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Home My WebLink About03. (Handout) Regional Renewable Engergy Procurement UpdateRegional Renewable Energy Procurement (R -REP) Update December 9, 2014 Engineering & Operations r'r% vmrvmi ++on Moc +incf .. Protecting Public Health and the Environment R -REP Timeline (4/21/14) E &O Committee (1/10/13) CCCSD recommended staff Board Authorized continue to evaluate sites (9/22/14) Staff GM to execute and agreed on triple update to E &O MOU with R -REP bottom line approach Committee Optony, Inc. Completed CCCSD Solar Feasibility Study R -REP RFO/RFP led by Alameda County (19 agencies, 180+ sites, >30MW) per CA Govt Code 4217.12 Sun Edison selected for bundle with CCCSD sites R -REP Group PPA negotiations R -REP Timeline (12/18/14) Staff Presentation & Request Board (12/4/14) Board Authorization to Set Public Hearing Date Meeting vote to "table" setting (1/8/15) Board of public Meeting to consider hearing date award of PPAs * 20 -Year PPA Term (approx.) Nov 2014 Dec 4 j Design and (11/24/14) Staff (12/9/14) Staff Construction Update & E &O Presentation & Phases (approx.) Committee E &O Committee recommended review of Position setting public Paper to consider hearing date awarding PPAs How do Solar PPAs work? Facility's Power Demand (kWh) 100% 1 <30% 1 1 >70% Power Power Power PG &E 100% of Power Costs Without PPA PG &E % of Power Cost Varies Each Year OR Solar PPA % of Power Cost Varies Each Year With PPA * 1sr Year Estimates are -5% PG &E, -95% PPA How do Solar PPAs work? • Current PG &E rate schedules --> "Solar- friendly" PG &E rate sch. � Higher peak pricing during export, no demand charges • Optimal sizing and savings varies by site - specific factors: Power demands (time of use) Solar production (site constraints, degradation) Rate schedules & PPA pricing • Ideal sizing results in: Solar used during peak demands (PPA pricing < PG &E pricing) Imported PG &E for off -peak demands (PG &E pricing < PPA pricing) Ideal sizing generally -- 70 -90% of annual demand r Avoided over - production (PG &E compensation << PPA pricing) Lower overall power costs ( "solar- friendly" PG &E costs + PPA costs < PG &E w/o PPA costs) r Savings Escalate Over Time as PPA Escalates Less than PG &E Escalation Collection System Operations Building Annual Energy Use, kWh 285,M 211115�1= Proposed Solar System Size, kW - t.i Year 1 Solar Z Output, kWh 21%404 Yearl Energy Offset w/Solar PPAs dependent on CSO inclusion Year I Electricity $51,814 $48,M1 Costs 20 -Year Levelized Cost of Electricity: , Without PPA = $0.199 /kWh Electricity Costs $1,137,666 $9M,901 With PPA = $0.165/kWh Savings increase as PG &E escalates ' at higher rate than PPA (2 %/year) NPV Savings N/A $MT65 12/9/2014 El Vehicle Maintenance Shop tt ✓i^ try 20 -Year Levelized Cost of Electricity: Without PPA = 50.229 /kWh With PPA = $0.187/kW h * Savings increase as PG &E escalates at higher rate than PPA (2 9/o/year) Key PPA Terms • Agreement Length: 20 -year + 5 -year optional (re- negotiate) • Purchase Option: Fair market value after -6 years, 3 months • Production Guarantee: 90% of the expected output • Early Termination Fees: If District terminates without cause (from $6.63- $8.59/W in 15t year to $1.53- $1.85/W in 20th year) • Removal Fund: Sun Edison establishes reserve fund for removal of the solar systems and restoration of facilities • Project Management Funding: - $30,000 included in PPA for District project management costs • Maintenance: Sun Edison, Inc. responsible for all maintenance