11-28-2018 Spe Mtg Agn - Laserfiche WebLink

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Staff Report to the Mayor and City Council SCPPA PSA Mammoth Casa Diablo IV Energy Project November 28, 2018 Page 2 CED’s largest resource (30 MW), San Juan 3 Generation Station (SJ3) ceased operations in December 2017. CED had increased its procurement of renewable energy in advance of the SJ3 shutdown, as indicated in its Integrated Resource Plan (IRP), adopted in 2012 and updated in 2017. Since 2013, CED has entered into several PSA’s with SCPPA for renewable energy from various facilities, including 7 MW of solar PV from Astoria II, 3 MW of Solar PV from Kingbird B, and up to 10 MW of landfill gas from Puente Hills Gas-to-Energy Facility. CED also has four (4) Power Purchase Agreements (PPAs) for approximately 5 MW of solar PV on its distribution system (Colton Solar 1, Colton Solar 2, Gonzales Center Carport, and Arbor Terrace Community Solar). CED also has a PPA with Avangrid Renewables, LLC for up to 3 MW of wind generation from the High Winds facility, and 3.72 MW from the MWD Small Hydro facility. In February 2013, the City Council approved SCPPA Renewable Development Agreement, Phase II, allowing Colton to participate in the annual SCPPA Request for Proposal (RFP) process for renewable energy projects. Each year, various developers submit proposed renewable projects to SCPPA. SCPPA staff and the member utilities regularly evaluate the proposals and determine interest from the various members. If there is sufficient interest, SCPPA and the members begin negotiations with the developers for a power purchase agreement (PPA). The PPA is generally between SCPPA and the developer; however, each utility and its legal counsel are involved in the negotiation. In addition to the PPA, the project also involves a Power Sales Agreement (PSA) between SCPPA and each member utility, for each utility’s share of the project output. ISSUES/ANALYSIS CED’s 2017 IRP update identified the need for an additional 10 to 15 MW of baseload energy to meet its load forecast beginning in 2021. Ormat Nevada, Inc. (dba ORNI 50, LLC) submitted a proposal through the SCPPA RFP process for a 25 MW baseload renewable, geothermal, with resource facility, with resource adequacy (RA) attributes in Mono County, California. The capacity factor for the facility is approximately 95%. The facility will have a direct interconnection into the CAISO, allowing the energy from the facility to qualify as a PCC1 resource for RPS. CED staff evaluated the proposal and feels this project is a good fit for its resource portfolio because it is a baseload renewable resource, with RA, and qualifies as PCC1 energy for RPS compliance. The City of Banning Electric Department also identified this project as a good fit for their portfolio. Ormat’s proposal is for a minimum of 20 MW of energy from the facility. Colton can take up to 15 MW and Banning is willing to take up to 5 MW. Comme rcial operation date (COD) of the facility is July 1, 2021, with a possibility of an earlier Cod in April 2020. SCPPA’s staff and legal counsel, together with each staff from CED and Banning, entered into PPA negotiations in January 2018. At the onset, th e PPA price was $76.50 per MW. The SCPPA team has negotiated the price down to $68.00 per MW, for a 25-year term. This is an annual 511/28/2018 Council Agenda