City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-694 Agenda Date: 8/20/2024
REPORT TO STADIUM AUTHORITY BOARD
SUBJECT
Action on Stadium Authority Bills and Claims for the Month of June 2024
BOARD PILLARS
Enhance Community Engagement and Transparency
Ensure Compliance with Measure J and Manage Levi’s Stadium
BACKGROUND
Disbursements made by the Stadium Authority are based on invoices submitted for payment. Prior to payment, staff reviews all disbursement documents to ensure that the invoiced goods or services have been provided.
The Bills and Claims listing represents the cash disbursements required of normal and usual operations during June 2024. Budget control is set by the Stadium Authority Board through the budget adoption process.
DISCUSSION
At its March 12, 2024 meeting, the Stadium Authority Board adopted the Santa Clara Stadium Authority Fiscal Year 2024-25 Operating, Debt Service, and Capital Budget which runs from April 1, 2024 to March 31, 2025. Significant expenditures (greater than $5,000) paid in June 2024 include:
· Payments totaling $2,304,426.26 to the City of Santa Clara for the following:
o $291,911.74 for reimbursement of General and Administrative (G&A) City payroll costs (e.g., Executive Director’s Office (City Manager’s Office), Counsel’s Office (City Attorney’s Office), and Treasurer’s Office (Finance Department)) o $7,099.08 for reimbursement for Special Liability Claims related to Levi’s Stadium o $1,000,000.00 for Capital Expense (CapEx) Project - Street Signage o $1,000,000.00 for FY2024-25 Ground Lease Rent (Year 11) o $953.54 for reimbursement for G&A Costs
o $4,461.90 for reimbursement for CapEx Costs (Various Projects) · Payment totaling $832,094.87 to Forty Niners SC Stadium Co, LLC for Community Facilities District Advance Payment - Principal & Interest
· Payment totaling $1,432,204.52 to Forty Niners Stadium Management Company, LLC for June 2024 Stadium Manager Expenses, inclusive of Shared Stadium Expenses · Payment totaling $19,122.22 to Devcon Construction, Inc. for CapEx Project - Aesthetic Improvements - Premium Areas / Special Event Spaces
· Payment totaling $89,980.20 to Giant Construction, Inc. for CapEx Project - Women's Locker Room
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· Payments totaling $9,697.16 to Guidepost Solutions LLC for Public Safety Consulting Services (January - March 2024)
· Payments totaling $10,216.18 to InTWO, Inc. for Financial Management System Monthly Services (April - May 2024)
· Payments totaling $313,110.00 to Populous Group for various CapEx Projects · Payment totaling $36,451.84 to Presidio Networked Solutions Group, LLC for CapEx Project - Replacement of End of Life Network Equipment
· Payments totaling $65,937.70 for Legal Services (April - May 2024) Names of law firms have been redacted from the Bills and Claims report. The Supreme Court of California in Los Angeles County Board of Supervisors v. Superior Court, (2016) 2 Cal.5th 282, held that invoices specifying the amounts billed by a law firm to a client fall within the scope of attorney- client privilege while the matters are active. In accordance with the Supreme Court’s ruling, the names of law firms retained by the Stadium Authority, and the specific amounts billed by each, have been redacted from the public report to maintain the confidentiality of billing records for specific legal services. The aggregate amount spent on legal services in the subject time period has been provided.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
FISCAL IMPACT
The fiscal impact to the Stadium Authority is $5,121,130.06.
COORDINATION
This report has been coordinated with the Executive Director and Stadium Authority Counsel’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.
RECOMMENDATION
Approve the list of Stadium Authority Bills and Claims for June 2024.
