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Home My WebLink About19 C34410A Photovoltaic Improvement Project 777-14ASSIGNED CONTRACTS C44330 THROUGH C44380 CITY COUNCILACTION APPROVEI DENTF,D RECEIVED ' OTHER 1 tF.CTIN DAT l1- , j, l STAFF REPOR rs: r i ., /l l ti/ i de! ri ia // ¢ // i CITY OF PALM DE3 : /m+' PUBLIC WORKS DEPAF ,T3 9 IVT:..LS A ' A13STAIN: / Lm1 , VERIFI D BY: . MEETING DATE: October 28, 2021 Oribinal on File with Ci lerk's Office I . • lyeJ_ l _... . REVIEWED BY REQUEST CONTENTS Recommendation Ryan Gayler, Project Manager Andy Ramirez, Deputy Director of Public Works Receive and file an informational item regarding the Civic Center Photovoltaic Improvements Project (Project No. 777-14) Vicinity Map Presentation slides By Minute Motion, receive and file informational item regarding the Civic Center Photovoltaic Improvements Project. Strateqic Plan Obiective The installation of Solar Photovoltaic Systems addresses Energy and Sustainability Priority 2 of the City's 2013-2033 Strategic Plan, Envision Palm Desert — Forward Together, which is to "promote greater use of sustainable materials". Specifically, installation of photovoltaic systems helps to reduce dependence on the electric grid which generates electricity using non-renewable resources. Backqround In 2001, the City designed and constructed a carport structure with a photovoltaic (PV) system mounted on the top in the Civic Center parking lot. In the twenty years since the City installed its first PV system, two additional systems were installed in the Civic Center complex. One was constructed north of City Hall, near the skate park, and the other is adjacent to the Parkview Office Complex. The original PV system is outdated and is no longer functioning. In addition, the City Council has expressed a desire to increase the City's investment in renewable energy technology at City Hall. Public Works advertised a request for proposals (RFP) for a consultant to perform an analysis of the existing PV systems, evaluate the feasibility of installing additional PV arrays, and energy storage to replace the defunct installation on the Civic Center Carport. During the advertisement period, Forefront Power contacted the City to present information regarding a joint power authority (JPA) called SPURR (School Project for Utility Rate Reduction) that was created to assist educational facilities to make energy efficiency improvements. The JPA also allows municipal facilities to benefit from the organization. The October 28, 2021 – Staff Report Informational Item – Civic Center Photovoltaic Improvement Project Page 2 of 4 JPA created an RFP to select a consultant to evaluate facilities and make recommendations for increasing energy efficiency. The JPA went through an extensive competitive review process and selected Forefront Power as their consultant based upon low price and quality of work. The goal of SPURR’s RFP is the same as the RFP the City was advertising. Therefore, the City canceled its RFP and elected to pursue the services available through SPURR. One of the benefits of the program is that Forefront Power conducts a free energy evaluation. Forefront Power gathered energy usage data and has submitted a proposal for installation of PV improvements at three locations within the civic center campus. The size of the system across the three locations is 979 kW. Another benefit of the program is that Forefront Power is responsible for the installation, maintenance, and repair of the PV system. Under the power purchase agreement (PPA), the City will continue to pay the SCE electrical bill (however, at a reduced rate due to the PV solar generation offset). With the anticipated cost savings, the City will also pay a monthly PPA payment to Forefront Power at the rate of $0.1491 per KWH (kilowatt hour). These two rates combined will be less than the current SCE rate. Over time, as electrical rates climb, the City will continue to pay the lower rate throughout the twenty-year term of the PPA. In addition, there is a clause in the agreement that requires Forefront Power to guarantee the performance of the system so that the City maximizes solar generation and maintains the lowest rates possible. The cost of the system, including installation and maintenance is rolled into the monthly power purchase payment. Staff has also requested that Forefront Power provide a separate cost estimate for additional electric vehicle charging stations (EVCS) within the Civic Center campus. This includes four charging stations at Civic Center West and two each at the Parkview Office Complex (Civic Center East) and the Aquatic