including routine cleaning of the panels • Energy Pricing: Includes 2 percent per year fixed escalator • Permitting: Sun Edison responsible for permitting (except CEQA) Energy Cost Savings Minimal Savings Energy Price Stability Early Termination Fees High Visibility to Public Unforeseen Costs Aligns w /Strategic Plan No Grants or Rebates Available (Goal Four, Strategy 1) "Green" Power: 200 tons Site Constraints CO2 /year reduction Grandfathered into Net Metering Cannot Predict PG &E Rates Tariffs prior to NEM 2.0 Reduced Effort using R -REP Solar Vendor Owns Environmental Credits Lower Pricing w/ R -REP Potential Liabilities * 12/9/2014 0 Summary • Payback not applicable to PPAs (panels owned by solar vendor) • 3 Sites, -- $300,000 20 -year savings, -195kW • Financial savings are marginal • Aligns with Triple Bottom Line direction (no estimated increased energy costs, social & environmental benefits) • Risk -based decision to move forward (do Triple Bottom Line benefits outweigh potential risks ?) • Continued contract negotiations with Meyers Nave • CSO system must be included for HHW and VMS to move forward • Schedule driven by target NTP by February 28, 2015 for potential 3% bundle discount Next Steps • 12/9/14 E &0 Meeting: • Present R -REP project • Obtain Committee recommendation to continue w/ R -REP solar PPAs • Obtain Committee recommendation to continue previously "tabled" Board Item to Set Public Hearing Date (for 12/18/14 Board Meeting) • Obtain Committee recommendation to proceed with Position Paper to Hold Public Hearing (for 1/8/15 Board Meeting) • 12/18/14 Board Meeting: • Present R -REP project • Obtain Board authorization to Set Public Hearing Date for 1/8/15 (previously `tabled" Board Item) • 1/8/15 Board Meeting: • Hold Public Hearing to Consider Award of PPAs BACKUP SLIDES Key Assumptions • Utility Rate Escalation: 4% per year • Net Present Value Calculation: 3% discount rate, 20 years • Solar Degradation: 0.5% per year $0.2100 $0.1900 $0.1700 z $0.1500 3 '^ $0.1300 $0.1100 $0.0900 $0.0700 PG &E prices per kWh for Representative Commercial Facilities 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year -E -195 -A -6 - A -1TOU -A -10TOU -E -205 12/9/2014 y Year 1998 A-6 %Increeee A -1TOU S 0.1289 %Ineroase A -IOTOU %Incrtas� $ 0.0984 $ 0.1034 1999 $ 0.1034 0.00910 $ 0.1289 0.00%115 0.09941 0.0090 2000 $ 0.1034 0.01% $ 0.1289 0.009b 5 0.0984 I 0.0090 2001 $ 0.1402 35.61% $ 0.1662 28.9690 $ 0.1339 36.11% 2002 $ 0.1593 13.60% $ 0.1856 11.6990 $ 0.1541 15.0990 2003 $ 0.1593 0.0MI $ 0.1856 0.005yo 5 0.1541 0.009 2004 2005 $ 0.1408 $ 0.1262 - 11.60% - 10.41% 5 0.1672 $ 0.1531 -9.92% -9.43%1 JS 0.1426 -7.46% $ 0.1393 -2.30% 2006 $ 0.1393 10.41°% S 0.1590 3.81% S 0.1471 5.61% 2007 $ 0.1409 1.16% S 0.1622 2.04% S 0.1452 -1.2 2008 $ 0.1543 9.521% 5 0.1620 -0.14% S 0.1372 -5.52% 2009 2010 $ 0.1644 $ 0.1798 6.52% 9.35%1 $ 0.1724 $ 0.1790 6.44% 3.80% S 0.1538 12.08% S 0.1596 3.80% 2011 $ 0.1802 0.25% $ 0.1781 -0.48% $ 0.1571 -1.5994 2012 S 0.1834 1.80% 5 0.1818 2.09% S 0.1568 -0.181/. 2013 2014 $ 0.1929 $ 0.2005 5.16% 3.93'': $ 0.1891 S 0.1920 4.019 $ 0.1648 5.09% $ 0.1702 3.280% 1.54% Annualized % Escalation (since 2000) 4.84% 2.891/6 3.99% 12/9/2014 y O &M Included • Continuous remote monitoring and alarming to detect irregularities early • Remote diagnostic capabilities and performance analysis d • Remote controls of system • Preventative maintenance schedule: • Mechanical: 2 visits per year • Electrical: 2 visits per year • Cleaning/Corrosion Checks: 2 per year (min)