Reviewed by: Kenn Lee, Treasurer
Approved by: Jovan D. Grogan, Executive Director
ATTACHMENTS
1. June 2024 SCSA Bills and Claims
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Payment Date Vendor Invoice No. Description Fund Amount 6/7/2024 City of Santa Clara N/A B2409 SCSA Admin Payroll Costs Operating 81,356.07$ 6/7/2024 City of Santa Clara N/A B2410 SCSA Admin Payroll Costs Operating 104,255.22 6/14/2024 City of Santa Clara 95518 Reimburse City of Santa Clara for Special Liability Claims related to Levi's Stadium Operating 7,099.08 6/14/2024 City of Santa Clara 95512 CapEx Project - Street Signage CapEx 1,000,000.00 6/26/2024 City of Santa Clara 95537 FY2024-25 Ground Lease Rent (Year 11) Operating 1,000,000.00 6/28/2024 City of Santa Clara N/A B2411 SCSA Admin Payroll Costs Operating 106,300.45 6/28/2024 City of Santa Clara N/A Reimburse City of Santa Clara for G&A Costs Operating 953.54 6/28/2024 City of Santa Clara N/A Reimburse City of Santa Clara for CapEx Costs (CapEx Project - D7 Tactical Decon Spray) CapEx 523.74 6/28/2024 City of Santa Clara N/A Reimburse City of Santa Clara for CapEx Costs (CapEx Project - EOL End User Equipment) CapEx 2,124.36 6/28/2024 City of Santa Clara N/A Reimburse City of Santa Clara for CapEx Costs (CapEx Project - RAID 8 Multi Agent Detection Kit) CapEx 1,813.80 2,304,426.26$
6/18/2024 Forty Niners SC Stadium Co, LLC N/A CFD Advance Payment - Principal & Interest Debt Service 832,094.87 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Security Operating 133,473.00 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Stadium Ops Operating 281,995.00 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Engineering Operating 327,933.00 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Guest Services Operating 51,714.00 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Groundskeeping Operating 26,374.00 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - SBL Sales & Service Operating 203,97 0.46 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Insurance Operating 94,078.51 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Utilities Operating 247,980.35 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - StadCo Tenant Improvements Operating 2,371.45 6/3/2024 Forty Niners Stadium Management Co, LLC SLS-25435 June 2024 Stadium Manager Expenses - Other G&A Operating 62,314.75 1,432,204.52
6/14/2024 Cupertino Electric, Inc. 102694 CapEx 4,289.11 6/3/2024 Devcon Construction, Inc. 90385R CapEx Project - Aesthetic Improvements - Premium Areas / Special Event Spaces CapEx 19,122.22 6/3/2024 Giant Construction, Inc. Application 2 CapEx Project - Women's Locker Room CapEx 89,980.20 6/7/2024 Guidepost Solutions LLC 64561 Public Safety Consulting Services (January 2024) Operating 8,959.67 6/28/2024 Guidepost Solutions LLC 65093 Public Safety Consulting Services (February 2024) Operating 624.05 6/28/2024 Guidepost Solutions LLC 65355 Public Safety Consulting Services (March 2024) Operating 113.44 9,697.16
6/7/2024 InTWO, Inc. 39392 Financial Management System Monthly Services (April 2024) Operating 350.52 6/7/2024 InTWO, Inc. 39393 Financial Management System Monthly Services (April 2024) Operating 4,757.57 6/14/2024 InTWO, Inc. 39919 Financial Management System Monthly Services (May 2024) Operating 350.52 6/14/2024 InTWO, Inc. 39920 Financial Management System Monthly Services (May 2024) Operating 4,757.57 10,216.18
6/3/2024 M. Arthur Gensler, Jr. & Associates, Inc. 1121665 CapEx Project - Security General Allowance CapEx 1,500.00 6/28/2024 M. Arthur Gensler, Jr. & Associates, Inc. 1126101 CapEx Project - Security General Allowance CapEx 2,100.00 3,600.00
6/14/2024 Populous Group, LLC 0077682 CapEx Project - Lighting System - Field / Sport Lighting LED Retrofit CapEx 167,300.00 CapEx Project - Distribution - High Voltage (12KV Electrical Power Study, Assessment and Replacement at Primary Switch Gear at Quadrant Substations)
Santa Clara Stadium Authority
Bills and Claims
Expenses Paid by Wire or ACH Transfer
For the Month of June 2024
Payment Date Vendor Invoice No. Description Fund Amount Santa Clara Stadium Authority
Bills and Claims
Expenses Paid by Wire or ACH Transfer
For the Month of June 2024
6/28/2024 Populous Group, LLC 0078028 CapEx Project - Main Kitchen Equipment CapEx 60,310.00 6/28/2024 Populous Group, LLC 0078049 CapEx Project - Lighting System - Field / Sport Lighting LED Retrofit CapEx 85,500.00 313,110.00
