1 STAFF REPORT
DATE: July 12, 2022
TO: Justin Hess, City Manager
FROM: Dawn Roth Lindell, General Manager, Burbank Water and Power VIA: Jeannine Edwards, Assistant General Manager, Sustainability, Marketing and Strategy
BY: Drew Kidd, Acting Marketing Associate
SUBJECT: Request to Proceed with Work on a Proposal to Install New Electric Vehicle Chargers at the City-Owned Parking Structure (133 E. Orange Grove Avenue)
RECOMMENDATION
1) Direct staff to continue conducting due diligence and commence negotiations for a joint project between the City of Burbank and Tesla to install electric vehicle (EV) charging stations at the 133 E. Orange Grove Avenue parking structure. Burbank Water and Power (BWP) would install non-proprietary DC fast charging and level 2 charging stations, and Tesla would gain access to the structure to install proprietary Tesla supercharger stations in exchange for Tesla investing in necessary electrical charging infrastructure, site improvements, and contributing to ongoing revenue to support the city’s public parking facilities: and 2) Return to City Council in closed session to discuss the real estate negotiations.
BACKGROUND
Tesla has approached the city requesting that BWP work with them to install Tesla chargers on city-owned property. Tesla would pay for the installation of the chargers along with some improvements at the selected site(s).
The transportation sector is the largest source of greenhouse gas (GHG) emissions in California.1 The City of Burbank is pursuing a coordinated citywide effort to encourage residents, visitors, and businesses to adopt plug-in electric vehicles (EVs). The proposed project to install city-owned and Tesla EV charging equipment at the 133 E. Orange Grove 1 California Energy Commission. “Transforming Transportation.” https://www.energy.ca.gov/about/core- responsibility-fact-sheets/transforming-transportation. Accessed 15 May 2022.
2 Avenue parking structure (OGPS) will help with GHG reduction efforts, provide charging standards accessible to all passenger EVs, support local EV drivers and regional transportation, drive economic development, and revitalize an important city asset. The City of Burbank’s 2022 Greenhouse Gas Reduction Plan (GGRP) is the city’s roadmap for reducing its greenhouse gas emissions. The city aims to reduce its emissions by 40% below 1990 levels by 2030 and achieve carbon neutrality by 2045.2Measure T-3.1 of the GGRP update is to “increase zero-emission vehicle adoption to 23% of all passenger vehicles by 2030 and 100% by 2045” and supporting action T-3.1f is to “investigate opportunities to help fund additional EV charging infrastructure by leveraging public/private partnerships and ensuring the city is charging for EV infrastructure use at city-owned facilities.” The proposed project aligns with this supporting action, supports the city’s GHG reduction objectives, and meets BWP’s goal of facilitating the installation of EV charging ports via rebates, service planning, and direct installation and operation. Currently, there are two public electric vehicle charging types typically available to EV drivers. The first is level 2 charging stations, which can charge 80% of an EV’s battery in 4-6 hours. Level 2 stations are those often used in residential settings. BWP currently operates 71 public level 2 ports; these stations are usable by Tesla vehicles and all other EVs. The second is direct current fast chargers (DCFC), which can typically charge 80% of an EV’s battery in 15-30 minutes. Standard DCFCs are non-proprietary and usable by all fast-charging capable EVs. BWP currently operates 2 standard DCFCs, and there are 14 privately operated, publicly available standard DCFCs in Burbank. Fast charging has high demand, but the availability of DCFCs is limited throughout California. At this time, Tesla operates a proprietary network of “superchargers” that are DCFCs, but may only be utilized by Tesla EVs. The 20 Tesla superchargers are in operation at the Burbank Town Center. With the increasing demand and popularity of EVs, large investments by car manufacturers to bring new electric vehicles to the market, and state mandates requiring higher sales of zero-emission vehicles in the near future, there is a high demand to expand Burbank’s charging infrastructure. Tesla is leading the fast-charging EV market, with 75% of the market share of battery-only EVs in the state of California.3Twenty Tesla-branded superchargers were installed in Burbank in 2017 at the Burbank Town Center. The table below shows that the existing site in Burbank is heavily utilized, with usage as high as 12,800 sessions per month, or more than 20 sessions per charger per day. Tesla anticipates the need for 108 more supercharger stations in Burbank by 2024 to meet its drivers’ demands for charging.4 2 City of Burbank Greenhouse Gas Reduction Plan Update – Public Review Draft. March 9, 2022. 