Municipal Services Committee
October 8, 2024

Pasadena Water and PowerAUTHORIZE THE CITY MANAGER TO ENTER INTO A POWER SALES AGREEMENT WITH SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY FOR RENEWABLE SOLAR ENERGY FOR AN AMOUNT NOT-TO-EXCEED $137,197,368 FOR THE WATER AND POWER DEPARTMENT Municipal Services CommitteeOctober 22, 2024Item 1 Pasadena Water and PowerGrace Orchard Solar Project•Grace Orchard Solar Facility Project>Photovoltaic Solar: 500 MW>Location: Blythe, California>Developer is NextEra Energy Resources (NEER) – one of the largest renewable energy developersContracting entity is Grace Orchard Solar III, LLC •Capacity Allocation>SCPPA’s Share: 170 MW>PWP’s Share: 50 MW>Other SCPPA Participating Members:Anaheim: 100 MWColton: 20 MW2 *Note: Above solar image is a generic solar project
Pasadena Water and PowerBenefits of GraceSupports the requirement of the 2018 Integrated Resource Plan (IRP) requirement that all new long-term energy shall be renewable/carbon-freeProvides replacement energy for the Intermountain Power Project (IPP) coal contract, which will terminate in 2027Supports the path to the “Carbon-Free by 2030” goal of Resolution 9977Supports the 2023 IRP, which identified solar as an important source of clean energyHelps meet Renewables Portfolio Standards (RPS) Portfolio Balance Requirements and Long-Term Requirements>Provides PCC-1 Renewable Energy Credits (RECs) and represents a contract that is 10 or more years in duration3 Pasadena Water and PowerContract Terms•Southern California Public Power Authority (SCPPA) Fixed Price Renewable Power Purchase Agreement (PPA) Term >Term length: 20 years>Expected Commercial Operation Date (COD): 12/1/2027>COD Deadline: 11/28/2028•Expected Energy (Annual): 144,540 MWh>Highest Quality (PCC1) of RECs•Price>Solar: $47.46/MWhNote: This price could decrease by up to $3.75 if underlying supply chain issues are resolved more cost effectively and confirmed through a third-party audit>Annual Cost: $6,859,868.40>Lifetime Contract Cost: $137,197,368•NextEra is currently undergoing internal approval for their side of the contract>If they fail to achieve all approvals by November 15, 2024, then an early termination clause will be trigged requiring NextEra to pay SCPPA a $10 million termination fee (PWP's share would be $2.94 million)4 Pasadena Water and PowerMarket Data
5 Nationwide Market-Averaged PPA Price Index for Solar in Q4 2023 is $52.69 Pasadena Water and PowerEstimated Electric System Average Rate Impact2027Grace Orchard Solar50 MW of SolarAll-in Cost Estimate of Energy, and RECs$47.46/MWhPrice in $/MWh$6,859,868.40Total Estimated Annual Cost1,129,427,702PWP Estimated Annual Sales (kWh) in first full year$0.0061$ Per kWh rate impact estimate0.61¢¢ per kWh rate impact estimate2.6%Estimate impact to electric system average rate (23.58¢ per kWh base)*Electric System Average Rate estimate includes PCA adjustments from the FY2025 Budget*Note: The estimated impact to the electric system average rate reflects the impact of theadditionalcost for the project. Other rate components, including expiring resources, have the potential to be highly variable and are not considered herein. Other components will be considered during the Electric Rate Study. 6 Pasadena Water and Power
84%76%83%13%11%2%5%4%4%0%20%40%60%80%100%120%Pasadena's Progress Towards 100% Carbon-Free Electricity by 2030(Forecast as of October 22, 2024) Executed
Grace
In-Progress
Forecasted Progress – Key Metrics102%91%89%
7METRIC #1Senate Bill 100100% Renewable and Zero-carbon by 2045METRIC #2Carbon-Free GenerationCarbon-Free % of Total Annual Energy PortfolioMETRIC #324/7 Hourly MatchingAverage Hourly Carbon-Free*Note Forecasted metrics presented are subject to change at anytime due to updated information Pasadena Water and PowerRecommendation•Find that the proposed action is exempt from the California Environmental Quality Act pursuant to State CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption); •Authorize the City Manager to enter into a contract with Southern California Public Power Authority for the purchase of renewable energy that includes daily delivery of a maximum of 50 megawatts from the Grace Orchard Solar Facility during a 20-year contract term beginning December 1, 2027, for a total amount not-to-exceed $137,197,368. Competitive price bidding is not required pursuant to City Charter Section 1002(H) (Contracts with other governmental entities), and competitive selection is not required pursuant to Pasadena Municipal Code Section 4.08.049(A)(3), contracts with other governmental entities; and•Authorize Pasadena Water and Power’s General Manager to execute documents pertaining to operational and administrative matters directly related to this contract.8