6/3/2024 Presidio Networked Solutions Group, LLC 6013224003447 CapEx Project - Replacement of End of Life Network Equipment CapEx 22,701.84 6/3/2024 Presidio Networked Solutions Group, LLC 6013224003451 CapEx Project - Replacement of End of Life Network Equipment CapEx 5,859.69 6/3/2024 Presidio Networked Solutions Group, LLC 6013224003774 CapEx Project - Replacement of End of Life Network Equipment CapEx 281.47 6/3/2024 Presidio Networked Solutions Group, LLC 6013224004090 CapEx Project - Replacement of End of Life Network Equipment CapEx 7,608.84 36,451.84
6/7/2024 1376698 Legal Services (April 2024) Operating
6/7/2024 1376699 Legal Services (April 2024) Operating
6/14/2024 1378694 Legal Services (May 2024) Operating
65,937.70
June 2024 Total 5,121,130.06$
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-800 Agenda Date: 8/20/2024
REPORT TO COUNCIL
SUBJECT
Note and File the Silicon Valley Power Bi-Annual Update
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
The City of Santa Clara’s Electric Department, Silicon Valley Power (SVP), is a recognized industry leader with a strong history and reputation of providing excellent customer service. The electric industry is rapidly changing and undergoing a fundamental transformation, shifting from a centralized resource grid toward an increasingly decentralized electrical grid with distributed renewable energy resources (e.g. wind, solar, hydrogen, and biogas), shifting variability in supply, and greater customer choice.
DISCUSSION
This report presented to the City Council provides an update on SVP and includes the following items:
· Growth Plan Update and System Limitations
· Update on System Expansion Projects
· Update on the Outage Management System
· SVP Martin Ave office space relocation and expansion
· Six month look-ahead including proposed rate increase
ENVIRONMENTAL REVIEW
There is no discretionary action being considered under this Report to Council; therefore, there is no “project” within the meaning of the California Environmental Quality Act (“CEQA”) and no further environmental review is required pursuant to section 15060(c) of Title 14 of the California Code of Regulations.
FISCAL IMPACT
There is no fiscal impact associated with this update. Implementation of certain elements will require funding which will be requested through the normal budget process.
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
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Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Note and file the Silicon Valley Power Bi-Annual Update.
Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jovan D. Grogan, City Manager
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-742 Agenda Date: 8/20/2024
REPORT TO COUNCIL
SUBJECT
Approval of Twelve (12) New Positions for Silicon Valley Power and One (1) New Position in the City Attorney’s Office to Support Silicon Valley Power’s Expanded System
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In November 2019, the Silicon Valley Power (SVP) management team met to discuss the strategic priorities for SVP. At that time, it was identified that the SVP was going to experience significant continued electric load growth, and SVP needed to develop a capital improvement strategy to meet this growth. Staff determined the need to develop both near-term and long-term strategies to accommodate approved growth and develop the necessary infrastructure plan options. The City Council has taken many actions in support of this growth as a part of the SVP’s System Expansion Plan, including approving master service agreements with engineering consulting firms (RTC’s 20- 854, 22-166, and 23-737), accepting SVP’s Three-Year System Growth Plan Strategy (RTC 21-871), and adopting SVP’s system plan for California Independent System Operator’s (CAISO) Transmission Planning Process (TPP) FY2023/24 (SVP System Expansion Plan CAISO TPP FY2023/24) (RTC 22-1172).
SVP staff has worked non-stop on a number of projects required to increase electric capacity in Santa Clara to meet the needs of SVP’s customers. The City Council has also taken some actions to increase staff, but additional staff is needed both to support the delivery of required infrastructure projects as the expanded systems are built and to support ongoing operations and maintenance of an expanded system.
