R -- MANAGEMENT SUPPORT/CONSULTANT

Notice Date

April 6, 2001

Contracting Office

US Environmental Protection Agency, Region III Contracts Branch (3PM10), 1650 Arch Street, Phildelphia, PA 19103-2029

ZIP Code

19103-2029

Solicitation Number

PR-R3-01-10179

Response Due

April 25, 2001

Point of Contact

David Senderling, Contracting Officer, v(215)814-5309, f(215)814-5211, e(senderling.david@epa.gov)

E-Mail Address

David Senderling, C.P.M., CPCM, A.P.P., Contracting (senderling.david@epa.gov)

Description

Notice of intent to issue Solicitation No. PR-R3-01-10179 for Phase II analysis of regulatory impacts of restricted mining scenarios on coal markets and electricity prices in West Virginia, Kentucky and Virginia for the period from 2001 -- 2010 using proprietary database and forecast models. The proposed contract action is for supplies or services for which the Government intends to solicit and negotiate with only one source. Interested parties may identify their interest and capability to respond to the requirement and submit a quotation. This notice of intent is not a request for competitive quotations. However, all quotations received by 9:00 AM ET, Wednesday, April 25, 2001 will be considered by the Government. Quotations must be received by 9:00 AM ET, Wednesday, April 25, 2001 via facsimile to Environmental Protection Agency, Region III, Contracts Branch (3PM10), Attn: David Senderling, Contracting Officer, f(215)814-5211. M/F Notice of intent for analysis of the Economic Impact of Mountaintop Mining and Valley Fills Environmental Impact Statement. This scope of work outlines assistance required by the US EPA Region III to support the development of a Programmatic Environmental Impact Statement to assess the impacts of mountaintop mining and valley fill practices in sub-regions of West Virginia, eastern Kentucky and Virginia, as defined by the EIS Steering Committee. In December 1998, Federal agencies and environmentalists agreed to a partial settlement of a lawsuit by the West Virginia Highlands Conservancy and several coal field residents against the WV Department of Environmental Protection (WVDEP) and the U.S. Army Corps of Engineers. Under the agreement, the EPA, the Office of Surface Mining, the Corps of Engineers, and U.S. Fish and Wildlife Service, in conjunction with WVDEP, agreed to develop a Programmatic Environmental Impact Statement to assess the impacts of mountaintop mining and valley fill (MTM/VF) practices in Appalachian coal fields and to evaluate a range of changes to regulatory requirements and practices. This effort is part of a three-phase study to evaluate the economic impacts of regulatory changes for the mining industry. Phase 1 examined the impact of proposed regulatory changes on the amount of mineable coal reserves. Phase 2 uses these results to estimate the market impacts on coal prices, coal production, electricity generation and electricity pricing. Phase 3 addresses the total direct and indirect impact on the economies of the three eastern states included in the study. Work on Phase 1, under a separate EPA contract, is proceeding, to calculate coal reserves in West Virginia and the impacts of any regulatory restrictions on the amount of coal mineable with mountaintop mining and valley fill techniques. The results of that work will become input to the effort by the contractor, which is the subject of this proposal for the Phase 2 work. The contractor will analyze the implications of those regulatory restrictions on the markets for coal mined in West Virginia, eastern Kentucky and Virginia, as well as the implications on coal and electricity prices. The contractor will use H&A's proprietary database of coal mine operations and costs, H&A's integrated Coal Forecasting System and the National Power Model, data produced under Phase I, to conduct the analysis of regulatory impacts on the selected coal markets and energy prices. The contractor will produce a baseline forecast with its models for each year in the period 2001-2010. This baseline forecast will be under an assumption of pre-lawsuit status quo with regard to Central Appalachian mining regulations. However, the changes in utility plant air emission regulations will be allowed to change according to the scenario approved by the EIS Steering Committee, which includes the implementation of National Ambient Air Quality Standards for ground-level ozone and for fine particulate matter. Specifically, the modeling will assume the following post-1998 changes in environmental