HomeMy WebLinkAboutMINUTES - 08032010 - SD.5RECOMMENDATION(S):
1. CONDUCT a Public Hearing, noticed pursuant to Government Code Section 4217.12, to
consider two Power Purchase Agreements (PPAs) with Main Street Power, Inc. for the
installation of photo-voltaic panels at 13 County-owned sites and the sale of all electricity
produced by the panels to the County.
2. DETERMINE that the terms of the Power Purchase Agreements are in the best interests
of the County.
3. FIND that the anticipated cost to the County for electrical energy provided under the
Power Purchase Agreements over twenty years ($16,504,713 total, based on an average
output of 3,814,015 kWh per year) will be less than the marginal cost to the County of
electrical energy that will be consumed by the County in the absence of those purchases,
which cost is estimated to be approximately $1,061,798 higher.
4. FURTHER FIND that the above projects are a Class 1 (a) Categorical Exemption under
the California Environmental Quality Act (CEQA); DIRECT the Director of the
Department of Conservation and Development, or designee, to file a Notice of Exemption
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 08/03/2010 APPROVED AS RECOMMENDED OTHER
Clerks Notes:CONTINUED to September 14, 2010
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Gayle B. Uilkema, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Susan A. Bonilla, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: Mike Lango, (925)
313-7100
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: August 3, 2010
David J. Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
SD. 5
To:Board of Supervisors
From:Michael Lango, General Services Director
Date:August 3, 2010
Contra
Costa
County
Subject:Hearing on Proposal to Enter into two Power Purchase Agreements with Main Street Power to Install Solar
Panels at 13 County Facilities
with the County Clerk, and DIRECT the Director of General Services, or designee, to
arrange for the payment
RECOMMENDATION(S): (CONT'D)
of the handling fees to the Department of Conservation and Development and County
Clerk for the filing of the Notice of Exemption.
5. APPROVE, at the conclusion of the Public Hearing, the above projects and two
20-year Power Purchase Agreements (PPAs) with Main Street Power (MSP) for the
installation of photo-voltaic panels at 13 County-owned sites and the sale of all electricity
produced by the panels to the County; and AUTHORIZE the General Services Director,
or designee, to sign the Power Purchase Agreements.
FISCAL IMPACT:
Total estimated electricity cost savings from the agreements is $672,131 for the first five
years and $1,061,798 over the entire twenty year term of the PPAs.
BACKGROUND:
In 2004, Contra Costa County adopted a Strategic Energy Plan (SEP). The SEP
recommended various energy efficiency improvements in four categories: 1) Energy
Efficiency Projects, 2) Supply Side Opportunities, 3) Organizational Advancement, and
4) New Construction and Facility Renewal. The installation of photo-voltaic panels falls
under the Supply Side Opportunities category of the SEP.
In 2005, AB32 was enacted by the State of California, which requires a statewide
greenhouse gas reduction to 1990 levels by 2020. Following passage of AB32, the Board
of Supervisors approved the County's Municipal Climate Action Plan (MCAP) in 2008.
Since the County exceeded AB32's 2020 target for its municipal operations, the Board of
Supervisors set goals for 2030 of greenhouse gas reductions of 3,800 MTCO2e (metric
tons of carbon dioxide emissions) every five years beginning in 2010.
The PPAs will allow the County to annually purchase an average of 3,814,015 kWh of
electricity from renewable self-generation, which is the equivalent of reducing annual
greenhouse gas emissions by 1,524 MTCO2e. This represents over 40% of the County's
greenhouse gas reduction for the 2010-2015 year period. Main Street Power will be
responsible for all aspects of the solar installation projects including design, permitting,
equipment acquisition, construction, commissioning, and maintenance of the installed
photo-voltaic panels. The total cost to install the solar panels is approximately $15
million.