Silicon Valley Power Growth
As discussed with the City Council on multiple occasions, the demand for electric power from SVP’s customers is expected to almost double over the next ten (10) years. During the recent heat wave, SVP reached a new system peak demand of 711 MW. This exceeded the peak of 703 in 2022. With the new system expansion projects, and the CAISO transmission line to be constructed by LS Power, SVP is expected to reach a peak of +/-1250 MW by 2030. In addition, staff is exploring in-city generation opportunities to provide additional capacity.
Silicon Valley Power Organizational Review
Based on SVP’s current load, future load, and expansion projects, additional staff is needed to deliver, operate, and maintain the electrical system. The City is in process of completing an organizational analysis to determine the staffing needs for SVP, but that process will not be completed for another 9-12 months with recruitments starting after its completion. SVP has near City of Santa Clara Printed on 8/16/2024Page 1 of 5
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term needs prior to that, such as the construction of the North Receiving Station (NRS), Scott Receiving Station (SRS), Kiefer Receiving Station (KRS), and 115kV transmission line (115 kV) which all will be under construction starting in 2025. While a consultant will complete a full SVP staffing needs analysis, staff has completed some preliminary comparison points with other utilities that help validate the need for additional staff in the interim. Based on estimated 2040 amounts, this trend increases as SVP expands the system. Below are the summary tables:
Employee per MW
Year SVP Alameda Palo Alto Roseville SMUD
2024 0.3 1.3 0.6 0.6 1.4
2040 0.1 0.9 0.9 0.4 2.0
Employee per Substation
YearSVPAlam
edaPalo
AltoRoseville
SMUD
2024 7.0 28.3 29.4 9.4 38.9
2040 6.2 28.3 29.4 9.4 38.2
DISCUSSION
Staff has completed a preliminary review of its needs and is requesting new critical positions for SVP.
These new positions align with current strategic objectives. Starting recruitment as soon as possible, even though it is in advance of the overall organizational review, will align new resources with the upcoming major expansion projects which is critical. Staff expects recruitment to require at least six months. It must be noted that electric utility positions continue to be competitive and difficult to recruit. SVP’s current vacancy rate is 18% and SVP has experienced failed recruitments with no candidates ultimately accepting an offer. SVP currently has 222 positions and if the 12 positions are approved that will increase to 234.
Below is a summary of needs and positions:
Growth Projects Engineering
The CIP project portfolio managed by SVP currently includes fifty-two (52) projects with a value of approximately $420 million in FY 2024/25. In addition, SVP has a separate team that focuses on the $400+ million System Expansion Plan projects (NRS, KRS, SRS, 115 kV Transmission). There are a number of additional expansion projects that staff is working on that require additional full-time employees for successful design and delivery. These include:
· Four 60kV reconductor projects
· Breaker replacement projects
· Phase Shifting Transformer project
· Construction of seven substations
· Two additional distribution substation expansions
· Completion of Twenty Year (20) System Expansion Plan
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Staff recommends the following new positions to expand the capital project delivery team, transfer institutional knowledge and increase the technical depth for critical positions:
1. One Principal Electric Utility Engineer
2. One Senior Electric Utility Engineer
3. One Assistant Electric Utility Engineer
Operations
The operations group will be involved in all new projects. Operations staff needs to support all the construction, inspection, and commissioning of all the new projects including NRS, KRS, SRS, 115, new substations, etc. Once those substations are commissioned, SVP staff will be responsible for ongoing operations and maintenance including protection, communication and control. To support this work four new positions are needed:
1. One Electric Division Manager
2. Three Electric Utility Engineers
Resources, Rates and Customer Engagement
Historically, SVP staff has negotiated one or two Power Purchase Agreements (PPA) concurrently.
For example, in 2011 the Resources group managed 18 projects for a total of approximately 915 MW (nameplate). Today the Resources group is responsible for the monitoring, scheduling, settlement and compliance of 32 projects totaling approximately 1,700 MW (nameplate).
