Item 4.2 - Award of Contract to Baker Electric, Inc.; Bid No. 17-008 � j OF 'ow,
APPROVED •
0C OF City of Poway APPROVED AS AMENDED ❑
(SEE MINUTES)
Tti �i COUNCIL AGENDA REPORT DENIED ❑
gym'IN THE COJe REMOVED ❑
CONTINUED
RESOLUTION NO.
DATE: February 21, 2017
TO: Honorable Mayor and Members of the City Council
FROM: Robert Manis, Director of Development Services M
CONTACT: Christine Pawlik, Conservation Administratoq�,�
(858) 668-4605, cpawlik @poway.org VV11
SUBJECT: Award of Contract for the Carport Mounted Photovoltaic
System — PCPA/PUSD Parking Lot, Bid No. 17-008
Summary:
In April 2016, the City Council set aside funding to pursue energy efficient systems to
reduce energy costs at City facilities. The installation of a carport mounted photovoltaic
(PV) system near the Poway Center for the Performing Arts (PCPA) would produce
renewable energy to offset the electrical charges at the PCPA. The PCPA is a joint-use
facility between the City and Poway Unified School District (PUSD). PUSD owns the
parking lot property and its permission is needed before the installation of the PV system
can occur. Separate from this item, the City and PUSD are currently negotiating the terms
under which such permission can be granted.
Recommended Action:
It is recommended that City Council:
1. Award the project to Baker Electric, Inc. for the design and construction of a
carport mounted PV system to be located in the parking lot west of the PCPA and
north of Titan Way. This award is subject to PUSD approving the City's use of the
parking lot for such purpose, for the term of the PPA (25 years).
2. Appropriate $8,000 from capital facilities improvement fund, 0106-8912, for fees
to SDG&E including but not limited to a generation output meter, system
upgrades, and application fees.
3. Authorize the City Manager to execute a PPA in a form satisfactory to the City
Attorney and subject to PUSD approving the City's use of the parking lot.
Discussion:
During the January 28, 2016, City Council workshop, staff presented energy efficient
options and received Council feedback. Council support for energy efficient projects was
confirmed on April 19. With assistance from a consultant, staff began to explore multiple
options to move the City towards the goal of reducing energy costs.
Staff compiled a list of City facilities with the highest electricity costs to determine the
optimal choice for each site. During the exploration phase, the PCPA was determined to
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Award of Contract for the Carport Mounted Photovoltaic System — PCPA/PUSD Parking
Lot
February 21, 2017
Page 2
be the second largest energy consumer. This PV system will supply most of the electricity
necessary to operate the facility. This solution also allows for the addition of other energy
efficient technologies in the future.
Building a PV array in the form of a carport connecting to the PCPA electrical meter allows
for the generation of large amounts of energy at the site that can be transferred directly
to PCPA electric bills. Overgeneration during daylight hours will be credited back to the
PCPA through bill credits. SDG&E's Renewable Energy Self-Generation Bill Credit
Transfer (RES-BCT) tariff allows for bill credits on up to 50 accounts within the City for
the overgeneration of renewable energy.
A request for bids (RFB) was issued and evaluated for a carport PV array in the parking
lot. The RFB required submission of two (2) pricing options: the first option is for a
traditional design-build project with the City responsible for payment to the contractor for
the PV system that would be owned by the City; the second for the construction of a PV
system by a vendor, who would then sell the generated power to the City at a reduced
price for a fixed term through a PPA. A PPA is a financial arrangement whereby the
contractor designs, finances, installs, owns, and maintains the PV system at little to no
cost to the customer. The customer then purchases the system's electricity from the
contractor. This arrangement allows the customer to receive stable, low-cost electricity
while the contractor acquires tax credits and income from the sale of electricity
generation.
Bids were opened on November 3, 2016. The City received the following three bids:
Company System Cash Price 25 Year PPA Leveled Cost
Size (kW Price ($/kWh) of Energy
DC) ($/kWh)
Baker Electric, Inc. 693.75 $2,238,561.00 0.1029 0.137
Sunworks United, Inc. 592.05 $1,650,000.00 0.1375 0.151
Borrego Solar 823.50 $2,477,675.00 0.1220 0.163
Systems, Inc.
While the opportunity for savings with the traditional design-build option was determined
to be slightly better than a PPA, the risk of an SDG&E tariff escalation, lack of
performance guarantee, and operating and maintenance costs led to the determination
that the PPA option provided the largest return on investment with less risk.
Under the proposed PPA, the City must purchase all energy produced by the PV system
and the contractor provides guaranteed energy production. The system is not expected
to generate 100% of the PCPA's energy needs, so the City will still need to purchase
some energy from SDG&E as well as pay taxes, fees, and nonbypassable charges. The
per kilowatt hourly rate is established at the beginning of the contract and will escalate at
a rate of 3% each year over the 25-year term of the PPA. The City would have the option
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Award of Contract for the Carport Mounted Photovoltaic System — PCPA/PUSD Parking
Lot
February 21, 2017
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to purchase the system at a future date.
Because the PCPA is a joint-use facility, and because PUSD owns the parking lot on
which the PV system is proposed to be installed, the City expects to share some portion
of the electricity cost savings with PUSD. The mechanism for such sharing is still being
discussed, as is the proportion of the shared savings. Staff may need to return to Council
at a future date to obtain approval of an agreement regarding cost savings.
The contract time for this project is estimated at 235 working days. Using a PPA, the
City's estimated costs are $8,000 for SDG&E fees and equipment modifications. Design
is scheduled to be completed in early May 2017. Construction is scheduled from June to
August 2017, during the PUSD summer recess, with final commissioning in November
2017.
Environmental Review:
The project, which involves the award of a design/build contract and construction, is
exempt from the provisions of the California Environmental Quality Act (CEQA), pursuant
to Section 15303 of the CEQA Guidelines, in that it involves limited new construction of
accessory structures (i.e. solar shade canopies which also serve as carports) in a
developed parking lot.
Fiscal Impact:
Approval of staff recommendation authorizes the appropriation of$8,000 from the capital
facilities improvement fund (0106-8912) to the Carport Mounted Photovoltaic System —
PCPA/PUSD Parking Lot project account.
The estimated combined City and PUSD SDG&E electric bill savings will be $125,804
annually, based upon bills and tariffs for the 2015 calendar year. The division of City and
PUSD savings has yet to be determined.
Public Notification:
Baker Electric, Inc., 1298 Pacific Oaks Place, Escondido, CA 92029
Attachments:
None.
Reviewed/Approved By: Reviewed By: Approved B :
&CY1(
Wendy Kaserman Morgan Foley Tina M. White
Assistant City Manager City Attorney City Manager
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