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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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Department of Public Works
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DATE:
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October 6, 2006
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BOARD MEETING DAT
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October 24, 2006
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SPECIAL NOTICE/HEARING:
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None
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VOTE REQUIRED:
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Majority
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TO:
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Honorable Board of Supervisors
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FROM:
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Neil Cullen, Director of Public Works
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SUBJECT:
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Hearing to Consider an Agreement with Bluepoint Energy, Inc., for Engineering, Procurement, and Construction of a Cogeneration System at the San Mateo County Health Campus (San Mateo County Medical Center and Health Services Building)
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Recommendation
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Adopt a resolution setting a time and date for a public hearing to consider an agreement with Bluepoint Energy, Inc., for Engineering, Procurement, and Construction of a Cogeneration System at the San Mateo County Health Campus.
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Vision Alignment:
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Commitment: Responsive, effective, and collaborative government.
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Goal 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.
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The construction of a cogeneration system to serve both the Medical Center and the Health Services Building will result in long-term energy savings and the reduction of green house gases.
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Background
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Previous Board Action
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Authorized:
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1)
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the construction of a cogeneration plant at the Maguire Correctional Facility (Facility) to reduce energy costs associated with maintaining the Facility;
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2)
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the County’s participation in the Sustainable Silicon Valley Initiative and committed to reduce carbon dioxide (CO2) emissions; and
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3)
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the Director of Public Works to apply for technical assistance from the California Energy Commission’s Energy Partnership Program to determine if a cogeneration system would be cost effective.
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History
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The County has taken several actions over the years to reduce energy consumption and the environmental impacts of county facilities and activities, and to improve air quality. In December 2004, the Public Works Department and the San Mateo Medical Center initiated a request for proposal (RFP) to explore the options for a performance-based design/build project to reduce annual utility costs at the San Mateo Medical Center. Several energy service companies submitted proposals in response to the RFP. However, fees appeared to be excessive and the corresponding recommendations in the proposals were not consistent with conclusions in a prior California Energy Commission (CEC) study. Therefore, staff concluded it was best to reject all proposals and request the CEC update their evaluation.
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Your Board then authorized us to contact the CEC for technical and financial assistance. The CEC concluded their evaluation and determined that a cogeneration system at the Health Campus would be eligible for CEC funding and provided a cost benefit analysis for this project.
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We then contacted the manufactures of cogeneration systems on the premise that dealing directly with manufacturers would result in lower costs. Two firms responded, United Technologies and Bluepoint Energy, Inc. (Bluepoint). United Technologies proposal was based on a fuel cell technology and has declined to submit a proposal on a reciprocating engine design due to air quality emission issues.
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Discussion
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Section 4217.10 et sec of the Government Code provides that a governmental agency may enter into an agreement to install energy saving systems after considering said agreement during a regularly scheduled public hearing.
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We are recommending that your Board set a date for a public hearing to consider entering into an agreement with Bluepoint to provide a cogeneration system on a “turnkey basis”, as Bluepoint was considered to be the qualifying bidder for this project based on the low initial cost, superior technology, high operating efficiency and compliance with Bay Area Air Quality Management District’s year 2007 CARB requirements.
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The following is a comparison of the cost estimates that we previously received for an alternate energy source for the Medical Center.
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Company
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Cogeneration Construction
Cost –Reciprocating Engines
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Submitted Date
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NORESCO
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$3,500,000
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December 1, 2004
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AMERESCO
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$4,457,377
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December 1, 2004
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CHEVERON TEXACO
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Not stated
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December 1, 2004
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HONEYWELL
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$2,927,143
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November 29, 2004
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California Energy Commission Evaluation Report
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$3,672,500
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July 1, 2006
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Bluepoint Energy, Inc.
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$ 1,894,000
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August 1, 2006
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United Technologies
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No response
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A resolution has been approved as to form by County Counsel.
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The Director of the Medical Center and the Health Services Director concur in our recommendation.
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Fiscal Impact
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There is no impact to the General Fund or any fund by setting the public hearing. An appropriation has been established in the 2006/07 Capital Projects Budget that is proposed to be financed by a CEC loan. The loan will be reimbursed from the savings realized from operating the cogeneration system. The Project may also qualify for a PG&E rebate of $414,000 at the completion of the project, which will further reduce the initial cost. We estimated that there will be energy savings of approximately $391,000 per year. The negotiated “not-to-exceed” cost of the system will be presented at the public hearing if your Board adopts the proposed resolution.
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