To facilitate growth and meet California’s renewable energy requirements, SVP staff is now working on twelve (12) PPAs concurrently. This includes 7 PPAs directly for SVP resource needs and 5 PPAs in coordination with the Northern California Power Agency (NCPA). In addition, this team will project manage and implement the new Outage Management System (OMS) and outage coordination. To support all this work, three new positions are needed:
1. One Senior Resource Analyst (support compliance and power contracts)
2. One Principal Power Analyst (support rates and power contracts)
3. One Senior Business Analyst (OMS and Outage coordination) Business Services and Administration
Most of the construction, maintenance, and operations needs are supported by contractors. Between the Business Services Division, Purchasing Division of the Finance Department, and the City Attorney’s Office, it is typical to have over 200 contracts requiring attention. Therefore, all the above work requires the business services team at SVP to support construction contracts, collaboration with the Purchasing Division of the Finance Department, authorization of work from master agreements such as those with engineering firms and general service contractors (electricians, millwrights, insulation contractors, etc.), and insurance, and prevailing wage compliance.
1. Two new Power Contract Specialist positions
City Attorney’s Office
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The CAO provides support, advice, and legal review of many SVP legal issues. including the 200 contracts items discussed above. Currently, there is one Senior Counsel for Silicon Valley Power assigned to SVP. Staff estimates there are over 40 unique types of agreements required by SVP, including, service agreements, public works construction contracts, substation agreements, deposit agreements, fiber lease agreements, pole contact agreements. The Senior Counsel also is heavily involved with the City’s renewable energy and resource adequacy procurement and assists with the negotiation of renewable power purchase agreement, resource adequacy agreements, and western system power pool confirmations. In addition, Senior Counsel is engaged in fee title and easement sale and acquisition.
In addition to the legal advice on a wide range of utility issues, the Senior Counsel manages SVP’s special outside counsel handling SVP’s regulatory, litigation and other matters and assists with its public records act requests. With SVP’s projected growth, there is a need to support the Senior Counsel on all the unique work. Adding a Deputy City Attorney will allow this work to be done both cost-effectively, and with enhanced quality and responsiveness to SVP legal needs.
1. One Deputy City Attorney to provide that additional support.
ENVIRONMENTAL REVIEW
The proposed staffing changes are not a project subject to the California Environmental Quality Act (CEQA) pursuant to section 15378(b)(5) of Title 14 of the California Code of Regulations as they are administrative activities that will not result in direct or indirect physical changes to the environment.
FISCAL IMPACT
The annual cost of the thirteen (13) positions listed is approximately $3.8 million and would be funded by the Electric Utility Fund. The projected system growth will result in a net revenue increase to cover these additional personnel expenditures. SVP estimated revenues in FY23/24 for charges for services were $633 million. The estimated revenue for charges for services in FY 2029/30 are projected to exceed $1.1 billion. Considering hiring timelines, it is likely that only a few positions will be filled during this fiscal year. As positions are hired, SVP staff will monitor the operations budget and, if budget actions are needed for FY 2024/25, SVP staff will coordinate operating budget adjustments through monthly financial reports submitted by the Finance Department. Future budgets, revenue projections, and rate adjustment calculations will include the costs of the new positions.
For future years, the annual cost will be incorporated into the annual operating budget through the regular process.
