Electricity and Natural Gas Forward Price Forecasts

NOTICE OF INTENT TO ISSUE SOLE SOURCE AWARD 89503320PWA0000000 The Western Area Power Administration Sierra Nevada Region Folsom, CA, intends to negotiate with EOX holding LLC, Houston, TX, on a sole source basis under the authority of FAR Subpart 13.106-1(b) - Only one responsible source and no other supplies or services will satisfy agency requirements, to procure Electricity and natural gas price forecasts, known in the industry as forward curves, are a useful tool for all parts of an electric utility, including front, mid, and back office, in important applications such as validating internal price curves used in mark-to-mark accounting. Forward curves can also be used in numerous analytical applications such as counterparty credit risk, value-at-risk (VAR), potential future market exposure and various procurement decisions. In addition, a forward curve can be derived to reflect the degree of correlation between forward electric prices and forward gas prices which are known as electricity/natural gas correlation curves. Forward curves represent the market's current valuation for the standard volumes for electricity or natural gas over a predetermined interval of days (e.g., day, month, seasonal block, year, etc.) and for a specific interval of time (e.g., peak hours, off-peak hours, or combination of the two). Forward prices are not intended to be - predictive and don't represent a forecast of what electricity or natural gas will be worth in the future - cash markets. to provide the electricity and natural gas forward curves associated with its Risk Management Program objective. The requirements associated with such forward curves include, but are not limited to, the following: Publication of the following forward curves for each business day: electricity, natural gas, and electricity/natural gas correlation. Preference will be given to prospective vendors which can demonstrate an extensive history of publication of such forward curves The required pricing locations will be Henry Hub and PG&E City Gate for natural gas and NP15 and California-Oregon Border (COB) for electricity. The forward curves must include prices for a minimum duration of six years, beginning from the upcoming month (prompt month) The forward curves must have the granularity to be presented for the minimum 6 year duration specified above, on an individual monthly, quarterly, and calendar year basis. To the extent possible, the forward curves should be based on actual market transactions where liquidity permits, and such market information should be cross-checked and validated to ensure the accuracy of the data. In illiquid markets, and in instances in which there is an absence of market pricing data, sophisticated mathematical techniques should be used to forecast market pricing. All forward curve data should be made available on an SFTP site via excel or CSV so that it can be downloaded and analyzed by WAPA staff. Programmatic interfaces, such as web services, are also available. The NAICS code is 523140 (Commodity Contracts Brokerage) with a small business size standard of $41,500,000.00. Interested parties that believe they could satisfy the requirements listed above for WAPA may clearly and unambiguously identify their capability to do so in writing on or before the response date for this notice. This notice of intent is not a solicitation. Information submitted in response to this notice will be used solely to determine whether competitive procedures could be used for this acquisition. Any questions regarding this notice must be submitted in writing via email apowell@wapa.gov All responses to this notice of intent must be submitted so that they are received no later than August 07, 2020.