STAFF REPORT
City of Lancaster
CC 9
3/12/2024
JC
Date: March 12, 2024
To: Mayor Parris and City Council Members
From: Alexus Merino, Assistant Director
Subject: Clean Hydrogen Purchase Agreement Non-Binding Term Sheet – ReCarbon, Inc.
Recommendation:
It is recommended that the City Council:
1. Approve a Purchase Agreement Non-Binding Term Sheet with ReCarbon, Inc. for a maximum contract amount of $438,000. Authorize the City Manager, or his designee, to execute and sign all documents; and
2. Find that this item is not a project pursuant to the California Environmental Quality Act.
Fiscal Impact:
The agreement anticipates the purchase of clean hydrogen ranging from 50kg to 100kg per day, at a price of $12/kg. This volume and pricing structure provides a clear basis for calculating the annual financial outlay for this clean energy source. The minimum volume cost would be $219,000 and the maximum volume cost would be $438,000. Sufficient funds of $438,000 are available in account number 50191700.5710.
Background:
In 2020, the City of Lancaster announced its intention to become the first renewable Hydrogen City. Lancaster is working with several organizations to increase the production and use of renewable hydrogen and other sources of clean energy. The City Manager’s Office is requesting to enter into a Non-Binding Term Purchase Agreement and determine ReCarbon, Inc. as a Sole Source vendor. ReCarbon, Inc. is the only consultant utilizing their proprietary and patented models and tools to produce hydrogen.
They are also contracted with the Los Angeles County Sanitation District (LACSD) to construct and operate a clean hydrogen pilot plant to demonstrate the efficacy and efficiency of producing greenhouse gases using their patented and proprietary products. If the pilot plant demonstration is deemed successful, both parties agree to discuss a subsequent long-term offtake agreement to be outlined in a separate agreement, which will be negotiated and executed by both Parties as 1 5
6 1
required.
ReCarbon, Inc. transforms carbon dioxide (CO₂) and methane (CH₄) into clean energy by utilizing their very own Plasma Carbon Conversion Unit (PCCU), or greenhouse gas processing system, to produce Hydrogen over 50% lower than the theoretical minimum of electrolysis (Electrolyzers) and over 20% lower and 80% cheaper than the industry standard SMR hydrogen production energy method.
ReCarbon, Inc. is a climate technology and professional services business headquartered in Fremont, CA. They hold an unassailable lead over other technologies. Their revolutionary innovation is not a lab concept, but a real-world, commercial technology being deployed globally. ReCarbon, Inc. is transforming carbon emissions to clean energy and creating local and revenue-producing solutions.
Attachment:
Non-Binding Purchase Agreement
Sole Source Memo