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Home My WebLink About2017-10-17; City Council; ; Adopt a Resolution authorizing the city manager to sign the Letter of Commitment to provide a demonstration site and match funding for the Advanced Microgrid Demonstration Business Case Grant Funding OpportunityCA Review --- CITY COUNC IL · Staff Report Meeting Date: To: From: Staff Contact: Subject: Oct. 17, 2017 Mayor and City Council Kevin Crawford, City Manager Michael Grim, Senior Programs Manager/CAP Administrator mike.grim@carlsbadca.gov or 760-602-4623 Adopt a Resolution authorizing the city manager to sign the Letter of Commitment to provide a demonstration site and match funding for the Advanced Microgrid Demonstration Business Case Grant Funding Opportunity. Recommended Action Adopt a Resolution authorizing the city manager to sign the Letter of Commitment to provide a demonstration site and match funding for the Advanced Microgrid Demonstration Business Case Grant Funding Opportunity (GFO). Executive Summary The California Energy Commission is offering a GFO for up to $5 million for a microgrid project, with a minimum 20 percent matching requirement. A local jurisdiction hosts a demonstration site and their partners apply for the grant and manage the project design and implementation. For this GFO, Cleantech San Diego has offered to apply for the grant if the City of Carlsbad provides a demonstration site and a minimum 20 percent matching contribution. TRC Energy would be the project manager and prepare the GFO application materials. The city would be a project partner by providing a "host site" for the demonstration project. City staff has been working with SAN DAG and its energy engineering consultant, TRC Energy, to prepare a feasibility study for a microgrid at the City of Carlsbad Safety and Service Center complex ("Complex"). Preliminary results indicate that a microgrid is feasible at that location and would result in energy savings of over one megawatt hour per year. The system would also reduce the city's greenhouse gas emissions and provide municipal leadership for innovation in the community. Discussion The Climate Action Plan includes city actions to reduce energy consumption, develop renewable energy projects and provide electric vehicle charging infrastructure, all of which a microgrid can help accomplish. A microgrid is a self-contained and managed energy system that serves a group of buildings or facilities and typically contains energy generation and storage. It provides for energy savings through advanced control of electrical load and generation. The microgrid can be disconnected October 17, 2017 Item #1 Page 1 of 7 from the electrical grid, also known as islanding, thus providing for energy resiliency in case of outages on the main electrical grid. The city has an opportunity to provide a location for a microgrid demonstration site for a California Energy Commission grant. The Complex contains the city's Emergency Operations Center, Police Department headquarters, Fire Department headquarters, Fire Station 5 and the Fleet Maintenance Center. All of these facilities provide critical services to the community and need to remain in operation during emergencies. The Complex will also be the location for the new Public Works Maintenance and Operations Center that will house personnel and vehicles that maintain and repair the city's essential services and infrastructure. The benefits of a microgrid at the complex include: the ability to maintain electrical service in emergencies, better control of energy consumption, energy generation and storage, and reduction of greenhouse gas emissions. These benefits closely align with the city's Sustainability Guiding Principles, the Community Value of Sustainability and the Climate Action Plan. The California Energy Commission grant offers up to $5 million to an applicant that can team with project partners to demonstrate the business case for deploying an advanced microgrid. The intent is to show that microgrids can be installed in a variety of locations to address issues in grid demand, provide resiliency during outages and further the need for greenhouse gas emissions reduction. For the potential microgrid project, Cleantech San Diego has offered to be the applicant to the California Energy Commission and would process all grant funding. Firms providing design, construction and equipment would contract directly with Cleantech San Diego. The city would also be a project partner, providing the site for the demonstration project and the matching contribution requirement of 20 percent, which may be met through already planned and/or budgeted city projects. According to the California Energy Commission standard grant agreement, the California Energy Commission will have title to all equipment acquired with grant funds. The grant agreement allows the California Energy Commission to either authorize continued use of the equipment, allow the Cleantech to purchase the equipment for its residual value, or request delivery of the equipment to California Energy Commission. The final status of equipment will be determined at the conclusion of the grant period. Fiscal Analysis The Letter of Commitment would bind the city to provide matching contributions if this project is chosen for grant funding. Matching contributions may include energy efficiency improvements to existing buildings at the complex, inclusion of photovoltaic solar panels, and electric vehicle charging infrastructure on the future Maintenance and Operations Center. Staff time spent working on the project during the grant period would also be considered part of the matching contribution. There are adequate funds budgeted in the current Capital Improvement Program budget to allow commitment of the matching contributions. Potential projects include energy efficiency October 17, 2017 Item #1 Page 2 of 7 improvements at the Safety Training Center and solar panels and electric vehicle charging stations at the future Maintenance and Operations Center. These are expected to