COORDINATION
This report has been coordinated with the Finance Department, Human Resources Department, and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, [email protected] <mailto:[email protected]> City of Santa Clara Printed on 8/16/2024Page 4 of 5
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or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
That the City Council approve the addition of twelve new positions for Silicon Valley Power and 1.0 new position in the City Attorney’s Office to support Silicon Valley Power’s expanded system as follows:
· One Principal Electric Utility Engineer
· One Senior Electric Utility Engineer
· Three Electric Utility Engineers
· One Assistant Electric Utility Engineer
· One Electric Division Manager
· One Senior Resource Analyst
· One Principal Power Analyst
· One Senior Business Analyst
· Two Power Contract Specialists
· One Deputy City Attorney
Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jovan D. Grogan, City Manager
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City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
24-740 Agenda Date: 8/20/2024
REPORT TO COUNCIL
SUBJECT
Action to Delegate Authority to the City Manager to Negotiate, Approve, and Execute Agreements with Aquamarine Westside, LLC and Castanea Project, LLC to Purchase Up to 350 MW of Solar and 135 MW of Battery Energy Storage for up to $73.2 Million Annually
COUNCIL PILLAR
Deliver and Enhance High-Quality Efficient Services and Infrastructure Promote Sustainability and Environmental Protection
BACKGROUND
The City of Santa Clara’s Electric Department, Silicon Valley Power (SVP), purchases energy to supply to residents and businesses within the City of Santa Clara. With the passage of Senate Bill 100 (SB 100), SVP must meet the State of California Renewable Portfolio Standards (RPS) where SVP must procure a specified percentage of its retail sales from renewable energy resources by a particular year.
SB 100 requires retail sellers and local publicly owned electric utilities to procure a minimum percentage of 44% of retail sales from renewable energy resources by December 31, 2024, 52% by December 31, 2027, and 60% by December 31, 2030. The City of Santa Clara also adopted a Climate Action Plan setting a target to reduce greenhouse gas emissions by 80% by 2035.
SVP is also responsible for supporting the reliability of the grid through the demonstration of having sufficient resource adequacy capacity. Resource adequacy (RA) compliance ensures the safe and reliable operation of the grid in real-time providing sufficient resources when and where needed.
Each utility or load serving entity is responsible for demonstrating it has sufficient RA either through the ownership of generation resources and/or procuring enough RA, measured in Mega Watts (MW).
SVP generally procures renewable electrical power in a number of ways. SVP may enter into power purchase agreements (PPA) with project developers through their direct offerings or through a request for proposal (RFP) process. SVP may also participate in power purchase opportunities through the Northern California Power Agency (NCPA). Each potential renewable energy project may have unique characteristics that impact the value of the resource to SVP. Staff evaluates potential projects on locational value, shape of the generation output, environmental attributes, capacity attributes, viability, and operational flexibility.
In late 2023, CIM Group - the parent company of Aquamarine Westside, LLC (Aquamarine) and Castanea Project, LLC (Castanea) - presented two renewable energy projects to SVP. Both projects are located in Kings County, California and are already in commercial operation. CIM Group has City of Santa Clara Printed on 8/16/2024Page 1 of 4
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24-740 Agenda Date: 8/20/2024
brought other projects in the Kings County area to SVP including the Westland Grape project previously approved by City Council on June 15, 2024.
DISCUSSION
SVP’s electric load has increased by more than 20% over the last decade and is expected to continue increasing over the next decade. Due to SVP’s projected load growth, the utility has a continued need for renewable energy to meet the City’s Climate Action Plan and the State’s RPS requirements. SVP staff performed an evaluation based on projects’ fully operational status, volume, pricing, and determined both projects to be a good fit with SVP’s forecasted demand.
Aquamarine Solar Project
The Aquamarine solar project is a 250 MW solar project with 200 MW to be dedicated to SVP. The Aquamarine solar project is forecasted to generate an average of 525,266 MWh annually. The PPA price for energy generated by this project will be fixed over a 15-year period.
Castanea Project
The Castanea project is a 150 MW solar project with 135 MW of battery energy storage. The Castanea solar project is forecasted to generate an average of 405,614 MWh annually with the battery energy storage portion of the project capable of dispatching an average 197,100 MWh of stored solar when needed. The addition of battery energy storage in the Castanea project will provide 135 MW of RA capacity which helps support SVP’s RA compliance. This RA capacity provided by the battery equals approximately 5.4% of SVP’s current RA portfolio value. The Castanea will have two pricing rates, one rate for the renewable energy component and another for the battery energy storage component. Both rates are fixed for the duration of the 15-year term.
PPAs with a term of 15 to 20 year are typically the best value for both the buyer and the seller.
