COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

February 26, 2004

BOARD MEETING DATE:

March 23, 2004

TO:

Honorable Board of Supervisors

FROM:

Neil R. Cullen, Director of Public Works

SUBJECT:

Installation of a Cogeneration Plant at the Maguire Correctional Facility - Redwood City Area

Recommendation

Adopt a resolution adopting plans and specifications, determining prevailing wage scales and calling for sealed proposals for the installation of a 300-kilowatt (kw) cogeneration system at the Maguire Correctional Facility.

Key Facts

1.

Energy savings, and therefore cost savings, can be realized for facilities like the Maguire Correctional Facility, which are operating on a 24-hour-a-day 7-day-a-week schedule, by installing a system (cogeneration) that generates electricity and uses the waste heat from the electrical generation to heat the facility and provide hot water.

2.

An independent consultant has confirmed the energy savings associated with the installation of a cogeneration unit at the Maguire Correctional Facility.

3.

Cogeneration is also planned as part of the Youth Services Center at Tower Road.

Discussion

Electrical power for the Maguire Correctional Facility (Facility) is currently purchased from PG&E; and natural gas that is used by the Facility's water heaters to provide space heating and domestic hot water for the Facility is purchased through a cooperative agreement administered by the Association of Bay Area Governments (ABAG). PG&E delivers the natural gas and charges a transportation surcharge.

We evaluated and are recommending that a cogeneration system (a gas fired engine and generator set) be installed to reduce the energy costs at the Facility. The cogeneration system will generate electricity and therefore reduce the amount of PG&E power to be purchased. The heat from the engine's exhaust will concurrently heat water through heat exchangers. This hot water can then be used to pre-heat the existing space heating and domestic hot water systems thereby reducing the load on the natural gas-fired water heaters.

Vision Alignment

We believe our recommendation is consistent with Goal Number 20, "government decisions are based on careful consideration of future impact rather then temporary relief or immediate gain" of the Shared Vision Commitment to be a "responsive, effective and collaborative government," as the short term cost of the cogeneration system will be offset by a long term reduction in energy usage as well as reduced energy costs.

Fiscal Impact

The project qualifies for energy rebates from PG&E which are received on a reimbursable basis and after the total cost of the project is known. The total cost of the installation including engineering and contract administration is currently estimated at $750,000. However, only $526,200 was appropriated in the 2003/04 Capital Projects budget to finance this work. We are recommending that your Board adopt the resolution calling for bids in order that the total cost can be estimated based on the actual bids received, and the amount of rebates can be more precisely calculated. We will present an Appropriation Transfer Request (ATR) to your Board for your consideration and identify the source of additional funding including the energy rebates, concurrently with a recommendation that a contract be awarded for the project.

The current energy bill for the Maguire Facility is approximately $730,000 per year. We estimate that the system will be operational approximately 91 percent (91%) of the time (8,000 hours per year) and will produce approximately 52 percent (52%) of the Facility's annual electrical demand, and the heat from the natural gas used by the cogeneration engine will also reduce the consumption of natural gas used to fire the water heaters. We conservatively estimate a savings of $200,000 annually in energy avoidance costs and have factored these savings into the proposed facility charges for the coming fiscal year.

There should be a net positive impact to the General Fund as facility charges are financed in part with General Funds.

A form of resolution has been approved by County Counsel.