exceed the 20 percent matching contribution requirement and will increase the competitiveness of the grant application. Next Steps If City Council authorizes signature of the Letter of Commitment, the following steps would occur: • On or before Oct. 20, 2017, the city submits the Letter of Commitment to Cleantech San Diego to include in their GFO application • The California Energy Commission conducts a review and selects applications for awards • In January 2018, the California Energy Commission notifies the grant award recipients • If selected, city staff presents the results of the grant award to City Council • In June 2018, the California Energy Commission and Cleantech San Diego execute the grant agreement • Cleantech San Diego, TRC Energy, City of Carlsbad and other project partners enter into a project agreement • Project partners pursue the project and provide monitoring and reporting information to the California Energy Commission for the duration of the grant period Environmental Evaluation (CEQA) This action (authorizing a Letter of Commitment to provide a demonstration site and contribute matching funding) does not constitute a project under CEQA Guidelines section 15352(a) because it does not commit the city to a particular course of action regarding the project. If the grant is awarded and the microgrid project is pursued, the project would undergo environmental review, if required, in association with the applicable city-issued discretionary permit(s). Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for public viewing and review at least 72 hours prior to the scheduled meeting date. Exhibits 1. Resolution authorizing the city manager to sign the Letter of Commitment to provide a demonstration site and match funding for the Advanced Microgrid Demonstration Business Case Grant Funding Opportunity. October 17, 2017 Item #1 Page 3 of 7 RESOLUTION NO. 2017-199 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO SIGN THE LETTER OF COMMITMENT TO PROVIDE A DEMONSTRATION SITE AND MATCH FUNDING FOR THE ADVANCED MICROGRID DEMONSTRATION BUSINESS CASE GRANT FUNDING OPPORTUNITY. EXHIBIT 1 WHEREAS, the City Council of the City of Carlsbad, California, approved a Climate Action Plan on Sept. 22, 2015 (Reso. No. 2015-244); and WHEREAS, the Climate Action Plan calls for the city to reduce energy consumption, develop renewable energy projects and provide electric vehicle charging infrastructure; and WHEREAS, a microgrid is a managed energy system that usually contains renewable energy projects and electric vehicle charging infrastructure and can reduce energy consumption; and WHEREAS, the City of Carlsbad Safety and Service Center ("Complex") provides critical public services, such as the Emergency Operations Center, Police Department headquarters, Fire Department headquarters, Fire Station 5 and the Fleet Maintenance Center; and WHEREAS, the Complex will be the location for the new Public Works Maintenance and Operations Center, which will house personnel and vehicles that maintain and repair the city's essential services and infrastructure; and WHEREAS, the continued operation of the Complex in times of local or regional electrical grid failure is essential to the continued provision of critical services to the community during an emergency; and WHEREAS, a microgrid at the Complex would allow for electrical generation, storage and use independent of the San Diego Gas & Electric grid; and WHEREAS, having a microgrid at the Complex would allow for continued electrical service during emergencies for continued provision of critical services to the community; and WHEREAS, the California Energy Commission is offering a grant funding opportunity for up to $5 million to demonstrate the business case for advanced microgrid deployment in the State of California; and WHEREAS, Cleantech San Diego has offered to apply for the grant if the City of Carlsbad provides a demonstration site and fulfills the 20 percent matching contribution requirement; and October 17, 2017 Item #1 Page 4 of 7 WHEREAS, the city's matching contributions may include energy efficiency improvements to existing buildings, inclusion of photovoltaic solar panels and electric vehicle charging infrastructure on the future Maintenance and Operations Center, and/or staff time; and WHEREAS the estimated cost of the energy efficiency improvements, solar panels and electric vehicle charging is approximately $2.1 million, which exceeds the 20 percent matching contribution requirement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. 2. That the above recitations are true and correct. That the city manager is authorized and directed to sign the Letter of Commitment to the California Energy Commission, which is attached hereto as Attachment A. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 17th day of October, 2017, by the following vote, to wit: AYES: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. NOES: ABSENT: None. None. (SEAL) October 17, 2017 Item #1 Page 5 of 7 Oct. 18, 2017 TO: California Energy Commission {city ofCarlsbad REFERENCE: GFO 17-302-Demonstrate Business Case for Advanced Microgrids in Support of California's Energy and GHG Policies SUBJECT: Letter of Commitment for the City of Carlsbad to provide Demonstration Site and Contribute toward Match Funding To Whom It May Concern: The City of Carlsbad is excited to provide this Letter of Commitment for Clean Tech San Diego and TRC Energy's Grant Funding Opportunity (GFO) application for the proposed development and deployment of a clean microgrid at our City of Carlsbad Safety and Service Center complex (Complex) home to critical public safety operations. The purpose of the microgrid will be to demonstrate the replicable business case for all municipalities, particularly those along the coastal zones, of the commercial use of microgrids that save energy and valuable financial resources; respond to regional and wide-scale utility grid demands; provide invaluable support for resiliency and continuity of operations in the event of grid outages; and achieve city and