Title
Staff Report a Resolution Authorizing the City Manager to Execute an Agreement with the California Energy Commission (CEC) to Construct a 1 Mega Watt Solar Array Project with Associated Energy Efficiency Upgrades at the Water Pollution Control Plant; and to Authorize the City Manager to Amend the Installation Agreement and the Measurement and Verification Agreement with Climatec, LLC for Energy and Water Savings Projects with Related Improvements to City Facilities, to include the Solar Installation. The Agreement with the CEC Includes $1,995,963 in Reimbursable Grant Funds, with a City Match of $1,922,905 (from the WPCP Enterprise Fund).
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council authorize the City Manager to execute an agreement with the California Energy Commission (CEC) to construct a 1 Mega Watt (MW) solar array at the Water Pollution Control Plant (WPCP); and to amend the existing agreement (Contract Amendment 1) with Climatec to include the scope of work within the CEC grant application. The total cost for the Innovative Energy Efficiency and Renewable Energy Deployment Project consists of a turn-key installation amount of $3,838,828 for Climatec and estimated City staff costs of $80,040 (to manage the project), for a total amount of $3,918,868. The two funding sources are $1,995,963 as a reimbursable grant from the CEC, and $1,922,905 in matching funds from the WPCP’s enterprise fund.
BACKGROUND
After completion of a citywide energy/water resources audit in 2015, which identified a list of proposed energy efficiency projects, the City entered into an agreement with Climatec in May 2016 for project implementation. At that time, staff indicated to the City Council that the solar portion of the efficiency projects would be brought forward separately due to an unresolved issue of contaminated dirt located onsite at the WPCP. In the interim, in early 2017, the CEC issued a grant opportunity which the City applied for (with input from Climatec) for ‘innovative energy efficiency and renewable energy deployment’, covering a proposed solar project at the WPCP. The City was one of only four entities awarded this grant by the CEC, with San Leandro being funded the largest grant amount.
Analysis
The WPCP represents one of the largest municipal energy-users, with current annual electrical charges budgeted at $550,000. The proposed project will deploy energy efficiency upgrades and a 1 MW photovoltaic (PV) solar power generation system at the City’s WPCP. Once completed, the project will reduce the WPCP’s electrical energy consumption by approximately 53%, and approximately 2.8m lbs. of greenhouse gas (GHG) emissions annually, helping to meet the Climate Action Plan (CAP) goal of reducing emissions by 25% below 2005 levels by 2020.
The proposed Contract Amendment 1 for the Climatec Installation Agreement includes the following components, all to be constructed onsite at the WPCP:
• 1 MW ground-mounted solar PV system
• Install new HVAC controls at WPCP
• Integrate new HVAC controls into existing citywide system
• Exterior LED lighting retrofit
• Interior LED lighting retrofit
The energy efficiency upgrades proposed for the WPCP include LED lighting to replace existing interior/exterior lighting fixtures, which will provide improved light quality, longer equipment life, and immediate reductions in energy usage. In addition, the project will include building automation upgrades to control the HVAC equipment, to provide substantial temperature control improvements, scheduling, and monitoring capabilities to significantly reduce energy use and GHG emissions. The 1 MW PV solar system will be powered by SunPower® modules, which have a 25-year repair and replacement guarantee in addition to a full 25-year warranty covering the panel’s rated power and workmanship. The energy efficiency measures and 1 MW PV solar power generation system will reduce the WPCP’s reliance on grid-produced power by 53%, or approximately $250,000 annually, based on current electrical rates.
Exhibit A shows a graphic representation of the proposed location for the solar PV system, which would be placed in a section of the current drying beds. Four of the 13 beds are proposed for the solar PV installation. The beds would need to be decommissioned in preparation for the solar PV installation. Decommissioning would include removal of wet sludge lines, disposal of material in trenches, stormwater inlet/plant drain installation, and backfill/pavement of center trenches. Estimates are that the one-time cost for this work would be approximately $80,000 to $100,000 per bed, or approximately $400,000.
With the proposed use of these four drying beds for solar PV, the WPCP would need to modify the current sludge drying operations. Currently, all beds are used to dry the sludge materials, with off-hauling (by contract) occurring 1-2 times/year at a cost of approximately $180,000 annually. With a portion of the beds in use for the solar PV, staff anticipates that the process for handling the sludge materials would be modified to haul directly from the belt press (wet materials). Staff anticipates that the on-going annual cost associated with hauling wet sludge would be approximately $385,000.
The total savings projected by Climatec for the solar PV project is $10+ million over 30 years (expected life expectancy of the solar PV panels). City staff will continue to explore alternative methods to further dry the sludge mechanically onsite, and/or deploy additional technologies to improve the drying efficiency of the remaining drying beds. As a worst-case scenario, the total cost increase for direct hauling sludge over a 15-year period is projected at just over $3 million.
Previous Actions
• City Council Meeting May 16, 2016 - Installation Agreement and a Measurement and Verification Agreement with Climatec, LLC for Energy and Water Savings Projects with Related Improvements to City Facilities
• City Council Meeting May 16, 2016 - Resolution No. 2016-054
Applicable City Policies
• General Plan Policy OSC-7.6 Reducing Municipal Greenhouse Gas Emissions. Reduce greenhouse gas emissions associated with municipal operations, including those associated with energy use, City vehicles, City recycling and composting operations, and utilities.
• Climate Action Plan (CAP) Goal #6.1, “Increase Energy Efficiency and Renewable Energy Use in City Facilities”
Environmental Review
The grant application process included both California Environmental Quality Act (CEQA) and National Environmental Protection Act (NEPA) review of this project, with a determination of exemption.
Fiscal Impacts
This solar installation project will cost $3,918,868, of which $1,995,963 is reimbursable grant monies from the CEC and $1,922,905 is in required City matching funds. The proposed source of funding is the WPCP Unrestricted Fund Balance (593-101). This requires increasing the 2017-18 budget for Account 593-51-002 by the same amount. The grant requires that the project be completed by March 2019.
Budget Authority
The unrestricted fund balance for the WPCP is approximately $25.5M. Fund balance is utilized for proposed WPCP CIP projects, unscheduled mechanical repairs and equipment replacements, and loan repayments for the recently completed $50M renovation project. There is adequate unrestricted fund balance to appropriate $3,918,868 for the proposed solar installation project.
ATTACHMENT(S)
Attachment(s) to Staff Report
• Attachment A - Solar PV Aerial
• Attachment B - CEC Grant
o Exhibit A - Scope of Work
o Exhibit A-1 - Schedule of Products and Due Dates
o Exhibit B - Category Budgets for City, Climatec, and Bockman & Woody Electric Company
o Exhibit C - General Terms and Conditions
§ Exhibit C, Attachment 1 - Confidential Products
o Exhibit D (and Attachments 1-7) - Federal Provisions
o Exhibit E - Contact List
• Attachment C - Contract Amendment 1 to Installation Agreement with Climatec
PREPARED BY: Debbie Pollart, Director, Public Works Department