3 Forbes. “Musk Left California But It Still Loves Tesla: Brand Has 75% Share Of State’s EV Market.” January 30, 2022. https://www.forbes.com/sites/alanohnsman/2022/01/30/musk-left-california-but-it-still-loves-tesla-brand-has-75-share-of-states-ev-market/?sh=142c9bdd2db5. Accessed 17 May 2022. 4 From data provided to BWP by Tesla on 4/22/2022. 3 City Open DateNumber of ChargersTotal SessionsSessions in Peak MonthBurbankSeptember 2017 20 262,000 12,800GlendaleMarch 2018 20 184,000 8,500PasadenaNovember 2019 24 67,000 10,000While Tesla has the majority of the market share, it is critical to ensure that the city is supporting drivers of all makes of EVs, particularly as non-Tesla EVs are not currently compatible with Tesla chargers. The number of non-Tesla EVs on the road is increasing, and as more automakers develop and release new EV models, the non-Tesla market share could increase as well. The graphic below shows that Tesla vehicles make about 79,000 trips through Burbank on the I-5 freeway each month, or roughly 2,600 trips per day. It is reasonable to assume that a proportional number of non-Tesla chargers are on the Burbank section of the I-5 freeway and that their increased presence will generate higher demand for non-proprietary DCFC stations along that corridor.The placement of standard DCFCs in the OGPS to be used by any EV along with Tesla supercharging stations near Burbank businesses should help support economic growth and recovery. Tesla recently surveyed its drivers and found that 70% of them say they visit a store more often because of the proximity of a supercharger and 14% said theyhad never visited the store prior to the installation of the supercharger. DISCUSSIONCity staff and representatives from Tesla have discussed opportunities for a partnership in Downtown Burbank for several months. After a thorough preliminary due diligenceprocess, staff determined that the OGPS would be the optimal location for the proposed project based on several factors: proximity to the I-5 freeway, multi-unit dwellings (MUDs), city facilities, and businesses, location within a disadvantaged community (DAC), and condition of the facility. 133 E. Orange Grove Ave. Parking Structure (OGPS)The OGPS is a 490-space, five-story public parking structure in Downtown Burbank near the intersection of Orange Grove Avenue and First Street. The structure’s proximity to the
4 I-5 freeway makes it an ideal location to support EV drivers traveling to and through the City of Burbank while supporting economic recovery and growth of Burbank businesses. The parking structure is located near multi-unit dwellings (MUD) whose residents normally face greater challenges with the installation of EV chargers. OGPS is also near city facilities and thus can support the city fleet and employees driving EVs. Additionally, the OGPS is located within a DAC, which is an area defined by the California Environmental Protection Agency as disadvantaged due to a combination of environmental and income factors. Charging stations installed in a DAC will not only bring needed charging stations to residents in the area, but also help Burbank meet regulatory requirements for spending low-carbon fuel standard proceeds in DACs and will make the proposed project eligible for grant opportunities. In addition, the structure is an aging city-owned facility that can benefit from the revitalization this project would provide. The proposed charging project will be installed in parking levels 3-5 of the OGPS, with floor 5 being the roof. Up to 50 parking spaces will be used in the proposed project. These spots are not assigned to any tenants and are considered non-prime parking spots. While the structure is often at capacity on weekends, 85% of those who park in the OGPS on weekends have a dwell time of under two hours, within the time staff expects users to patronize the proposed chargers. The proposed EV charging spaces were strategically selected at this location to avoid monopolizing prime parking spaces on the lower floors of the structure, which are predominantly utilized by patrons of the nearby businesses. If this structure was built under modern building code, the structure would be required to have make-ready infrastructure for 49 EV-capable parking spaces. This project would modernize the OGPS. Under the proposed project, Tesla