Under the terms of the PPAs, Main Street Power has agreed to the maximum extend
possible to utilize local labor and subcontractors for installation of the photo-voltaic
panels at the following locations:
Ground-Mounted Solar Installations
4491 Bixler Road, Byron (Byron Boys Ranch)
5555 Giant Highway, Richmond (West County Detention Facility)
4800 Imhoff Place, Martinez (Animal Services)
2530 Arnold Drive, Martinez (Summit Centre office building)
12000 Marsh Creek Road, Clayton (Marsh Creek Detention Facility)
Roof-Mounted Solar Installations
5555 Giant Highway, Richmond (West County Detention Facility)
2467 Waterbird Way, Martinez (GSD Maintenance Facility)
2475 Waterbird Way, Martinez (Public Works Maintenance Facility)
4549 Delta Fair, Antioch (Employment & Human Services/Probation)
1750 Oak Park Boulevard, Pleasant Hill (Library)
1305 MacDonald Avenue, Richmond (Employment & Human Services)
1650 Cavallo Road, Antioch (Employment & Human Services)
300 South 27th Street, Richmond (Headstart Facility).
In September 2009, Main Street Power approached the County to install photo-voltaic
systems for County buildings located in “distressed qualified census tracts” as defined by
the Internal Revenue Service. The photo-voltaic systems that fall into this category
qualify for Federal New Market Tax Credits (NMTC). Since that time, GSD Energy
Program staff have been working with Main Street Power to identify suitable County
facilities for solar energy projects. The proposed PPAs are the result of these efforts.
The PPAs obligate the County to purchase all electricity produced by Main Street
Power's photo-voltaic panels rather than from PGE. There is no cost to the County for the
purchase and installation of the photo-voltaic panels. Three of the photo-voltaic locations
qualified for Federal New Market Tax Credits (NMTC). The electricity purchase price for
these locations will be set at a fixed, below-market rate for the first seven years. The ten
other locations did not qualify for NMTC status. The electricity purchase price for these
locations will be set at a fixed, below-market rate for the first five years.
When the fixed rate period expires, the electricity purchase price will be reset to a
projected market rate based upon electricity rates increasing by 3.75% per year.
Beginning in years 6 or 8, the projected market price has an annual escalator of 3.75%
per year. The estimated savings is based upon paying Main Street Power a lower rate for
peak and partial peak electricity than PGE and avoiding PGE rate increases during the
fixed rate period.
After the fixed rate period, the County has the option every three years to purchase the
photo-voltaic panels at fair market value (as determined by an appraiser) or a fixed price
stated in Exhibit 1A of the PPA, whichever is higher, and pay no cost for the electricity
produced by the photo-voltaic panels.
To date, Main Street Power has surveyed all the proposed locations, hired electrical and
structural engineers, developed proposed photo-voltaic systems at each location, and filed
reservations for California Solar Initiative performance based incentives with PGE. These
incentives allow Main Street Power to offer electricity prices at below market rates
consistent with the fixed electricity rate pricing during the initial term of the PPAs, five
and seven years respectively. Thereafter, the California Solar Initiative incentives expire
and the electricity rate adjusts to the projected market rate found in Exhibit 1 of the PPAs.
The County agreed to not include a performance guarantee in the PPAs in exchange for a
lower annual escalator. The exchange reduces the rate risk beginning in years six and
eight respectively and saves an estimated $116,603 over the twenty year term.
California Government Code Sections 4217.10 - 4217.18 permit public agencies to enter
into energy service contracts without a formal bid process provided the governing body;
(1) determines at a public hearing that the terms of the service contract(s) are in the best
interests of the public agency; and (2) finds that the anticipated cost to the public agency
for electrical energy provided by the energy conservation facility will be less than the
anticipated marginal cost to the public agency of electrical energy that would have been
consumed by the public agency in the absence of those purchases.
On July 27, 2010, the Board of Supervisors conducted a Public Hearing to consider two
Power Purchase Agreements (PPAs) with Main Street Power, Inc. for the installation of
photo-voltaic panels at 12 County-owned sites and sale of all electricity produced by the
panels to the County.
During the Public Hearing, the Board discussed provisions in the PPAs specifically
related to the use of local labor in Contra Costa County for the installation and
construction of the photo-voltaic panels. The Board continued the Public Hearing to
August 3, 2010 and directed staff to work with Main Street Power, Inc. to strengthen the
commitment to use local labor and to clarify certain provisions of the PPAs related to the
use and selection process to identify qualified local labor.
CLERK'S ADDENDUM
CONTINUED to September 14, 2010
ATTACHMENTS
PPA - Non New Market Tax Credit
PPA - New Market Tax Credit