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Staff Report to the Mayor and City Council SCPPA PSA Mammoth Casa Diablo IV Energy Project November 28, 2018 Page 3 savings to CED of $1,191,360, or a total savings of $29,784,000 over the 25-year term of the PPA. The price per MW includes resource adequacy (RA) and environmental (renewable energy credits, or RECs). This is the lowest price geothermal project proposed to SCPPA. In comparison, CED is currently paying $80 per MW for baseload renewable energy from the Puente Hills Landfill Project. The $68 PPA price is higher than current proposals for solar PV; however, solar PV is only available during daytime hours, unless some form of storage is added to the facility which extends generation by 2 to 4 hours each evening but reduces energy production during the day. A recent analysis of solar PV with sufficient storage to essentially make the intermittent solar consistent with baseload shows the cost would be approximately $67 MW. The $68 MW price negotiated is reasonable and good for CED and its ratepayers. The SCPPA Board of Directors approved the Power Purchase Agreement and the Power Sales Agreements for Colton and Banning on October 18, 2018. The Colton Utilities Commission voted to recommend the City Council approve Resolution R-111-18 authorizing the participation in this Project on November 19, 2018. FISCAL IMPACTS CED’s entitlement will be 75% of the PPA energy. Whenever the facility is operating CED will be required to takes its share of the output at $68.00 MW. CED will pay onl y for the energy that is delivered at this fixed price. Since this is a power purchase agreement, Colton will not have ownership in the project and will not incur any capital expenditures. At full capacity, the total annual cost for energy, including RECs and RA, from this facility will be $8,935,200, for approximately 131,400 MWh. The Electric Department will include sufficient funds in its power supply budget in Fiscal Year 20/21 for the energy expected from this project. If the developer expects an earlier COD in April 2020, CED will include sufficient funds in the Fiscal Year 19/20 power resource budget. ALTERNATIVES Provide alternative direction to staff. ATTACHMENT 1.11-28-18 Resolution R-111-18 Mammoth Casa Diablo IV 2.PSA-Mammoth CD4 with PPA 6