7/9/2024 Item 6
City Council
Item 6 - 20 MW Bloom PPA and
OF AWS Offtake Agreement
CITY RTC 24-475
1852 July 9, 2024
THE MISSION GIN
1 - SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Load Growth and Limitations
SILICON
• Two Multi-phased Activities (SVP and CAISO) VALLEY Fiscal Year • Additional Transmission Capacity - LS POWER POWER.
CITY OF SANTA CLARA 2021/2022
• In the interim there are limitations for load ramps for Residential Connection & Commercial Load Development Fee Analysis
major data center customers
- Near-term and mid-term timeframes
- Staff has discussed this item with the City Council as part of the SVP quarterly reports and directly with data center customers
- Some customers have expressed an interest in
adding more capacity beyond what SVP can currently
serve
2 POST MEETING MATERIAL
1 7/9/2024 Item 6
- SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Council Actions
October 13, 2020 - Master service agreements with July 18, 2023 - Updated City Council regarding several engineering consultant firms these key near-term projects April 6, 2021- Comprehensive review of upcoming October 10, 2023, Authorized the purchase of u load growth and capital projects to the City o 12 high voltage transformers - $81,392,90 • April 23, 2024 - updated connection fees an
• September 28, 2021, the City Council accepted oad development fees.
SVP's Three-Year System Growth Plan Strategy • May 7, 2024, Authorized the negotiation and April 5, 2022 - updated connection and load purchase of high voltage circuit breakers - development fees for SVP $38,000,000.
November 15, 2022 - City Council accepted SVP's • On May 28, 2024, the City Council authorized System Expansion Plan for the California the negotiation and purchase of high voltage Independent System Operator's Transmission disconnect switches, station service voltage Planning Process transformers, voltage transformers and May 9, 2023 - City's intent to issue tax-exempt capacitive voltage transformers, and combination revenue metering transformers -
electric system bonds
$17,400,000
SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Approved Transmission
CAISO 2021/22 Transmission Planning Process Process
6/01/20 Started work on updated load 1,142 MW's
11/3/30 Started discussion with CEC
12/17/20 Started meeting with PG&E regarding additional projects 1/25/21 CEC adopts new SVP load forecast
3/11/21 SVP comments on draft Study Plan
3/24/21 SVP presents to CAISO board
3/31/21 Final Study Plan Posted
8/3/21 CAISO posts preliminary reliability study results 9/15/21 P&E posts mitigation plans
9/27/21 Stakeholder meeting for comments on mitigation plans 1/31/22 Draft Transmission Plan posted
3/23/22 CAISO Approved Transmission Plan
4/1/22 Project Procurement Phase Starts
CAISO selected LS Power Grid High Voltage Direct 2021-2022 3/7/23 TRANSMISSION PLAN
Current Line from Newark 230kV to SVP's Northern
& Colfonia SO
Receiving Station Day 11,202
2028 Expected completion date
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7/9/2024 Item 6
SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Proactive Approach
• Discussed with Council exploring Creative ideas
• Over the last two years, SVP staff has encouraged
customers and power vendors to propose options
for in-City generation
• The team has had many meetings on a variety of
different possibilities
- Peaker power plants (both natural gas and
renewable gas), base load power plants, batteries,
and fuel cells.
• SVP had lengthy and detailed discussions
- None reached a formal proposal
- Except for the proposed Bloom Power Purchase
Agreement and AWS Offtake Agreement
5 SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Discussion
• Negotiate and Execute a 20 MW Power
Purchase Agreement (PPA) with Bloom
Energy to be used serve the load of Amazon
Web Services (AWS)
• Negotiate a separate Offtake Agreement with
AWS for the 20 MW
AWS Data Center
• Authorize the City Manager to Negotiate and
Execute up to an additional 80 MW of Power
Purchase Agreements for in-City generation
solutions and all needed agreements with
Customers.
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Item 6
7/9/2024
AWS Development
• AWS has a development project which will located at 2305 and 2315 Mission College Boulevard (MCB) 2305 2315
• The substation will have an operational nameplate capacity of 99 MVA at full buildout with four transformers. The
substation is being constructed with two transformers to serve 2315 MCB.
