comparable approaches, where applicable.

(7) The Contractor shall not repeat arguments made in its testimony except in summary and shall rely exclusively on the record developed during the hearing.  Reference to transcript pages shall be made in presenting the discussions dealing with items (3), (4), and (5) above.

(8) The proposed brief shall be typewritten and provided, one copy each, to case

counsel, and the COTR on the date to be communicated by NAVFACSYSCOM

analysts via e-mail and telephonically within the time constraints established in the procedural

order and paragraph C.8.

(9) Because experience indicates that briefs in many instances make or break the case, submissions that fail to comply with any of the above may be construed as failure to perform required services.

f. EVALUATION OF ORDERS. Upon receipt of an interim or final opinion and order of the regulatory body in the case, the Contractor shall analyze it and prepare the order evaluation report. The report shall include a synopsis of the case as it relates to Cost Allocation and Rate Design. It shall identify the issues the Contractor had presented and contrast them with the regulatory authority’s treatment in the order. The Contractor shall also provide the calculated dollar impact of each issue separately on the FEA, DOD, or the Navy, as appropriate.

If the impact cannot be calculated, the Contractor shall provide an estimate of the dollar impact, citing the assumptions made. The Contractor is encouraged to make recommendations for changes in use pattern to be undertaken by the Navy to reduce its utilities costs. Two copies of the Order Evaluation report shall be provided to the COTR within twenty-five calendar days from the date of the Contractor’s receipt of the regulatory authority’s order.

C.8 TIME CONSTRAINTS

a. Constraints are imposed by the regulatory bodies in all rate case proceedings. These

limitations will vary considerably by rate case and commission.

b. The Contractor explicitly accepts those constraints acknowledging that they do not constitute, in any way, a valid reason for not performing any of the services required by the terms of this contract or by properly executed T.O. issued under its provisions. The deadline dates shall be conveyed promptly to the Contractor as the case develops.

c. The COTR shall have the right to realign imposed deadline dates to allow for review, redrafting, printing or mailing time.

d. The COTR shall maximize the time available for the Contractor to perform within these limitations. The Contractor shall, upon reasonable notice, be available for meetings with the COTR and case counsel as needed for proper performance of the intervention effort.

C.9 SETTLEMENTS

Occasionally, an applicant utility company or other parties to a rate case propose a partial

or complete settlement of issues involved in the proceeding. In such situations, the Contractor

whether approached directly by such parties or by the Navy case counsel shall assess the

proposal and its impact on the Navy but shall not, either explicitly or implicitly, indicate

acceptance or rejection to anyone, including a case counsel, before receiving direct instruction

from NAVFACSYSCOM.

II. UTILITY MARKET ANALYSIS (C.10 through C.13)

C.10 INTRODUCTION

a. This scope of work describes the professional service requirements in the areas of electricity and natural gas commodity and delivery service market analysis and procurement recommendations.

b. The Contractor shall provide the services outlined below and shall not deviate from the provisions of the following Services section in any manner without an appropriate modification to the task order which, if found necessary to be made verbally, shall be confirmed in writing within five working days from that time. 

c. The contract actions are intended to focus on the primary Navy vendor(s) for electricity and natural gas, respectively, for each specified location. The final reports, unless otherwise specified, are intended for market intelligence and general budget planning purposes.

d. To support these analyses, NAVFACSYSCOM will provide to the contractor utility vendor and billing data from the Utility Tariff Rate Modeling System (UTRMS) Billing Data Cost Dashboard. NAVFACSYSCOM will also provide invoice examples, as necessary.

