CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
1/10/2022
1 SUBJECT:
Solar Photovoltaic System with optional battery storage at Pacifica Community Center RECOMMENDED ACTION:
Receive a presentation regarding the deployment of a Solar Photovoltaic System (Solar PV System) with optional battery storage at Pacifica Community Center and provide direction to the City Manager on pursuing a Power Purchase Agreement with Peninsula Clean Energy for participation in Peninsula Clean Energy’s public facility solar and storage procurement process.
STAFF CONTACT:
Sam Bautista, DPW Deputy Director
(650) 738-3771
[email protected]
Lisa Petersen, DPW Director
(650) 738-3770
[email protected]
BACKGROUND/DISCUSSION:
Peninsula Clean Energy (PCE) has collaborated with its Joint Power Authority (JPA) members, including the City of Pacifica, to identify candidate critical facilities and develop Solar PV System designs for these sites. At its expense, PCE engaged an established independent engineering firm via competitive solicitation and, working with City staff, determined the feasibility of a Solar PV System for the Pacifica Community Center. In addition, PCE’s structural engineering consultant has analyzed the existing roof and has determined it would be able to carry the additional load of the PV system.
PCE is piloting a new aggregate procurement model for public facilities to help reduce the costs and complexities for its public partners. PCE will manage the procurement process, financing, installation, operations, and maintenance with no upfront cost to the City. The process is intended to repeat with subsequent procurement rounds, and the City may add additional facilities in subsequent rounds.
A Battery Energy Storage System (Battery) will be included as an option in the procurement to provide added resilience benefits such as the ability to maintain an operational facility during a power outage or emergency event. If a Battery is included, it may require City funding or result in a monthly cost above the current energy bills. PCE, via a competitive solicitation, will be seeking best pricing for applicable Battery systems and explore financial options with the City.
There is no requirement to include the Battery, but if no Battery is installed, the Solar PV Systems will be designed as “battery ready” to allow for a streamlined future addition of a Battery.
PCE will offer a long-term Power Purchase Agreement (PPA) to the City for a specified price per kilowatt- hour (kWh) that is lower than the current and future price per kWh the City would Pacifica City Council 2
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pay for that same energy from the utility. The PPA will be provided “at cost” by PCE to cover equipment and installation. In addition, PCE will retain a small fee per kWh to cover its expenses, while maintaining full transparency with the City about all salient aspects of the project’s financials. If PCE is unable to offer a PPA rate for the Solar PV System that provides the City with net savings or other community benefits as determined by the City, the City would be under no obligation to move forward with the project.
PCE cannot provide a specific PPA price until it knows equipment costs, which will be determined via competitive solicitation. However, to make the RFP as competitive as possible, Bidders need to know that there is a firm commitment from participating facility owners to move forward if they can provide pricing that results in net savings.
ANALYSIS
Solar PV Systems provide carbon-free renewable electricity to buildings and reduce electric bills. If included, the Battery can provide resilience benefits allowing the Pacifica Community Center to continue to operate on a limited basis during a power outage using electricity generated and stored onsite.
The benefits of this project include:
• The City will obtain financial and environmental benefits of a Solar PV System with no upfront costs and without incurring the staff time, cost, and complexity of conducting its own solicitation for design and structural assessment, hiring, and managing consultants, and overseeing construction and maintenance;
• The City will create local, renewable energy to advance its sustainability goals; • The City will receive enhanced energy resiliency if a Battery is deployed; and • The City will hedge against rising utility rates, which over the course of a 20+ year system life is expected to be significant.
The California Public Utilities Commission (CPUC) is currently engaged in rulemaking for changes to the Net Energy Metering (NEM) tariffs governing solar PV resources. It is expected that the next iteration of NEM (NEM 3) will be less advantageous for solar and may negatively affect project economics. In the past, projects that had reached a defined stage were grandfathered in under the existing tariff at the time. It is expected this might apply to the latest NEM revision as well. As such, it is important to deploy projects as soon as possible. IF NEM 3 is enacted prior to the deployment of Solar PV Systems from this procurement and would prevent PCE from offering a PPA at net benefits to the City, PCE would have the right to terminate this pilot program at no cost or obligation to the City.
This project is consistent with the City’s Climate Action Plan, advancing the City’s goals to:
• Promote energy efficiency and renewable energy in government operations; and • Encourage solar energy installation; and
• Demonstrate environmental leadership, save money, and promote green jobs, comply with state environmental initiatives, and promote sustainable development.
If the City Council is supportive of moving forward with the Solar PV System and Battery, the City Manager seeks City Council direction to pursue a PPA with PCE for participation in PCE’s public facility solar and storage procurement process and bring any resolutions of intent to participate and/or agreements to a future City Council meeting for approval.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
Pacifica City Council 3
January 10, 2022
The installation of a Solar PV System is consistent with the following Council adopted Goals:
• Stewardship of City Infrastructure: includes repairing/replacing outdated city facilities such as city hall, the libraries, fire stations, etc., improving streets, and responding to impacts of sea level rise. Installation of a Solar PV System would promote energy efficiency and environmental sustainability. • Environmental Sustainability: includes mapping out parks and open space, preserving hillsides and beaches, paying attention to flora and fauna needs, environmental health, and climate adaptation. This project is consistent with the City’s Climate Action Plan.
FISCAL IMPACT:
There is no cost to the City to participate in the procurement process. The Solar PV System is expected to provide modest cost savings initially, which are expected to grow over time due to avoided increases in utility costs. If Battery storage is included, it may require City funding or result in a monthly cost. Staff would return to the City Council for approval of Battery funding, if needed.
ORIGINATED BY:
Engineering
ATTACHMENT LIST: