First Nations Power Authority and SaskPower 100 MW Solar Project—Timelines and Mandatory Criteria for Proponents

September 03, 2024

Written By Jason Roth, Ashley White, Luke Morrison, David Macaulay, Geoff Stenger, Jessica Kennedy and Shanza Arif

On August 1, 2024, the First Nations Power Authority (FNPA) issued a Request for Supplier Qualifications (RFSQ) for the right to develop a 100 MW Solar Project to be located in South Central Saskatchewan (Project).

The deadline for RFSQ responses is approaching quickly and there are important mandatory commitments and requirements that proponents must address.

The FNPA is a not-for-profit Saskatchewan corporation, with a mandate of facilitating the development of First Nations-led power projects and promoting Indigenous communities’ participation in the clean energy economy. FNPA has entered into an agreement with SaskPower to create, administer, conduct and oversee the procurement process for the Project. As part of the process, FNPA will recommend a proponent to SaskPower. SaskPower has the right to make a final determination as to whether it will proceed with FNPA's recommended proponent.

The successful proponent is required to have a minimum of 30 percent ownership by two or more Saskatchewan First Nations, at least one of which does not have previous experience in utility scale solar projects.

Overview of Key RFSQ Criteria

Scope of the Project

The successful proponent will finance, develop, own and operate the Project. The Project's scope includes design and construction of interconnection facilities to enable the Project to interconnect with SaskPower's transmission system. Under a power purchase agreement (PPA) to be entered into between the successful proponent and SaskPower, SaskPower will have the exclusive right to buy metered energy, ancillary services and environmental attributes from the Project for a fixed term of 25 years. Commercial operation must be achieved by the later of November 1, 2028, and certain external dates that will be specified in the PPA.

Stages of the Procurement Process

The procurement process will be carried out in three stages:

1. RFSQ Stage: All interested parties must submit their RFSQ responses by September 20, 2024. FNPA will evaluate the responses against the mandatory evaluation criteria (detailed below). Based on its evaluation, FNPA will pre-qualify respondents to submit formal proposals.
2. Request for Proposals (RFP) Stage: The RFP and draft PPA will be released in or around mid-October 2024. Proponents must submit their exploratory interconnection study by November 14, 2024 and proposal by March 31, 2025. FNPA will recommend a successful proponent to SaskPower by April 30, 2025. SaskPower will make its determination of whether or not to proceed with FNPA's recommended proponent by the last quarter of 2025. 
3. PPA & Project Operations Stage: If SaskPower accepts the successful proponent's proposal, the parties will engage in discussions and the final PPA will be executed after SaskPower completes the interconnection service request data review report. The Project will proceed towards operation.

The Project is being carried out independently of SaskPower's new Renewable Access Service (RAS) program which is currently being developed by SaskPower as a further means to promote renewable generation in the province.  Under the RAS program, SaskPower operates as the wheeling agent, moving power from the independent power producer’s renewable generation site to a commercial customer’s site. The producer and customer would enter into a private contract in respect of the project, such as in relation to environmental attributes.

RFSQ Evaluation Criteria

RFSQ responses will be evaluated on the basis of several pass/fail mandatory criteria, including the following:

1. Equity Commitment and Funding

Respondents must provide an equity commitment of at least C$20 million. The equity may be in the form of cash, cash equivalents, in-kind contributions and grants. It does not include proceeds from debt financing. Additionally, the respondent (which may include one or more equity providers) must have an interest coverage ratio equal to or greater than 1.5.

Designated equity providers must supply a commitment letter, which confirms the equity provider's intention to provide an equity and verifies that the provider’s required corporate and other internal approvals have been obtained in respect of the equity commitment.

The RFSQ identifies that, in relation to financing the Project beyond the above-noted minimum equity commitment, respondents may look to government funding sources such as the Smart Renewables and Electrification Pathways (SREP) Program, Canada Infrastructure Bank low-interest financing programs (such as under the Indigenous Community Infrastructure Initiative as described in an earlier post, Landmark Indigenous Energy Infrastructure Equity Partnership in Alberta), First Nations Finance Authority Indigenous financing programs, or obtaining support from the Alberta Indigenous Opportunities Corporation or the Saskatchewan Indigenous Investment Financial Corporation.

2. Experience Requirements

Respondents (which may include one or more experience partners) must have acted as a principal developer for two solar generation projects, with a nameplate capacity of 10 MW or greater, each of which must have reached commercial operation within ten years before the response submission deadline, and each of which has been in commercial operation for at least three years at the submission deadline. International projects can fulfill this requirement.

3. FNPA Membership

Respondents must have purchased a membership in the FNPA prior to submission of a proposal.

4. Project References

Respondents must provide at least two letters of support from previous solar generation projects.

Preview of RFP Requirements

The RFSQ includes a preview of select requirements which are anticipated to be addressed in the RFP, such as the 30 percent minimum First Nations equity partners requirement, Project location and site control requirements, environmental criteria, requirements relating to Indigenous participation, engagement and community benefits plan matters, and credit support and performance security.

Updates

Bennett Jones will continue to monitor and provide updates on the RFSQ and RFP processes. We invite those with questions to contact the authors for further information.

Authors