REPORT TO THE CITY COUNCIL
FROM: HENRY THOMPSON, Director of Aviation
Airports Department
BY: MARK W. DAVIS, Airports Planning Manager
Airports Department
SUBJECT
Title
Actions pertaining to Solar Energy Power Purchase Agreements with Energea Fresno LLC at Fresno Yosemite International Airport (Council District 4):
1. Adopt finding of a Categorical Exemption pursuant to Section 15301 of the California Environmental Quality Act Guidelines
2. Approve the Amended and Restated Solar Energy Power Purchase Agreement (SGIP) between Energea Fresno LLC and the City of Fresno for the 1,000 kW (AC) solar photovoltaic system
3. Approve the Amended and Restated Solar Energy Power Purchase Agreement (CSI) between Energea Fresno LLC and the City of Fresno for the 1,000 kW (AC) solar photovoltaic system under the CSI rules
Body
RECOMMENDATION
Staff recommends that Council adopt a finding of a Categorical Exemption pursuant to Section 15301 of the California Environmental Quality Act (CEQA) Guidelines and authorize the Director of Aviation to execute two Amended and Restated Solar Energy Power Purchase Agreements with Energea Fresno LLC for the solar photovoltaic system at Fresno Yosemite International Airport along with any subsequent documents, instruments, estoppel and acknowledgement certificates, etc., related to the Project.
EXECUTIVE SUMMARY
The Airport purchases power generated by an existing 2,000 kW (AC) photovoltaic (solar) system located south of McKinley Ave and east of Clovis Ave under two Solar Power Purchase Agreements (PPA) with MCP Solar Assets Partners II, LLC (System Owner). The facility has been operational for 13 years but was recently taken offline to resolve safety and reliability issues. The Department has negotiated an amended agreement with the System Owner that will upgrade and reactivate the system with modern panels and equipment providing enhanced safety, improved reliability, and reduce the cost of energy to the Airport for the next 20 years.
BACKGROUND
The City of Fresno Airports Department made history in 2008 by going online with the largest solar photovoltaic system installed at an airport in the United States under a Power Purchase Agreement (PPA) with WorldWater & Solar Technologies, Corp. who was selected to design, install and maintain the System through a competitive request for proposal process in November 2006. The PPA has been assigned, amended, and restated several times over the years as the program moved from a focus on design and construction to ongoing maintenance, operations, and administration and to facilitate refinancing on the part of the System Owners.
The current System Owner proposes to assign the existing Solar Energy Power Purchase Agreement (PPA) to Energea LLC contingent upon execution of an amendment to the PPA which will extend the term an additional 20 years and reduce the cost of electricity to $0.11/kWh with no escalation. The new cost per kWh is lower than the existing average PPA rate of $0.163/kWh and the current PG&E rate of $0.162/kWh resulting in immediate savings to Airports. This proposed new cost of electricity is substantially lower than under the 2008 solar agreements due to advances in solar technology and efficiency, availability and cost of materials, and reuse of previously installed infrastructure. Included in the amended PPA rate calculations are all costs to design, finance, construct, implement, operate, and maintain the reactivated Photovoltaic Solar Energy System at FAT. There are no costs to the Department for reactivation of the system. Reactivation of the existing solar system will result in over $185,000 of utility savings in the first year and is projected to save $6.2M over the 20-year life of the agreement. This initiative is consistent with Airports ongoing commitment to sustainability and fiscal responsibility.
ENVIRONMENTAL FINDINGS
This Agreement falls within the Class 2 Categorical Exemption for Replacement or Reconstruction set forth in California Environmental Quality Act (CEQA) Guidelines, Section 15302, as it involves negligible or no expansion of capacity. Furthermore, none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to this project.
LOCAL PREFERENCE
Local Preference was not implemented because this item is an amendment to an existing agreement.
FISCAL IMPACT
The utility savings will have an immediate and long-term positive impact on FAT’s ongoing O&M costs, which supports Airports initiative to grow net revenue through prudent fiscal management and the operational ability to accommodate local and regional demands. There is no impact to the General Fund or City of Fresno rate payers from this action.
Attachments:
1. Amended and Restated PPA Energea (SGIP)
2. Amended and Restated PPA Energea (CSI)