Center. The cost of this separate proposal is estimated to be $140,000 and paid for by available funds in the City’s Capital Improvement Program. Landscape Impact The proposed PV improvements will be installed in the parking lots at City Hall, the Parkview Office Complex, and the Aquatic Center. These structures will be built over existing landscaped median islands. The landscape division performed an inventory and determined that the project will require a removal of about 100 trees. The only trees to be removed are trees that would be under the proposed carport structure. All other trees will remain and have been factored into the shade analysis for the project. Below is a table showing the trees to be removed. TREE QUANTITY Date Palm 50 Indian Rose Wood (Dalbergia) 11 Southern Live Oak 11 Tipu 9 Others 21 October 28, 2021 – Staff Report Informational Item – Civic Center Photovoltaic Improvement Project Page 3 of 4 All the trees to be removed are classified as in good condition. However, some of the date palms have exceeded their useful life and are beginning to exhibit signs of decline such as bottlenecking at the top of the tree. The landscape division will analyze the trees to determine those in the best condition and pursue the feasibility of relocating those trees to other locations within the Civic Center. Resource Preservation and Enhancement Committee Recommendation The project was presented to the Resource Preservation and Enhancement Committee at the October 18, 2021 meeting. The presentation was well received and the committee unanimously recommended approval of the Civic Center Photovoltaic Project to the City Council. Staff answered one question regarding the trees and clarified that no trees outside the footprint of the carport structures would be removed. The committee cited the renewable energy generation, reduction of 1.6 million KWH of green house gases, and added shaded parking as some of the many benefits of this project. Fiscal Analysis In the first year of this agreement, the electrical rates will increase slightly over the previous year. However, over time, as electrical rates climb, the savings to the City will increase as well. By the final year of the agreement, the cumulative savings to the City are estimated to be over $1.6 million. October 28, 2021 – Staff Report Informational Item – Civic Center Photovoltaic Improvement Project Page 4 of 4 There is incentive to proceed with this project quickly and submit the required application documents. Staff was recently informed that Southern California Edison (SCE) is attempting to change the net energy metering (NEM) process in the near future. This proposed change would make many, if not all photovoltaic projects economically unviable. It is anticipated that these changes will come into effect as early as January 2022. If the proposed modifications to net energy metering are approved, the savings for this project will shrink from over $1.5 million to a loss of $1.9 million. Staff is planning to bring this item before the City Council at the November 18, 2021 meeting for approval of the power purchase agreement and secure the current NEM 2.0 rates before the proposed NEM 3.0 rates come into effect. LEGAL REVIEW Approved as to Form DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER N/A Robert W. Hargreaves City Attorney Andy Firestine Andy Firestine Assistant City Manager Janet M. Moore Janet M. Moore Director of Finance Andy Firestine Andy Firestine Assistant City Manager City Manager: L. Todd Hileman: L. Todd Hileman Attachments: 1. PowerPoint 2. Vicinity Map City of Palm Desert Resourte Preservation and Fnhancement ` Brian Taylor Director- CA Public Sector October 2021 i�� PALM DESERT CALIFOHNIA EJ SPURR .�,.�,,..a:.� R�.�.e...�.. FOREFRONT POWE0. �City of Palm Desert Sustainabi�ity Leader f ��■ �� $� On-Site Solar �� Energy Savings � ��ricis � �� - ; �, l Statewide RFP O Induded0&M SolarDisplays SustainabihtyGoals � SPURR REAP Program • SPURR: School Prqect for UtiLity Rate Reduction • Joint Powers Authority Pounded in 198g • Buying Consorhum of z00' USDs & CCDs • AggregatedProcurementforUtilitles • ProgramsAvailableforalLCahforniaPublicAgencies • REAP RFP: Renewable Energy Aggregated Procurement • Savetime:5treamhne5olar&Storagebuyingprocess � • Save money: Drive dovm project pncing • ReduceRisk:lmprovemntracttermsandmndRions_ E''J SPURR REAP RFP •�• . VI" � � J • REAP RFP Solicitation: C1/� • Multlpledifferentsolar&stordgeprojecttypeslncWded `-' • Specificpro�ectincWdes.excWdes,andassumptions. • 30• Vendor Sohntations. 