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Anaheim, CA 92805
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CITY COUNCIL AGENDA REPORT
City of Anaheim
PUBLIC UTILITIES DEPARTMENT
DATE: FEBRUARY 7, 2023
FROM: PUBLIC UTILITIES DEPARTMENT
SUBJECT: APPROVAL OF POWER SALES AGREEMENT FOR SOLAR
AND ENERGY STORAGE RESOURCE
ATTACHMENT (Y/N): YES ITEM # 09
GOVERNMENT CODE § 84308 APPLIES: NO
RECOMMENDATION:
That the City Council, by Motion:
1) Approve the Power Sales Agreement (Agreement), between Southern California Public Power Authority (SCPPA) and the City of Anaheim (Anaheim) for the Sapphire solar and energy storage project (Project) in the approximated annual sum of $6.6 million for a twenty year term; and
2) Authorize the Public Utilities General Manager, or designees, on behalf of Anaheim, to execute and deliver the Agreement and other related agreements, including collateral assignment agreements, power scheduling agreements, and scheduling coordinator agreements as well as certificates, opinions, disclosures, submittals, reports, filings, attestations, and any other related documents; incorporate amended Appendix Cs to the Agreement as a matter of administration; and take all actions as are necessary or advisable to implement and administer the Agreement.
DISCUSSION:
At their meeting on January 25, 2023, the Public Utilities Board (PUB) recommended that the City Council approve the Power Sales Agreement for Solar and Energy Storage Resource.
California’s Renewable Portfolio Standards (RPS) establishes requirements for utilities to meet its resource mix with clean, sustainable, renewable energy resources. Most recently in 2022, Senate Bill (SB) 1020 affirmed that 100% of electricity will come from renewable and carbon-free resources by 2045. Anaheim Public Utilities (APU) seeks to procure renewable solar energy coupled with energy storage to help meet its State mandated RPS targets and continue its path towards a more sustainable power supply mix on behalf of Anaheim customers.
Approval of Power Sales Agreement for Solar and Energy Storage Resource February 7, 2023
SCPPA, which is a joint powers agency comprised of twelve public power utilities in Southern California, including Anaheim, administers ongoing Requests for Proposals (RFP) for renewable energy resources and energy storage solutions in order to leverage economies of scale for shared projects. In 2022, SCPPA received 24 renewable project proposals from ten respondents. The RFP solicited competitive proposals for renewable energy projects or products consistent with the California Renewable Energy Resources Program (Public Resources Code Section 25740, et seq.) and the California Renewables Portfolio Standard Program (Public Utilities Code Section 399.11, et seq.).
As part of the SCPPA RFP procurement process, EDF Renewables, Inc. (“EDFR”), on behalf of Sapphire Solar, LLC (Sapphire), submitted a solar energy and energy storage proposal. The cities of Anaheim, Pasadena, and Vernon are collectively participating in this joint procurement through SCPPA.
The Sapphire Project is a solar facility plus energy storage system located in Desert City, Riverside County, California. The energy storage system will be comprised of batteries that will allow for storage of solar energy to be dispatched when needed, typically during evening hours when the sun is setting.
The proposed Agreement with SCPPA would provide APU with 39 Megawatts (MW) of renewable solar power and 19.6 MW of energy storage with battery capacity of 4-hour duration. As part of the Agreement, APU will receive all renewable energy attributes associated with APU’s project share consistent with RPS compliance goals. Anaheim’s share of the renewable energy is enough to serve approximately 15,000 homes in Anaheim annually. The expected date of operation is December 2025.
Due to escalating material costs and supply chain constraints, the Agreement is structured to allow for pricing variability depending on final construction costs. Construction costs will be validated by a third-party auditor, and APU will only pay for the energy it receives from the Project. The estimated annual amount is $6.6 million per year, with a floor of $5.2 million and a ceiling of $7.1 million per year.
Since batteries may not last the full duration of the 20-year term, the Agreement (specifically, Appendix C) includes the option to replace worn battery cells in year 15.
IMPACT ON BUDGET:
The Power Sales Agreement will require expenditures of approximately $6.6M annually over 20 years upon Project operation. Funds will be included in APU’s future restricted Electric fund budget proposals, which will be subject to City Council approval of budget appropriations.
Respectfully submitted,
Dukku Lee
Public Utilities General Manager
Approval of Power Sales Agreement for Solar and Energy Storage Resource February 7, 2023
Attachment:
1. Sapphire Solar Project Power Sales Agreement, which includes Appendix C (Power Purchase Agreement between Sapphire Solar, LLC and Southern California Public Power Authority)