Title
Presentation on the East Bay Community Energy’s Critical Municipal Facilities Program
Staffreport
SUMMARY AND RECOMMENDATIONS
City staff and project design consultants will present to the Committee the proposed concept design options to be shared with the next phase of community outreach.
This item is for information only.
BACKGROUND
East Bay Community Energy (EBCE) exists to provide more renewable energy at competitive rates to our customers. They reinvest the earnings back into the community to create local green energy jobs, local programs, and clean power projects. They supply electricity to all accounts (residential, business, and municipal) and PG&E delivers it to our customers.
In 2018, the County of Alameda and 11 of its cities launched EBCE as a not-for-profit public agency that governs the Community Choice Energy service. The Joint Power Agency expanded in 2021 so that it now includes Albany, Berkeley, Dublin, Emeryville, Fremont, Hayward, Livermore, Newark, Oakland, Piedmont, Pleasanton, San Leandro, Tracy, and Union City. The unincorporated areas of Alameda County including Ashland, Castro Valley, Cherryland, Fairview, San Lorenzo, and Sunol are also served by EBCE.
Processes and decisions are completely transparent, with Board and Community Advisory Committee meetings open to the public. EBCE also has a local team to run day-to-day operations and provide customer support to residents and businesses.
EBCE’s local development and innovation programs are designed to deliver benefits across their service area, and the Critical Municipal Facility Resilience Program is designed to support their JPA partners in meeting resilience and climate action goals by providing clean, local backup power at critical municipal facilities.
The Critical Municipal Facility Resilience Program is designed to address barriers faced by Cities in implementing clean energy resilience for backup power by leveraging EBCE expertise in solar and storage and unburdening City staff, providing a procurement pathway for JPA members, generating economies of scale in pricing, and ensuring that solar and storage assets are maintained over their lifetimes so that critical municipal facilities can rely on them.
Phase 1 of the Critical Municipal Facility Resilience Program is a result of an effort to identify a subset of critical facilities to participate across several cities. Phase 1 City participants are San Leandro, Hayward, Fremont and Berkeley. Critical municipal facilities in these four cities have undergone extensive review by independent engineers working onsite and offsite, with independent engineers identifying key considerations such as system configuration, sizing, and other facility repairs that may be required for sites to host solar and storage systems that advance resilience by ensuring that critical facilities can operate for up to three days during a power outage. EBCE’s independent engineers have also identified facility repair costs that could be included in the request for offers (RFO).
EBCE has also been engaged with City Attorneys from all cities to negotiate a contract in advance to ensure that procurement can advance quickly once the RFO is issued by EBCE.
In total, Phase 1 of the Critical Municipal Facility Resilience Program is expected to include thirty to forty facilities across four cities, representing three to five megawatts of solar photovoltaics and three to four megawatts of battery storage. Key next steps for the Critical Municipal Facility Resilience Program include issuance of an RFO in June 2022 for the development of energy resilience at these facilities, to be paid for via a power purchase agreement (PPA) which is expected to be cost neutral for the City.
PPAs are a mechanism by which an energy developer designs and installs an energy resource, such as solar and storage, at a facility. The cost for the installation and associated requirements, like permitting and financing, is recovered via a charge for consuming the energy generated. Private sector developers are eligible for tax credits that are not accessible to governments, which provides a source of potential savings. PPA durations are typically multiyear, ranging from 10-25 years and may have options to extend, buy or remove the equipment at the end of the term.
In addition to the potential savings generated via tax credits available to private energy developers, benefits of a PPA for purchasers include the option of no upfront costs, bill certainty for the term of the PPA, the inclusion of operations and maintenance in the PPA, and lower escalation of costs compared to utility generation costs.
Energy generation costs are forecast to increase quickly year over the coming two decades due to factors including cessation of operations at Diablo Canyon and increasing competition for renewable energy resources, while PPA escalation rates do not reflect the utility-scale pricing dynamics described above. PPA escalation rates have been lower than utility escalation rates historically.
In EBCE’s Critical Municipal Facility Resilience Program, part of the value proposition is continued support for Cities throughout the life of solar and storage assets on critical facilities. The contractual structure proposed for this program reflects this with EBCE serving as the counterparty to the City’s PPA, with EBCE taking on the role of working with the solar and storage developer to ensure proper asset management over time.
SAN LEANDRO’S ENGAGEMENT WITH EBCE’S CRITICAL MUNICIPAL FACILITY RESILIENCE PROGRAM
The City of San Leandro has been engaged with EBCE on the Critical Municipal Facility Resilience Program for over three years, demonstrating commitment and leadership in clean, local energy resilience and support for critical municipal services in times of grid power outage.
Key activities by year include:
• 2019: Critical facility sites confirmed with San Leandro based on Alameda County’s list of critical facilities per Hazard Management Plan information.
• 2020: EBCE engaged independent engineering firms to perform initial screening for economic feasibility, hazard, disadvantaged population, service population at San Leandro critical facility sites.
o Sites examined by independent engineers included: Manor Branch Library, Aquatic Center, Public Works, Marina Community Center, ACFD Station #11, ACFD Station #10, Water Treatment Plant, City Hall, Police Headquarters, San Leandro Main Library, Parking Garage, ACFD Station #9, ACFD Station #12, and San Leandro Senior Community Center.
• 2021: After initial desktop screening was completed, independent engineers visited San Leandro’s fourteen sites and performed physical assessment of facilities to define solar + storage requirements and other improvements that may be required to update facilities.
• EBCE began engaging with the City Attorneys for each City participating in Phase I of the Critical Municipal Facility Resilience Program to negotiate PPA terms in advance of RFO issuance in 2022.
• 2022: EBCE engaged independent engineers to assess projects in a portfolio to understand performance relative to cost neutrality. Final cost neutrality will be measured by proposed PPA rates resulting from developer bids in the upcoming RFO.
• EBCE is also working with San Leandro and the other Phase I cities to support coordination across City departments on the solar and storage infrastructure.
• With confirmation from San Leandro and other Cities participating in Phase I of the Critical Municipal Facility Resilience Program, EBCE will issue a Request for Offers (RFO) in June 2022.
o Sites to be included in RFO are: Manor Branch Library, Main Library, ACFC Station #11, ACFC Station #10, Senior Community Center, City Hall, Police Headquarters, Public Works, and Marina Community Center.
In total, San Leandro’s portfolio of sites to be included in the Phase I RFO for EBCE’s Critical Municipal Facility Resilience Program represent an investment of $4 to 6 million (dependent on final bids), and are estimated to provide nearly 1,200 kW DC of installed solar power combined with approximately 650 kW of energy storage.
EBCE will issue the RFO in June 2022 for the development of San Leandro and the other City participants’ facilities and plans to select a bidder in the Fall 2022. After bidder selection, San Leandro and other cities will have the opportunity to review the bidder’s offer and approve if the terms are acceptable to the City. If acceptable, the City of San Leandro would sign the PPA agreement with EBCE, and EBCE would sign the agreement with the developer.
Construction of solar and storage for critical facility resilience could begin the following winter, with a construction timeline estimated from eighteen to twenty-four months to construct all facilities across the four participating cities. After construction, the City would pay a monthly charge for the use of the resilience infrastructure (solar and storage assets), and have EBCE as the primary point of contact for any needs related to the resilience infrastructure.
ATTACHMENT(S)
Attachment(s) to Staff Report
• Presentation
PREPARED BY: Sheila Marquises, Director, Engineering and Transportation Department