7 Proposals Received Winner: ForeFront Power — ❑ � Benefits of REAP Program • Proven: q5' California Public Agencies use REAP • z5�schooloistricts • io�CommunityCoLlegns .� • 5` Cities, Counties, Unlversities • Endorsed by CA CommurnTy College League • "Easy Button" • Solar.5torage. & EV Charging • CompeGtive Process • Exceeds Requlrements of Gov Cade qzi7 "'"' ` • Reduced Project Risk: U��,n..-,�� • Standardi�ed Pre-vetted PPA Contract ------ • S[andardized Pnang & Standardized Terms � • Favorable terms/condltlons RECs. annual performance guarantee, LDs, etc " E'J SPURR �� ,,o G.� n, � � .,� � '4�• � � .�., �...�u- �'� . �. ForeFront PoWer� � FQREFRONT � MITSUI&CO. E'J SPURR Best in Class Development Group California Public Sector Leader SPURR REAP Winner Renewable Project Financing Leader `A' Rated ParentCompany: Mitsui & Co � Povver Purchase Agreement • No upfront cost • o% Escalator for zo Years • Electricity Rate Stability • Monetize Federal Tax Credit • Aligned Partnership � �,� s�;:; sa� • Operations & Maintenance Induded • Guaranteed Performance '�` • Future Ovrnership FLexibiLity '�, Customer'�, —'�, Savings '�, Beforesolar AfterSolar � sr I s�: , .. I _� . � I,4��,,, I z��,,, I �,: �,r I SE�a�s I y,,� I=�,n�» I,=�=��I �a�o I��,;;, � $pilyl � 0'V: 9i9 � 1,636,]18 � 91?0 � $A01$99 � :Si083� � i'Vo � $I.S:. INi,i I--�'—�'s:.r.l�''rl�l f��'r:_�l'��".II'1'1f}'' � ��l�'�II�I �� ' '�f�e�l�f3[� �� '"' .� _ .,- �► d� � �� F: �� r n �� ,+�,� r-„�,+„V � �Green House Gas Equivalences 1636,778 kWh of electricity in Year 1 �-i 111 . Tree Seed li ngs -10 Years 19,180 � Barrels of Oil 2686 Railtar5 of Coal 6.4 � Acres ot Forest in 1 Year 1,421 Passenger Vehicle5 - 1 Year 252 �� ■I. Homes Energy Use 211 11 � SoLar Challenges: NEM 3.0 • Net Energy Metering • CPUC decides NEM 3�o in Jan zo22 • Lo�rvers value of exported energy • Secure Legacy NEM 2.0 • submit Ix Applications in zo2s • BwldSystemsAfter • zo Vear ofCor,per:z�or fo- exported sola� enc�gy • Impact: • Si.6M vs $-1.gM • Assumes NEM 3.o as currenlly proposed by SCE N�IllO�s.VfM C J�.;'iv=>fV r � sEo�._ �� s�,�,,, .. .�, , ,.,.. 12 Conclusions & Next Steps � ConcLusions � NEM3oJanuary'zz � SPURR • Joint Powers AuthanLy • GCq�i7.Complete<112F� � ForeFront Power • Experienced Deve.op-� • FinandallyStable � Palm Desert • Executable Pro�ec.-s • EnergySavings Next Steps � October z8 - City Council Informational � Noyember z8 - City Council q, i �„„ h� ��F. � . , � �~ ' � FOREFRONT POWER �,ppendices � Appendix: DeveLopment Diligence Design Drawmgs Perm¢s ]-12 Mon[hs Pmcurement Sreel Fabncation SfeelDeLvery Erec[ Columns & Purfins ModWes/Imertcrs/OCWinng 3�4Mon[hs MechamcalComplehon PTO&Commissioning 1-2Mon[hs CommerualOperabon • Key Issues: • IXAopLica-ion�tosecureNEM2o • Contract Negotiations Pre-negoGated via SPURR. • Commodi[y Pnang & SuppLy Chain • Construction CoordinaGon • ADA Upgrades • UGhty Upgrades 16 �i Y �.i� ' I� . � \ r "'s�►'� .'. . � � � _�.,� : , �•" �� ., .. .... «..1, ... , . Y�. °�i ,l p' r p �q� �y$� �! 'ilJl$.�.'Fr 't' ,r "� _� :�'� ..�- �_ , "E�,�,� ' _ _ - � �� . � .� _- � . -.e, - - _ `'� � Appendix: Excluded Sites �eser[ W Jlaw Gal! Remr[ JubM1ouse ]esert W illow Mamtenan[e dClllry �esert W illow Mam[enanre Fdclpty �ue� W�llow �ump S�atlon FireSYa[ion No 33 38995DESEPTWILLOWDP ��pgq�653 616 NOAvailable5paae P/LLM DCSCRi G� 92260 38]98PORIDLABPALM 994819 560 NOAvailable5paae I �6CRTCA92260 38]98PORTOIAAPALM 994.838 �ESERTLA93260 JOSBOCOONiPYQOBDRPALM 630.53] �ESERTCA93360 40600i0WNCENiERWAY 130,106 PALM DESEPT CA 92260 560 NOAvailable5pace d31 NOAvailahle5pace J3 NoAvailable5pa<e i8 Cash FloWs Project Cashtlows: Palm Desert, City Of vm1.� Ss onv �ns• ��Smyos[ YiWi �� s�is: ,��:s aaA�� o�iiYAYi wi Y an�M rAmn iei Y rimm�aius.mmions :v iYi Y Y �� WiAiY Project Cashtlows: Palm Desert, City Of vmk� n. Ssr�gu ��s+ Sumv,e<m YiLi �� •�iYM1�ii ��fiAn n/n� es m fi�Y naiY' rimm�aius.mmions 3r�w Yi.i� Alio Project Cashtlows: Palm Desert, City Of vmk� a. Sa� ��s= Sen zm YLLi �� u6Yi1 �i��r�iY Au �ai ns�u 53�9 e�ro iY.i � rimm�aius.mmions �x�i iniY di9i Project Cashtlows: Palm Desert, City Of vm1.� wa a Su S�a ��s+ Scc?s¢ uu�� ,• ...:.0 oaYY' .::s rimm�aius.mmions sss's srpn +i� - �� UtiLity Escalation Impact 20 YEAR SAVINGS VS UTILITY RATE ESCALATION SQ,soo,000 $q 3q480 $4,000,000 $3,6]6,326 53,500,000 53,245,632 $3,400,400 $2.840,]OS $2,500,000 $� a59,958 $2,101,900 $2,000,000 $1,]65,13� $1,Si2,13] Si,soo,000 Si,isqzaz $1,00q000 $869,813 $605,843 SSOOASO � � � .rF� .F�- � 10095 150%0 ]00% 2]0°/0 300%0 3.50% 40090 450= 5.00'I� SSOo 600Y9 U[ili1Ty Estalation Assump[ion z4 ►� � �°� �� .y � Clvic Cent�� -� .._...�.. ._._ _.__..�. _._.�.. �tl � ., Faa., � �/ n �� ,+�,- �„�+„V i:