would install and operate about 20 Tesla superchargers at its expense. BWP would install, own, and operate twelve DCFCs and eight level 2 charging ports, totaling an additional 20 that can be used by all types of electric vehicles. The proposed design meets the power requirements of the site and project details are contingent upon negotiations with Tesla. BWP’s ability to install this equipment as currently proposed is contingent upon the investment in infrastructure by Tesla. Preliminary Discussions As staff indicated, Tesla approached BWP asking if the city would be willing to partner to locate a combination of Tesla superchargers and BWP DCFCs on a city-owned parking lot or structure. As part of the staff’s preliminary discussions with Tesla, the two parties discussed the potential high-level responsibilities of each entity. The topics included in the following paragraphs could become the framework for a potential partnership between the city and Tesla should the City Council approve staff moving forward with specific negotiations. As initially presented to city staff, Tesla would like to install its superchargers, along with related electrical equipment, in the OGPS within some of the structure’s public parking spaces. As part of this, Tesla would be responsible for all costs related to equipment procurement, installation, maintenance, and electricity use associated with the Tesla charging stations. Tesla would be responsible for installing the utility-side electric 5 infrastructure that would be utilized by the Tesla superchargers and would also be used by regular DCFC chargers installed by BWP. The needed infrastructure for both chargers is estimated to cost approximately $500,000 and would be paid for by Tesla. BWP and Tesla would share some remaining utility costs needed for both types of chargers, which is estimated to be an additional $500,000. The Tesla charging stations would be separately metered, and Tesla would be responsible for buying the electricity from BWP that it provides to its customers at BWP’s normal electricity rates. BWP would receive revenue from electricity sales to Tesla and non-Tesla vehicles—estimated at more than $1 million per year. The project will also increase BWP’s low carbon fuel standard (LCFS) credit accrual. The OGPS is over 30 years old and an aging asset, and staff would seek to improve the overall condition of the structure through the partnership with Tesla. These improvements could be financed through direct investment by Tesla as well as through Tesla “renting” the spaces from the city that it will occupy for its superchargers. This proposed partnership provides an opportunity to increase the OGPS’s value to the City of Burbank as an EV charging plaza, update and revitalize the parking structure, and provide a new revenue stream to the city’s parking authority which owns most of the public parking facilities in Downtown Burbank. As part of this project, staff aim to add additional wayfinding for parking and to aesthetically improve the structure. This could include painting, improved lighting, enhanced maintenance, and other needed and ongoing improvements. FISCAL IMPACTTotal costs for BWP for the proposed project will be determined as the design of the project and an agreement with Tesla are finalized. Currently, the costs for BWP are estimated to be $900,000. This is budgeted in the fiscal year 2022-2023 budget under 496-PS44L-62170-0000-000000-90900, which is the BWP and city facilities workplace and public charging budget which has a total amount of $1,250,000. CONCLUSIONStaff recommends the City Council direct staff to continue to conduct due diligence and commence negotiations on a project to install EV charging stations at the 133 E. Orange Grove parking structure and to return to City Council in closed session to discuss real estate negotiations for these reasons: Assisting with GHG reduction efforts BWP’s goal of facilitating the installation of EV charging ports Helps Burbank meet regulatory requirements for spending low carbon fuel standard proceeds in disadvantaged communities Adding revenue to BWP through electric sales estimated at more than $1 million per year Provides much-needed funding for the transportation division Helps Burbank meet regulatory requirements for spending low-carbon fuel standard proceeds in DACs Offsets maintenance cost for the Orange Avenue parking structure 6 Helps to rehabilitate and repair the Orange Avenue parking structure Allows BWP to leverage Tesla funding for the project, which would not be financially feasible if BWP had to do it on its own ATTACHMENTSNone.