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CITY COUNCIL AGENDA REPORT
City of Anaheim
PUBLIC UTILITIES DEPARTMENT
DATE: NOVEMBER 13, 2024
FROM: PUBLIC UTILITIES DEPARTMENT
SUBJECT: RENEWABLE POWER PURCHASE AND SALE AGREEMENT
FOR WIND FARM GENERATING FACILITY
ATTACHMENT (Y/N): YES ITEM # 08
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion:
1. Approve the Renewable Power Purchase and Sale Agreement (Agreement) with Energy Development & Construction Corporation (doing business as EDCC) by which EDCC will own, operate, and maintain a wind farm generating facility (Project) and sell to the City of Anaheim (City) all Project-generated energy and renewable attributes including a right of first refusal to all of the Project’s future potential products, with an initial term of ten years and up to two optional ten- year extensions, at an approximate annual cost of $1.8 million during the initial term, which may be increased once at any time by up to 17% if EDCC elects to repower the Project to expand its generating capacity; and,
2. Authorize the Public Utilities General Manager, or designees, on behalf of the City, to (a) execute the Agreement (and any associated documents); (b) execute any amendments or restatements to the Agreement, including the optional term extensions, that are cost-neutral/reducing or would involve only minor administrative cost increases; (c) execute any documents needed to carry out the transaction as contemplated by the Agreement, such as collateral assignment agreements, power scheduling agreements, and scheduling coordinator agreements; and (d) take such necessary or advisable actions to implement and administer the Agreement.
DISCUSSION:
At its meeting on October 23, 2024, the Public Utilities Board recommended that the City Council approve the Agreement with Energy Development & Construction Corporation.
Anaheim Public Utilities (APU) is on a pathway towards achieving a 60% renewable energy target by 2030 and carbon-free resources by 2045, consistent with State legislation established through Senate Bill (SB) 350 – the Clean Energy and Pollution Reduction Act and affirmed in SB 1020. To meet these ambitious statewide policies, Renewable Power Purchase and Sale Agreement for Wind Farm Generating Facility November 13, 2024
APU is in the process of acquiring new renewable energy resources to serve Anaheim customers.
APU issued a Request for Proposals (RFP) in October 2023 seeking renewable energy resources and energy storage solutions. EDCC submitted a proposal for the Project, an
11.7 Megawatt (MW) renewable wind generation facility named Karen Avenue Wind Farm, near North Palms Springs, California, for a 10-year term. APU’s evaluation of the proposal included consideration of the Project’s location and access to transmission lines, APU’s ability to use the Project for complying with the California Energy Commission’s (CEC) Renewable Portfolio Standards (RPS), EDCC’s operation and maintenance experience and performance record, and a cost-benefit assessment in consideration of current market prices. The same developer has an existing agreement with APU for its San Gorgonio Wind Farm, a 31 MW facility in Whitewater, California, and has met its contractual obligations.
The Project’s energy output is approximately 30,000 Megawatt-hours (MWh) per year, which is enough renewable energy to power 5,000 Anaheim homes. The Agreement includes a one-time ability for EDCC to repower the Project, which could increase the Project’s capacity by up to 17%. Additionally, APU holds the right of first refusal for any future attributes developed for the Project, including battery energy storage. Adding battery storage would allow APU to capture and store wind energy for use during periods of peak demand. The Agreement also requires EDCC to offer any Resource Adequacy (RA) attributes, the electric capacity associated with the Project, to APU before offering them to other purchasers. Should these Project enhancements result in changes to the Agreement in the future, pricing and related terms will be evaluated and an amendment developed for the Public Utilities Board and City Council’s consideration.
This wind resource contributes to APU’s renewable portfolio complying with state mandates and operation is scheduled to commence in early 2026. APU will only pay for the resources received, which is approximately $1.8 million annually over the initial ten- year term, commencing upon the Project’s operation date, and potentially increasing by up to 17% if the Project is repowered to increase its capacity.
IMPACT ON BUDGET:
Funds for the Agreement will be proposed in APU’s Fiscal Year 2025/26 restricted Electric Utility Fund budget, with future years subject to City Council approval of budget appropriations.
Respectfully submitted,
Dukku Lee
Public Utilities General Manager
Attachment:
1. Renewable Power Purchase and Sale Agreement for Wind Farm Generating Facility