Gonzales Electric Authority
EXECUTIVEDIRECTOR’S OFFICE
STAFF REPORT
TO: Honorable President Rios and Board of Directors
DATE: June 6, 2022
FROM: René L. Mendez, Executive Director
SUBJECT: Microgrid Project Update
RECOMMENDATION
Staff recommends the Board of Directors receive the update on the status of the Microgrid Project.
BACKGROUND
On October 16, 2017, the City of Gonzales began work with ZeroCity LLC and its partner, OurEnergy, on the Gonzales Renewable Energy Project to study the feasibility and take steps to develop an electric power microgrid to serve the Microgrid Program Area. This work led to an action by the City Council on July 2, 2018 to approve in concept the Gonzales Renewable Energy Project, and authorize the City Manager to continue project development.
On August 20, 2018, the Gonzales City Council authorized the creation of 1) the Gonzales Municipal Electric Utility (GMEU) to provide power and heat for the City of Gonzales community, and 2) GEA for the purpose of operating and managing the City’s municipal electric enterprise system, and assisting GMEU in the development of cost-effective and efficient renewable energy opportunities. With this action, GEA/GMEU essentially assumed the responsibility to continue the development of the Gonzales Renewable Energy Project.
On December 2, 2019, your Board of Directors authorized the Executive Director to execute a Memorandum of Understanding (MOU) between GEA and Concentric Power Inc. (Concentric Power) to exclusively negotiate in good faith, to develop an electric microgrid to serve the Microgrid Program Area.
On September 8, 2020 the Board of Directors considered and approved the Energy Services Agreement (ESA) with Bodega Microgrid (Concentric Power). Since 2020, staff has diligently working with Concentric Power Inc. on all the required conditions precedent in the ESA. Unfortunately, the COVID-19 Pandemic slowed down the progress and the more recent Russia-Ukraine war has caused other unexpected challenges; the bottom line being that this project has taken a lot longer than anticipated.
AGENDA
ITEM
15 Project Benefits
As a reminder, the proposed Microgrid Project is expected to provide a range of benefits to the Gonzales Agricultural Industrial Business Park (GAIBP) and ultimately the Gonzales community, including:
• Local, clean, low-cost electric power that supports economic development in the Business Park and with it an expanding tax base and new jobs;
• Reliable electric power delivered 24/7, 365 days a year, with no PG&E “Public Safety Power Shutoffs;”
• Fast electric power hook-ups that avoid the long waits for PG&E grid improvements; • Potential for lower municipal development impact and service fees made possible with microgrid revenues; and
• Job and Economic Development.
Fortunately, while this project has taken a lot longer to develop than originally anticipated, the benefits are no less real today.
REVIEW & ANALYSIS
As mentioned above, the ESA has a lot of “condition precedent” sections that have steadily been worked on since early 2020. All these sections need to be agreed upon and approved by your Board in order for the microgrid to move to construction phase. In addition, because it has taken longer than anticipated and the world is a little bit different today than it was when this project was approved, there may be some adjustment to the ESA that will be brought forward for consideration.
The attached schedule is simply presented to inform your Board on the target dates for the upcoming actions over the next few months, for you to consider and approve many of the conditions precedent in the ESA.
ALTERNATIVES
This simply an informational item.
BUDGET IMPACT
There are no budget impacts per say as a result of this item. All the work underway is covered in the FY 2022-2023 City budget.
CONCLUSION
Staff recommends the Board of Directors receive the update on the status of the Microgrid Project.
Attachments:
1. Schedule