8/20/2024 item 8
City Council
Item #8: 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
1852
for up to $73.2 Million Annually
THE MISSION CITY
RTC 24-740
August 20, 2024
1 -M SILICON
5 VALLEY
Procurement Process
• SVP procures Renewable Energy PPA's through:
- RFPs (for broader RFPs, we typically launch through NCPA) - Responding to Developer RFP's
- Renewable Energy Brokers
- Direct Communication with Renewable Energy Project Developers • Staff performs analysis to determine fit with SVP load and resource portfolio
- Economic Value (Historical/Forward Looking Prices, Location, Energy Profile, REC, Resource Adequacy)
- Development Risk (Site Control, Permitting, Interconnection, Financing) • Shortlisted proposals are negotiated by a team of SVP Staff and Internal/External Legal Counsel.
2 POST MEETING MATERIAL
1 8/20/2024 item 8
SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Aquamarine and Castanea
• Both projects located in Kings County (~140 miles from Santa Clara)
• Aquamarine - 250 MW Solar (SVP contracting for 200 MW) - 500,000 to 600,000 MWh per year for 15 years
- Average annual cost of ~ $25 Million
• Castanea - 150 MW Solar + 135 MW Battery Energy Storage System - 350,000 to 450,000 Mh per year for 15 years
- Average annual cost of ~ $46 Million (includes cost of battery) Both projects
- No development risk, projects already online
- Higher net value compared to other proposals due to location and delivery period BERE - Able to provide Resource Adequacy for reliability compliance purposes 2383. 3333
- Combined output is almost 20% of SVP's forecasted 2025 load Castanea Solar + Storage
3 SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Need and Benefit
2025 Model
• Helps fill renewable needs to meet
Forecasted Annual Load, RPS Requirements, Renewable
State Requirements Generation (MWh)
8 000 000
- Continue pursuing additional PPAs 7 000 0D0
6 000000
• Supports increase of renewable 5 000 00C
and greenhouse gas free energy
201CODE
• 2025 Model
- Without proposed PPA's 53% GHG 2025 2000 2032
GHG Free 53%
Rentialle Cuntraden Under Contract
Free - Palerbal Cantrods Under Dracusalan
- RPS Requiramant
- With PPA's 73% GHG Free
GHG Free 73%
* GHG Free a Unso or Nat Gas
2 8/20/2024 item 8
SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Financial Analysis
• Procuring energy on a short- Historic (Actual) and Future (Forecasted) Values of term basis can be volatile Renewable Energy Profile and Capacity Attributes - Last 5 years as low as $68M $120.000,000
and as high as $114M
$100,000,000
• Long-term contracts provide
cost certainty 580,000,000
• Protects from higher future $60,000,000
$40,000,000
protest ta lover price coste
$20,000,000
2019 2020 20212022 2023202420252026 2027 2028 2029
• Energy + REC + RA — Total Cost of Both PPA's
5 SILICON
VALLEY
POWER.
CITY OF SANTA CLARA
Recommendation
Finalize negotiations on both contracts
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;
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.
3 8/20/2024 item 8
City Council
Item #8: 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
1852
for up to $73.2 Million Annually
THE MISSION GIN
RTC 24-740
August 20, 2024