regulation of electric power plants: Title IV Phase II SO2 standards starting in 2000; EPA 19-state (formerly 22-state before court relief granted for MO, WI and GA); NOx SIP Call effective in 2005 (rather than 2003); and NAAQS fine particulate standards represented as 50% reduction in SO2 from Phase II levels beginning in 2008. Holding this same year-by-year pattern of air emission regulations consistently the same across mining scenarios, the contractor will conduct an assessment, across four alternate mining regulatory scenarios, of changes from the base case in supply conditions in five pre-defined mining sub-regions of West Virginia, four pre-defined sub-regions of eastern Kentucky, and one region representing Virginia. The contractor will then model the coal and electricity market implications of the four alternate regulatory scenarios using H&H's proprietary Coal Forecasting System and the National Power Model. For the base case and for each of the four alternate mining regulatory scenarios (five cases in total), the contractor's modeling will provide outputs for each year of the 2001-2010 period. The contractor will provide projections under each scenario for each year for the following variables: Coal tonnage; Direct coal employment; Mine capacity capital expenditures; Average coal price, FOB mine; Megawatt-Hours of generation; Average wholesale price (lambda costs) of electricity; Environmental clean-up equipment capital expenditures for utilities; Electricity capacity investments by type (construction, equipment, etc.); Major coal mine operating costs by category; and Average U.S. wholesale price (lambda costs) of electricity. Except for the U.S. wholesale price of electricity, all of these variable outputs will be provided by study sub-region. In any instance where the normal output is at a level higher than the study sub-regions, the contractor will collaborate with the Government to allocate the results to study regions. In addition to the 2001-2010 forecast, the contractor will provide comparable 1998-2000 historical data for use in calibrating models (such as the REMI model) to be used by the Government in the Phase 3 work of addressing the total direct and indirect economic impact on the economies of the states being studied. If there are applicable deviations from actual historical, then the contractor's best estimates of counterfactual data based on the pre-lawsuit status quo also will be provided. These quantitative outputs from the contractor are specifically designed to be applicable as inputs to further economic modeling (beyond this present proposal for work) of the indirect impacts beyond coal mining on the economy within each of the selected states being studied, as well as their sub-regions. The contractor will also respond to public comments on the draft environmental impact statement and will assist in preparation of the final report along with other contractors to EPA. The time period from receipt of final Phase I data is 18 weeks to the submission of all data in electronic format. Submit quotations via facsimile, which shall be considered by the Agency. Quotations should be in the following format: 1) Develop E.KY and VA reserve impact techniques, _____hrs @$_____ = $_____; 2) Incorporate Phase I data into WV mine curve cost steps,_____hrs @$_____ = $_____; 3) Incorporate Phase I data into KY and VA mine curve cost steps, _____hrs@ $_____ = $_____; 4) Adding ancillary mine costs to mine cost curves, _____hrs@ $_____ = $_____; 5) Adaptation of the revised cost steps into model format, _____hrs@ $_____ = $_____; 6a) Model runs, _____@ $_____ = $_____; 6b) Non mine curve set-up, _____hrs@ $_____ x _____ = $______; 7) Post modeling aggregating of sub-level data,_____hrs@ $_____ = $_____; 8) Post modeling for surface vs. deep mine tonnage, _____hrs@ $_____ = $_____; 9)Interpretation and analysis of modeling results, _____hrs@ $_____= $_____; 10) Report write-up, _____hrs@ $_____ = $_____; 11) Interim meetings/phone calls, _____hrs@ $_____ = $_____; 12) Post EIS release meetings and response to public comment, _____hrs@ $_____ = $_____; 13) Total Proposed Costs $_____. An determination by the Government not to award a sole source contract will be based on the responses to this notice and is solely within the discretion of the Government. Information received will normally be considered solely for the purpose of determining whether to conduct a competitive procurement.

Record

Loren Data Corp. 20010410/RSOL001.HTM (W-096 SN50I5C3)