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Frequently Asked Questions - #57

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FAQ-57

If an energy supplier that is not participating in the BGS Auctions makes an arrangement to sell either an amount of capacity or power to an entity that intends to become a Registered Bidder in the auctions, but the sale is contingent upon this entity winning at the auction, does this arrangement need to be disclosed in the Part 1 Application?


The arrangements that must be disclosed in the Part 1 Application may be described as follows.  An applicant to one or both of the BGS Auctions must disclose any bidding agreement, bidding arrangement, bidding consortium, or joint venture in the Part 1 Application.  Please consult the definitions of bidding agreement, bidder consortium and joint venture provided in the glossary to the Part 1 Application and the Part 2 Application.  In such arrangements, two or more entities are cooperating to submit bids in the auctions.  All entities participating in such arrangements must be named in the Part 1 Application and are included in the list of Qualified Bidders.  All entities participating in such arrangements are asked to make the certifications under the Association and Confidential Information Rules in the Part 2 Application (even if only one of the entities is expected to sign the BGS Supplier Master Agreement).  The pre-auction letter of credit must be submitted in a way that allows the EDCs to draw upon the pre-auction letter of credit if any of the entities that are parties to such arrangements fail to abide by these certifications or otherwise make a material omission or misrepresentation in the applications.  Please note that all such arrangements must be entered into before the Part 1 Applications are received, must be disclosed in the Part 1 Application, and cannot be entered into later in the Auction Process.  

While bidding agreements, bidding arrangements, bidding consortia, and joint ventures must be entered into before the Part 1 Application and disclosed in the Part 1 Application, this does NOT mean that all contractual arrangements entered into before the Part 1 Application by an applicant and that may be related to its participation in the BGS Auctions must necessarily be disclosed in the Part 1 Application.  There are a variety of contractual arrangements in which an applicant to the BGS Auctions can enter that are not bidding agreements, bidding arrangements, bidding consortia, or joint ventures.  There are a variety of contractual arrangements for power to serve BGS load were the applicant to be a winner at the BGS Auction that an applicant may enter into prior to the Auction and that do not require a disclosure in the Part 1 or the Part 2 Application.

While you provide a general description of the type of arrangement in which you have entered, you do not provide sufficient details for a definite response as to whether disclosures are necessary in the Part 1 or the Part 2 Application in your case.  We can state that neither the fact that the arrangement in your case is entered into before the Part 1 Application or the fact that the arrangement is contingent on your winning in the auction imply that a disclosure is necessary.  If the arrangement in question is not for purposes of submitting joint bids in the auction, and if you determine in good faith that the arrangement does not correspond to a bidding agreement, bidder consortium and joint venture as defined in the Part 1 Application, then the arrangement need not be disclosed in the Part 1 Application.

You also do not provide sufficient details regarding your arrangement for the Auction Manager to provide guidance as to whether the arrangement may affect your ability to make the certifications required by the Association and Confidential Information Rules in the Part 1 and Part 2 Applications.  These  certifications include that the Qualified Bidder certify that: it will not disclose at any time information regarding the list of Qualified Bidders (including the fact that it is itself a Qualified Bidder); it does not have any knowledge of confidential information relative to the bidding strategy of another bidder; it will not disclose confidential information relative to its own bidding strategy; it is not the purchasing party in any contract for any product that would require the disclosure of any confidential information relative to bidding strategy or confidential information regarding the Auction Process to the counterparty, or that would provide instructions to act in a way determined by the counterparty; and that no entity has agreed to defray the Qualified Bidder’s costs of participating in the auction. Certainly, the fact that you are entering in this arrangement prior to the list of Qualified Bidders being established facilitates your ability to make the certification that you have not disclosed information regarding the list of Qualified Bidders since qualification of bidders has not yet occurred.  Similarly, the fact that you are entering in this arrangement with an entity that will not be a Qualified Bidder in the auction also facilitates your ability to make the certifications required by the Association and Confidential Information Rules in the Part 1 and Part 2 Applications (note, however, that if unexpectedly the entity becomes a Qualified Bidder, you may be unable to make or uphold some of the required certifications).  While your ability to make such certifications is facilitated by these circumstances, such circumstances do not mean that you can automatically make all certifications required by the Association and Confidential Information Rules.  It is the responsibility of each applicant and bidder to consider each certification carefully in light of the definitions in the Auction Rules and in the Application Forms so as to determine in good faith whether any circumstance, including a transaction or arrangement of the type in which you have entered, may prevent the applicant or bidder from making or upholding any of the certifications in the Part 1 and Part 2 Applications.



11/15/2021, in Association and Confidential Information Rules.

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