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Navy Seeks Renewable Resources Through a WAPA RFP

October 07, 2014 posted by Eric Christensen

Last week, the Western Area Power Administration ("WAPA") issued a Request for Proposals ("RFP") seeking renewable energy for Navy bases located in WAPA's California service territory. The RFP seeks bids for new renewable generation projects with up to 150 MW of capacity.

Several details of the RFP are worthy of note. First, rather than seek to purchase renewable project output directly, the Navy has employed WAPA to purchase energy on its behalf. Because WAPA, rather than the Navy, is the purchaser, the Federal Acquisition Regulations do not apply, which should significantly simplify the purchasing process. In addition, the Navy will benefit from WAPA's expertise in the energy markets. The unique arrangement could serve as a useful model for purchases by the Department of Defense in other parts of the country served by federal power marketing administrations. Such administrative innovations may be necessary if the Department of Defense is to reach its ambitious goals of obtaining 25% of its energy from renewable resources by 2025.

A second important detail is that WAPA is seeking renewable resources that qualify as "Category I" resources under California's renewable portfolio standard -- that is, the resources must be directly interconnected with a California balancing authority, delivered to a California balancing authority without substituting power from another source, or dynamically scheduled into California. This aspect of the RFP is unfortunate for several reasons. First, this aspect of the RFP appears to legitimize California's efforts to erect artificial barriers to imports of renewable energy from other states, an approach that is legally suspect under both the Commerce Clause and the Supremacy Clause of the U.S. Constitution. Second, by effectively limiting eligible bidders to those that operate in or near California, this restriction is likely artificially inflate the Navy's cost of renewable energy. Third, the restriction undermines the market for renewable energy in areas of the country that have some of the best resources, such as wind power in the Pacific Northwest and Great Plains region and solar in the Southwest desert. Proposals must be submitted to WAPA by October 17.