- Typically, Data Centers will use 55% of the nameplate capacity - Other capacity use limitations and subject to substation agreement available capacity limitations and ramp rates • AWS has an initial 9 MVA for its use at 2315 MCB
• The substation agreement has a ten-year load ramp which will get 2315
AWS to 32 MVA in 2034 at 2315 MCB
- No electric capacity to AWS for its use at 2305 MCB
• AWS wants to have additional capacity of 20 MVA for its use through the proposed in-City generation option.
SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Key Items for Agreements
PPA and Offtake Agreements
• The term is for 15 years.
•AWS will be required to pay the full cost of the 20MW (whether they use the full amount or not).
AWS will need to provide the City financial assurances to address City contractual risk for the full 15-year term
Cost and Rate Protection
• PPA will be up to 50% higher than the current rate for SVP industrial customers • AWS will be fully responsible for the total cost under Offtake Agreement • SVP will not enter into the Bloom PPA if AWS does not agree to pay the full cost - All costs associated with providing the power including infrastructure, maintenance and operations, gas, and state and federal compliance requirements (e.g., RPS compliance). - SVP costs for PPA management
- The 5% general fund transfer
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7/9/2024 Item 6
• SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Key Items for Agreements
Renewable Portfolio Standard
• Under the Offtake Agreement, AWS will be responsible for compliance cost obligations - Compliance with the RPS
- Submittal of Power Source Disclosure
- Compliance with regulations and requirements of the California Energy Commission (CEC), California Air Resources Board (CARB), and any other federal or state agency - Mitigation of any increased resource adequacy obligation • AWS will pay for procurement costs of Power Content Category (PCC) 1 bundled energy • In addition, per AWS "Amazon energy supply from utilities, combined with its renewable energy procurement across the United States, has enabled several AWS Regions including our AWS West (Northern California) Region to be attributable to 100% renewable energy." 9 • SILICON
VALLEY
POWER
CITY OF SANTA CLARA
Additional Items
• To date four other large customers have expressed interest for similar PPA's • Customers also have the option of behind the meter installations - Some customers prefer to enter into agreements with SVP - "support our utility partners, support AWS renewable energy goals, and build capacity that will support utility/AWS growth in our regions. Via this structure we will be better positioned to supply renewable energy RECs to support those corporate renewable energy goals through SVP, and support SVP meeting their RPS requirements."
• City positives with this type of proposal
- Environmental requirements are higher
- Financial benefit to the General Fund
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7/9/2024 Item 6
SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Additional Items
• Staff is requesting to negotiate both with Bloom, other similar vendors, and SVP customers for additional PPAs and separate Offtake Agreements - Up to an additional 80 MW
- No individual agreement will exceed 20 MW
• In addition to Bloom, any vendor can approach SVP at any point for a PPA proposal for consideration; provided that, it is in-City generation - At least one more vendor has recently approached the City • Assuming 20MW at 50% higher than the typical rate, the first-year cost of the agreements will be approximately $35 million, including SVP administration costs and the 5% General Fund Transfer (General Fund transfer estimated at $1.7 million a year).
11 • SILICON
OWE:
ITY OF SANTA CLAI
Recommendation
1. Authorize the City Manager or designee to negotiate and Execute a 20MW Power Purchase Agreement with Bloom or a Bloom affiliate for Amazon Web Services (AWS) and a separate Offtake Agreement with AWS, subject to the review and approval as to form of the City Attorney;
2. Authorize the City Manager or designee to Negotiate and Execute up to an additional 80 MW of Power Purchase Agreements for in-City generation solutions with energy suppliers and separate Offtake Agreements with other SVP customers (each individual PPA and Offtake Agreement cannot exceed 20MW), subject to the review and approval as to form of the City Attorney;
3. Authorize the City Manager or designee to execute all documents, agreements, and certificates as may be required under the terms of the agreement, subject to the review and approval as to form of the City Attorney, including, but not limited to, collateral assignment agreements, estoppel certificates, and performance security documentation, and take any and all actions as are necessary or advisable to implement and administer the agreements; and
4. Authorize the City Manager or designee to execute any amendments to the agreements so long as there is no change to their price or term length.
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7/9/2024 Item 6
City Council
Item 6 - 20 MW Bloom PPA and
10 AWS Offtake Agreement
CITY RTC 24-475
1852 July 9, 2024
THE MISSION CIT
13 7