CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
1/24/2022
1 SUBJECT:
Peninsula Clean Energy Solar Photovoltaic System with optional Battery Storage Municipal Facilities Procurement
RECOMMENDED ACTION:
Adopt a Resolution authorizing the City Manager to deploy a Solar Photovoltaic System (Solar PV System) with optional battery storage at the Pacifica Community Center in partnership with Peninsula Clean Energy should the City Manager determine there are cost effectiveness or other community benefits as determined by the City following participation in a collaborative procurement(s) led by Peninsula Clean Energy.
STAFF CONTACT:
Sam Bautista, DPW Deputy Director
(650) 738-3771
[email protected]
Lisa Petersen, DPW Director
(650) 738-3770
[email protected]
BACKGROUND/DISCUSSION:
At the January 10, 2022 City Council Study Session, the City Council provided the City Manager with direction regarding the City’s participation in Peninsula Clean Energy’s public facility solar and battery storage procurement process. 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.
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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 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 can meaningfully reduce electric bills. If included, the optional Battery can provide resilience benefits allowing the Pacifica Community Center to continue to operate on a limited basis during a power outage using electricity stored and generated onsite. Attachment “A” shows the proposed Solar PV System with Battery option.
The benefits of this project include:
• Peninsula Clean Energy has evaluated facilities with its engineering services partner and determined a feasible design for a Solar PV System;
• Peninsula Clean Energy performed an independent engineering assessment of the Community Center’s roof to confirm structural ability to support Solar PV equipment; • 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;
• Peninsula Clean Energy will execute all aspects of the procurement process; • Peninsula Clean Energy will administer the construction and maintenance of the Solar PV System;
• 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.
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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.
At the January 10, 2022 Study Session, several Councilmembers asked questions regarding the Solar PV System. The first question was regarding the age of the Community Center roof.
The Community Center roof was installed in 2008 and the life expectancy is 20-25 years.
There are 6-11 years left on the roof. Therefore, it is recommended that the Community Center roof be replaced prior to installation of a Solar PV System, depending on funding availability. It is estimated roof replacement would cost $215,000. Roof replacement in a future year after Solar PV System installation would cost approximately $45,000 more (est. $250,000), due to having to remove and reinstall the panels. If funding was not available for roof replacement before system installation, it is still feasible to replace the roof at a later date.
Another question asked was if the Solar PV System’s performance would degrade over time due to being close to the ocean. Solar PV Systems are maintenance free for the first 20-25 years. The inverters of the system last as long as the panels. The Pacifica Wastewater Treatment plant, which is in close proximity to the Pacific Ocean, has an array of PV panels which offsets the electrical usage by up to 18%. Staff found that there was no appreciable degradation of the panel equipment or electrical output due to ocean proximity based on visual assessment and review of performance following panel cleaning.
As the City Council is supportive of moving forward with the Solar PV System and Battery, the City Manager recommends adopting the attached resolution to pursue a PPA with PCE to participate in PCE’s public facility solar and storage procurement process.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
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 expected upfront cost to the City for the project. For a project with solar power but no battery, the Solar PV System is expected to provide cost savings. The savings are expected to grow over time due to avoided increases in utility costs which are expected to rise as much as 5% or more per year according to proposals by Pacific Gas & Electric at the California Public Utilities Commission.
A Battery Energy Storage Systems (Battery) may be included as an option in the procurement to provide added resilience benefits such as the ability to maintain an operational facility during an outage or emergency event. If a Battery is included, it may require city funding or result in a monthly cost above current energy bills. Peninsula Clean Energy, via a competitive solicitation, Pacifica City Council 4
January 24, 2022
will be seeking best pricing for applicable Battery systems and explore financial options with the City Manager. 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.
The Solar PV Systems would be financed through a Power Purchase Agreement (PPA) with Peninsula Clean Energy. With a PPA model, Peninsula Clean Energy will arrange for the installation, operations and maintenance of the Solar PV System, and the City would pay an agreed upon price per kilowatt-hour (kWh) for power generated throughout the system’s life.
The PPA will be provided “at cost” by Peninsula Clean Energy to cover equipment and installation. In addition, Peninsula Clean Energy will also retain a small $/kWh fee to cover its expenses and will be fully transparent with the City about all salient aspects of the project’s financials.
If Peninsula Clean Energy is unable to offer a PPA rate for the Solar PV System that will provide the City with net savings or other community benefits as determined by the City, then there would be no obligation to move forward.
Should the City Council go forward with the resolution, staff recommends that a budget request to replace the Community Center roof prior to the installation of a Solar PV System be included as part of the Capital Improvement Program for Fiscal Year 2022-23.
ORIGINATED BY:
Engineering
ATTACHMENT LIST:
Attachment "A" - Solar PV System and Battery Storage Option (DOCX) Pacifica City Council 5
January 24, 2022
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA AUTHORIZING
MUNICIPAL FACILITIES PROCUREMENT FOR SOLAR AND BATTERY STORAGE
SYSTEMS WITH PENINSULA CLEAN ENERGY
WHEREAS, the City Council of the City of Pacifica has demonstrated its commitment to a sustainable and resilient future through its policy goals and actions, including energy reduction, clean energy programs, and the expansion of local renewable power supply, and WHEREAS, on July 4, 2021 the City Council adopted the Climate Action Plan to take a leadership role and commit to reducing total community-wide emissions by 35 percent below 2005 levels by 2020, and 80 percent below 1990 levels by 2050; and WHEREAS, this procurement is consistent with the City’s Climate Action Plan, advancing the City’s goals to promote energy efficiency and renewable energy in government operations; encourage solar energy installation; and demonstrate environmental leadership, save money, and promote green jobs, comply with state environmental initiatives, and promote sustainable development; and
WHEREAS, a Community Choice Aggregation program is a mechanism by which local governments assume responsibility for providing electrical power for residential and commercial customers in their jurisdiction in partnership with local commercial energy purveyors and owners of transmission and distribution facilities, which in the case of San Mateo County is Pacific Gas & Electric Co.; and
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Pacifica that the City Manager is authorized to deploy Solar Photovoltaic Systems at municipal facilities, such as the Pacifica Community Center, in partnership with the City's public power provider, Peninsula Clean Energy through a standard Power Purchase Agreement with Peninsula Clean Energy, should the project result in financial and/or community benefits. The Council further authorizes the City Manager to explore an optional Battery Storage for the Pacifica Community Center and any other City facility in the future.
• • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 24th day of January 2022, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
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Mary Bier, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney