ADMINISTRATIVE REPORT
MEETING DATE: June 25, 2025 AGENDA CATEGORY: Consent - Agreements TO: Honorable Mayor and City Council
FROM: Zachary Meyer, Public Works Director
DATE: June 9, 2025
SUBJECT: Amendments to the following agreements with FFP BTM Solar, LLC for the installation of solar panels and battery storage infrastructure at Wastewater Treatment Plant #3:
1. Amendment No. 2 to Agreement No. 2020-191
2. Amendment No. 2 to Agreement No. 2020-199
RECOMMENDATION:
Staff recommends approval of the two amendments.
BACKGROUND:
On October 21, 2020, City Council awarded two agreements to FFP BTM Solar, LLC (Forefront Power) to install and operate a photovoltaic and energy storage system at Wastewater Treatment Plant #3 , alongside other City owned properties.
Amendment No. 1 was executed on December 13, 2023, which extended the Construction Milestone Dates to June 30, 2025, to allow Forefront Power the necessary time to coordinate the proposed system design with PG&E through the interconnection process and the iterative redesign associated with it .
Amendment No. 1 also increased the ESA rate on the solar agreement by $0.0063 per kW/hr.
Upon completion of PG&E’s interconnection process, Forefront Power began the due diligence and design and engineering phase. During design and engineering, an unexpected, existing utility line was discovered to be in conflict with the proposed design and triggered a redesign of the system. The multiple redesigns have delayed the progress of both the photovoltaic system and energy storage system beyond the anticipated milestone dates set in Amendment No. 1 and have triggered a reassessment of the Energy Service Agreement (ESA) rates set for both the photovoltaic and energy storage system. To move forward with these projects, the new ESA rates will need to be increased and timelines extended. The increases are a result of increased labor, material, insurance, and operatio n and maintenance (O&M) costs since 2020, required redesigns from PG&E feedback, and required redesign related to an existing utility line in conflict.
Staff proposes to amend two agreements with Forefront Power to increase both ESA rates and modify the construction milestone dates at Wastewater Treatment Plant #3. A brief description of each proposed amendment is shown below:
Amendment No. 2 to Agreement No. 2020 -191 – There will be updates to the PPA rates and construction milestone dates. PPA rate adjusts from $0.0793 per kW/hr to $0.1089 per kW/hr. Amendment No. 2 to Agreement No. 2020 -199 – There will be updates to the Energy Storage System Size, ESA rates, and construction milestone dates. The Energy Storage System adjusts from 3,000 kW to 2,248.4 kW, and the ESA rate adjusts from $53.90 to $170.76.
Because these projects initiated in 2020, Forefront Power was able to lock in rebates and incentives for
the solar energy and energy storage system under several state and federal programs. Several of these incentives are no longer available or set to decline in the near future. It is imperative that the City proceed with the projects to maintain ESA rates that include these incentives. If the City were not to move forward with these projects and chose to install these systems at a later date, the ESA rates would be much higher than the adjusted rates proposed in Amendment No. 2 due to the lack of incentives available.
The adjusted ESA rates are slightly higher than at initial agreement award, but these rates are still expected to be lower and more stable than PG&E prices over the 20 -year term. These rates are a fixed, flat rate that helps the City budget accurately and hedge against future rate volatility.
Anticipated project completion at Wastewater Treatment Plant #3 is estimated to be January 2027.
FISCAL IMPACT:
Beginning this project in 2020 has given the City the opportunity to lock in a fixed, flat rate for lower cost solar energy before incentives disappear. This project has legacy status under the California NEM 2.0 Program. Because of this, if the project is completed by 2/14/2027, the project will save the Waste Water Plant 3 and our sewer enterprise fund, $11.8 million that would not be available in the future.
COUNCIL GOAL:
Reliable Infrastructure
ATTACHMENTS:
WTP3 2020-191.Amendment 2_PX
WTP3 2020-199.Storage_PPA.Amendment 2_PX