CITY OF POMONA
COUNCIL REPORT
August 7, 2023
To: Honorable Mayor and Members of the City Council
From: James W. Makshanoff, City Manager
Submitted By: Chris Diggs, Water Resources Director
SUBJECT: APPROVAL TO EXECUTE AGREEMENTS RELATED TO POMONA CHOICE ENERGY SOLAR AND BATTERY RESIDENTIAL PROGRAM RECOMMENDATION:
It is recommended that the City Council take the following action:
Approve an agreement with Participate Energy for the Pomona Choice Energy Solar and Battery Residential Program; and Authorize the City Manager, or his designees, to execute all contracts and make any non-substantive changes, related to the Pomona Power Choice Solar and Battery Residential Program, pending City Attorney review.
EXECUTIVE SUMMARY:
Executing the agreements between the City of Pomona and Participate Energy, LLC (Attachment No. 1 through Attachment No. 4) will allow for behind the meter solar plus storage by pairing of a Tesla Powerwall home energy storage with residential rooftop solar.
FISCAL IMPACT:
As part of the program, the City will be paid a fee during the construction phase of $0.40 per watt developed. Additionally, the City will also receive $0.02 per kilowatt-hour (kWh) generated and $15.00 per month for each Powerwall battery installed over the life of the program. At full buildout, the program could generate as much as $20 million over a 30 years period and save high-use Pomona Choice Energy (PCE) customers nearly $5 million over the same term.
This program may not be a financially beneficially to all customers due to their power usage. Table 1 below is a breakdown by percent of customers who would financially benefit from the program based on power usage, and based on the usages presented customers can determine if the program may be of benefit to them.
Table 1
User Class
kWh Range
No. Customers
% of Eligible Customers
Average and below
569 and under
15,146
72%
Break Even
Up to 799
3,595
17%
Above Average
800-1,499
2,156
10%
High Use
Above 1,500
178
1%
Total Non-Care Residential Customers
21,075
PREVIOUS RELATED ACTION:
None.
DISCUSSION:
Some of the goals for the establishment of PCE was to provide Pomona residents options as to whom they wanted to provide them power, and to provide power at a reduced cost as compared to Southern California Edison (SCE). At the current time, PCE is providing a 5 percent discount, which is greater than originally anticipated. A second goal was to provide power in the most environmentally friendly way possible and to reduce the City’s carbon footprint. One way to help achieve this goal is to offer customers the opportunity to purchase green energy, in place of the standard energy product.
To further enhance this second goal, there is the opportunity for the City to collaborate with Participate Energy for the construction and financing of both solar panels and a Tesla home battery system (Powerwall) (Attachment No. 1, Attachment A of Agreement). This program was developed by CalChoice member Lancaster Energy, Participate Energy and was successfully launched in the City of Lancaster, in October of 2022. The Framework Agreement related to the program provides details on the structure of the agreement between the City and Participate Energy. Additionally, Tesla will be working for Participate Energy and will be the customer’s point of contact for all the project details.
PROGRAM DETAILS
PCE customers choosing to participate in the program will order their system from Tesla, who will in turn design, permit, install and maintain the solar panels and batteries. Participate Energy will finance the program and own the solar panels and battery systems. The City will assist with marketing the program to PCE customers.
Through a Power Purchase Agreement (PPA) with Participate Energy, PCE will purchase the energy generated from each system and resell that energy to the customer, and if excess energy is generated, sell it to other PCE customers. Benefits to the participating customer are derived from receiving power at a reduced rate, that being $0.145 per kWh with a 1.9% annual escalator, in addition to not having to pay SCE for distribution charges for the power generated onsite.
Benefits to the City come in two forms. First, a $0.40 per watt up-front fee for each system installed, equating to approximately $3,400 per system. The City will also receive a program support service fee of $0.02 per kWh generated and $15.00 per month for each Powerwall installed.
Customers who are interested in participating in the program will find program information on PCE’s website and will add basic home information to a fillable form on the site. Once the form is completed, information will be sent directly to Tesla, who will then follow up with the customer. Tesla will also enable ordering direct from the Tesla.com website. Tesla will be responsible for designing the system to meet the homeowners needs, all installation related work, including permitting systems through the City.
Program participants will enjoy a host of benefits, including easy access to solar financing and installation, comprehensive integration with their existing CCA service, access to backup power in the event of an emergency or power outages, and of course the noted savings to monthly power bills. One of the unique benefits of this structure is that all residents qualify and there is no credit check necessary benefitting those not only with the best credit scores. In addition, a significant portion of their expenditures will remain local and be reinvested in our community.
Based on the benefits provided it is recommends that the City Council grant to the City Manager the authority to execute all necessary contracts, and with the approval of the City Attorney, make any non-substantive changes, related to the Pomona Power Choice Solar and Battery Residential Program.
Finally, as each installation has a contract term of 30 years, and is initiated at the request of the customer, the term of the contract between the Participate Energy and the City of Pomona will be from date of execution of the attached agreement, and shall remain in effect until the last Participate Energy/Customer agreement expires.
Prepared by:
Julie Carver, Environmental Compliance Supervisor
ATTACHMENTS:
Attachment No. 1 – Framework Program Agreement
Attachment No. 2 – Master Power Purchase Agreement
Attachment No. 3 – Program Management Agreement
Attachment No. 4 – Program Support Service Fee Agreement Attachment No. 5 – Pomona Power Choice Solar and Battery Program information Pomona Choice Energy Solar and Battery Residential Program