Longer term deals help the seller secure financing and give price certainty to both buyer and seller.
To meet RPS requirements, at least 65% of RPS procurement must come from long-term contracts of 10 years or more. The markets always fluctuate and typical PPAs are either fixed prices throughout the term or have escalators which allows for more stable budgeting.
The renewable energy market continues to be competitive, and both PPAs contain many terms which are standard for today’s market. For example, the seller will have an energy production guarantee which if the seller fails to meet would be subject to liquidated damages. This commitment and other commercial operation obligations are secured through the seller’s performance security which may be in the form of cash or a letter of credit. These PPAs will not have any development risks because these projects are already in commercial operation.
If both PPAs are approved and executed, SVP will begin receiving the energy and associated attributes from both projects on January 1, 2025 and have a term of 15 years. The two projects combined represent approximately 21% of SVP’s 2023 retail sales. The addition of these resources will increase reliance on renewable energy resources to serve load. These projects are anticipated to help SVP meet its RPS requirements through calendar year 2029. SVP will need to continue looking for additional renewable energy purchase opportunities to meet RPS requirements beyond 2029.
ENVIRONMENTAL REVIEW
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The Aquamarine Project has undergone environmental review under the California Environmental Quality Act (CEQA). On May 17, 2019, the Kings County Community Development Agency, as lead agency, adopted a Mitigated Negative Declaration for the Aquamarine Solar Project (State Clearinghouse No. 2019059082). The environmental impacts of the Aquamarine project are also analyzed by the Final Program Environmental Impact Report for the Westlands Solar Park Master Plan and WSP Gen-Tie Corridors Plan (State Clearinghouse No. 2013031043). This environmental document was certified by the Westlands Water District Board of Directors on January 16, 2018.
The Castanea Project has also undergone environmental review under CEQA. On or about October 7, 2019, the Kings County Planning Commission adopted a Mitigated Negative Declaration for the Castanea Project LLC (previously known as the Chestnut Solar Project) and, on or about April 2021, an Addendum No. 1 to the Mitigated Negative Declaration was subsequently prepared (State Clearinghouse No. 2019089051). The Final Program Environmental Impact Report for the Westlands Solar Park Master Plan, which is referenced above, also analyzes the environmental impacts of the Castanea project.
Both remain fully operational and in compliance with CEQA. The proposed approvals will not change these projects; therefore, no additional environmental review is required.
FISCAL IMPACT
SVP will purchase an average of 525,266 MWh of electricity annually from the Aquamarine project for an annual cost of approximately $24 million to $26 million. SVP will purchase an average of 405,614 MWh of electricity annually from the Castanea project for an annual cost of approximately $45.7 million to $47.2 million. The costs for these projects are accounted for in the Resource and Production budget in the Electric Utility Fund. Funding for these agreements in future years will be brought forward with the annual budget processes as needed.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the
public information desk at any City of Santa Clara public library.
RECOMMENDATION
1. Authorize the City Manager or designee to negotiate, approve, and execute a Power Purchase Agreement with Aquamarine Westside, LLC to purchase renewable solar energy and associated attributes from the Aquamarine project on the terms presented, subject to the review and approval as to form by the City Attorney;
2. Authorize the City Manager or designee to negotiate, approve, and execute a Power Purchase Agreement with Castanea Project, LLC to purchase renewable solar energy, battery storage products, and associated attributes from the Castanea project on the terms presented, subject to the review and approval as to form by the City Attorney; City of Santa Clara Printed on 8/16/2024Page 3 of 4
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24-740 Agenda Date: 8/20/2024
3. Authorize the City Manager or designee to execute all documents, agreements, and certificates as may be required under the terms of the above power purchase agreements, 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
4. Authorize the City Manager or designee to (a) take any and all actions as are necessary or advisable to implement and administer the power purchase agreements; and (b) approve and execute future amendments to the Agreements so long as the contract price and term are not modified, subject to the review and approval as to form by the City Attorney.
Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jovan D. Grogan, City Manager
City of Santa Clara Printed on 8/16/2024Page 4 of 4
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