C.11 SCOPE OF WORK

a. The contractor shall develop comprehensive reports to assess overarching market trends, seasonal impacts and vendor specific updates.

b. The contractor shall review energy market intelligence and energy commodity price projections based on external sources including but not limited to the U.S. Department of Energy’s Energy Information Administration (EIA), S&P Global, and exchanges such as the Intercontinental Exchange and Commodity Markets Exchange Group.

c. The contractor shall also review vendor-specific information such as regulatory agency posted tariff and rates, resource planning documents, annual reports, and press releases. The availability of data for each vendor varies according to whether it is a regulated utility, private subsidiary, or publicly owned company.

d. Identify and rank market intelligence researched implications and analyses, associated Navy risks, benefits of recommendations and procurement alternatives.

e. Results for each vendor are to be reported by the relevant region/installation, followed by a “Potential Impact on NAVFACSYSCOM” section to highlight any significant observations or concerns. For each Navy vendor the contractor shall provide the following data:

    (1) Trends in vendor rates applicable to the NAVFACSYSCOM;

    (2) Potentially impactful regulatory filings;

    (3) Alternative rate schedules and/or procurement strategies applicable to Navy installations

    (4) New infrastructure investments and plans for generation mix/capacity, transmission infrastructure, evolving customer classes, etc. Where this information is absent, it shall be only the result of the data being unavailable or there being no reported news for this vendor applicable to Navy installations.

C.12 GOVERNMENT SUPPLIED INFORMATION AND DATA

NAVFACSYSCOM will provide UTRMS Navy billing/vendor information as needed for installations/regions within scope.

C.13 DELIVERABLES

a. Report – A written document summarizing all components, reference data/information and analysis with full narrative, organized by NAVFACSYSCOM and corresponding regional market and vendor(s).

b. Brief – A slide deck summarizing all components with concise points and graphics, tailored to NAVFACSYSCOM communication with stakeholders on key considerations and recommendations by installation.

III. GENERAL PERSONNEL REQUIREMENTS (C.14 through C.17)

C.14 KEY PERSONNEL

The Contractor shall assign to this contract the following key personnel labor categories:

1. Expert Witness
2. Rate Consultant
3. Technical Analyst
4. Administrative Assistant

C.15 SUBSTITUTION OF PERSONNEL

a. The Offeror shall assign to the contract only those persons whose names were

submitted with its proposal and were accepted by the Government. Substitutions shall only be

made in accordance with this paragraph.

b. During the contract performance period no personnel substitutions will be permitted

unless such substitutions are approved by the Contracting Officer. The Contractor shall

promptly notify the Contracting Officer if personnel substitution is needed and shall provide the

information required by paragraph c. below. If the substitute is unacceptable, the T.O. may be

cancelled.

c. All requests for substitutions must provide a detailed explanation of the circumstances

necessitating the proposed substitution, a complete resume for the proposed substitute, and any

other information as may be required by the Contracting Officer to approve or disapprove the

proposed substitution. The Contracting Officer will promptly notify the Contractor of his

determination concerning the proposed name.

C.16 MINIMUM PERSONNEL QUALIFICATIONS

EXPERT WITNESS

--Fifteen (15) years’ experience demonstrating knowledge, expertise and presentation of testimony pertaining to electric, natural gas and/or water cases at multiple state public utility

commission and familiarity with associated regulations and administrative procedures.

RATE CONSULTANT

--Five (5) years’ experience demonstrating knowledge, expertise and presentation of testimony pertaining to electric, natural gas and/or water cases at multiple state public utility

commission and familiarity with associated regulations and administrative procedures.

TECHNICAL ANALYST

--Ten (10) years’ experience in analyzing utility markets, rates and incremental costs, conducting cost of service studies and rate assessments, and evaluating utility cost allocation models

ADMINISTRATIVE ASSISTANT

--High school diploma or its equivalent

--2-5 years experience in the field or in a related area

C.17 PRICING EXHIBIT

ELIN Labor Category Loaded Rate Unit of Issue EST Hours EST Total

Base Year 13 Mar 2027 – 12 Mar 2028

A001 Expert Witness

A002 Rate Consultant

A003 Technical Analyst

A004 Admin Assistant

A005 

Option Year 1 13 Mar 2028 – 12 Mar 2029

B001 Expert Witness

B002 Rate Consultant

B003 Technical Analyst

B004 Admin Assistant

B005

Option Year 2 13 Mar 2029 – 12 Mar 2030

C001 Expert Witness

C002 Rate Consultant

C003 Technical Analyst

C004 Admin Assistant

C005