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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
Department of Public Works
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DATE:
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April 1, 2010
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BOARD MEETING DATE:
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April 13, 2010
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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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James C. Porter, Director of Public Works
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SUBJECT:
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Memorandum of Understanding with Santa Clara County for Cooperative Purchasing Power for Solar Power Purchase Agreements
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RECOMMENDATION:
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Adopt a resolution:
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1.
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Approving the Memorandum of Understanding for Cooperative Purchasing Power with Santa Clara County to establish roles, rights and responsibilities between the parties in the Request for Proposal Process for a Power Purchase Agreement Provider on a regional-wide basis from March 10, 2010 through June 30, 2011, and
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2.
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Authorizing and directing the County Manager or the County Manager’s designee to execute the Agreement in substantially the form presented to this meeting with such non-substantive additions, clarifications and other changes as the County Manager or the County Manager’s designee deems necessary or advisable after consultation with County Counsel.
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BACKGROUND:
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A power purchase agreement (PPA) is an agreement whereby the County permits a third party to use County space to install solar power facilities. The third party then designs, constructs and operates power generation equipment in that space at their cost, and then sells the power generated to the County at an agreed-upon rate for a specified term. The concept of local agencies in San Mateo and Santa Clara counties working together to develop a Request for Proposal (RFP) for PPA providers, and thereby taking advantage of the cooperative purchasing power of many public agencies in this region, originated in the Joint Venture Silicon Valley Climate Protection Task Force almost two years ago. Santa Clara County took the lead and, after extensive research, determined that if cities and counties advertised on a collective basis, the participating agencies would realize savings in the neighborhood of 20-30%. The Santa Clara County Board of Supervisors approved and released their RFP on March 23, 2010. Nine other jurisdictions in addition to Santa Clara County have already agreed to participate in the first phase of the project, which will be a request for qualifications, where potential vendors must pass minimum criteria mostly relating to industry experience, and financial capability. Those that pass this qualification process then go on to the second phase of the RFP process, where they can bid on bundles of sites. The winning bidder will be awarded a contract on a bundle-by-bundle basis.
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Santa Clara County has advised that it expects to begin the second phase of the process in several months. The second phase will be a streamlined process, where the pre-qualified vendors (from the first phase) are directly offered the new site bundles.
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The County of San Mateo’s best interest would be served by participating in the second phase of the project, and the brief delay will enable the County to explore the benefits of participating in this joint project, and/or designing a project that is limited to the County of San Mateo. Adoption of this resolution will preserve the County’s option to participate in the second phase of the project.
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The Environmental Quality Committee has been advised on this project.
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There have been no prior board actions related to this proposal.
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DISCUSSION:
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As the lead agency in the collective solar RFP process, Santa Clara County has requested that agencies that are considering participation enter into a Memorandum of Understanding with them. As the format of the MOU is still evolving, staff is requesting that the Board authorize the County Manager or his designee to execute the MOU provided any changes are not substantive in nature.
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Additionally, Santa Clara County has asked that participants provide technical reports for each site proposed for solar power. These projects will be bundled by type and size and pre-qualified firms selected from the RFP process will be allowed to bid on one or more bundles. The Department of Public Works has contracted with Kenwood Energy to evaluate and provide such technical reports covering the San Carlos Airport, the Elections Building at Tower Road and the East Palo Alto Government Office Building. We anticipate the final reports by mid-April.
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County Counsel has reviewed and approved the Resolution and the MOU as to form, and will continue to do so as the MOU is refined.
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Approval of this action contributes to the Shared Vision 2025 outcome of an Environmentally Conscious Community through the production of clean, renewable energy.
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FISCAL IMPACT:
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There is a potential for significant savings in electrical energy costs if the bids come in as anticipated. However, there are no costs associated with the MOU nor does it commit the county to participate in a Power Purchase Agreement if the county deems it is not in its best interests. The cost for the technical reports will be approximately $5,000. If the County elects not to participate in the regional process, the technical reports would nevertheless be necessary if the County decided to pursue solar projects at these sites independently with general fund monies.
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