state climate action planning goals with the ongoing reduction of greenhouse gas emissions. The City of Carlsbad has adopted and promoted several Sustainability and Environmental Guiding Principles, which include a long standing commitment to preserving and protecting the high quality of life enjoyed in Carlsbad for generations to come through sound procurement decisions; continually exploring investments in energy efficiency projects and deployment of renewable energy resources; and consistently promoting the social, economic, and environmental factors that contribute to a sustainable community. The City of Carlsbad is an active participant in the North County (San Diego) Coastal Energy Collaborative along with the neighboring cities of Oceanside, Encinitas, Del Mar and Solana Beach. We are presently engaged with the San Diego Association of Governments (SANDAG) to implement important energy efficiency projects identified in an Energy Roadmap prepared in October 2014. We prepared our Climate Action Plan (adopted in September 2015) concurrently with updating the city's General Plan, so that all policies are consistent with the Community Vision. Our interest in partnering with Clean Tech San Diego and TRC Energy for this GFO is fully aligned with our objectives, as stated in the following Community Vision Core Value: Office of the City Manager City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2820 t October 17, 2017 Item #1 Page 6 of 7 Core Value 6: Sustainability: Build on the city's sustainability initiatives to emerge as a leader in green development and sustainability. Pursue public/private partnerships, particularly on sustainable water, energy, recycling and foods. We share the CEC's objectives to reduce peak demand, electricity and gas usage, and greenhouse gas (GHG) emissions in California. The City of Carlsbad is committing to the field deployment of the clean microgrid at the Complex, which includes the city's Safety Center, Safety Training Center, a Fire Station, Fleet Maintenance Center, and a planned Maintenance and Operations Center, as proposed by the Clean Tech San Diego/TRC Energy partnership. We look forward to integrating solar generation, battery storage, energy efficiency projects, cogeneration capabilities, microgrid controls that will allow efficient and effective demand response capabilities and other potential projects such as integration of electric vehicle-to-grid technology, to create a replicable advanced microgrid that will serve as an example for municipalities throughout the State of California. The Complex contains facilities that provide critical services to the community and making the complex more resilient is a great benefit. We are able to commit to providing the site energy data and allow installation of the technology/ies and energy metering equipment. The City of Carlsbad will ensure that the facilities remain accessible for collection of performance information, as well as the maintenance and optimization of the equipment, throughout the demonstration period. Proposed match funding, which may be a combination of energy efficiency, renewable energy and electric vehicle charging project costs and rebates, equipment, materials and information technology services, will be included in our internal budgeting requests for fiscal year 2018-19. We are also prepared to contribute staff time and consultant expenses towards the required matching funds. We are prepared to commit that if the grant is awarded for this project, but it is later determined that our proposed match funding is not approved by the California Energy Commission, we will work with our Clean Tech San Diego, TRC Energy and other partners to make all possible attempts to obtain alternative replacement funding. We applaud the California Energy Commission for its innovative research program and look forward to seeing practical and viable benefits emerge for California's energy programs, as well as its economy, from this project. This demonstration testing has the potential to demonstrate the sustainable benefits of both the City of Carlsbad's and the CEC's investments. Thank you for your consideration. We look forward to participating in this unique and valuable opportunity. SW Kevin wfor'l'J'"----- City Manager City of Carlsbad Office of the City Manager City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2820 t October 17, 2017 Item #1 Page 7 of 7 Microgrid Demonstration Grant Funding Opportunity Mike Grim, CAP Administrator October 17, 2017 Climate Action Plan •Reduce GHG emissions from city operations –Increase energy efficiency in buildings –Provide more renewable energy –Provide electric vehicle charging stations Microgrid Feasibility Study •Study preparations began in Feb. 2017 •Multiple city divisions participated in data collection •Project kick-off meeting held in June 2017 •Preliminary results received in Sep. 2017 Safety and Service Center •Critical services •EOC •Police Department headquarters •Fire Department headquarters •Fire Station #5 •Fleet Maintenance Center •Future M&O What is a Microgrid? •Generate and store energy within a self- contained system •Control energy distribution into and within the system •Disconnect from SDG&E grid during blackouts or emergencies M icrogrid design Utility Grid Energy Generation Energy Usage Energy Storage Why Use a Microgrid? •Reliability and resiliency •Energy cost savings •Greenhouse gas emissions reductions California Energy Commission Grant •Part of CPUC EPIC program to invest in clean energy technologies •Demonstration of business case for microgrids •Up to $5 million with minimum 20% match •Applicant, project partners, demonstration site Project Partners •Cleantech San Diego is applicant •TRC Energy is project manager •City is project partner –Provide demonstration site –Provide matching contribution Matching Contribution •Expected to meet 20% minimum through: –Planned energy efficiency improvements at Safety Center –Proposed solar PV and EV charging stations at future Maintenance and Operations Center –Vendor cost sharing Next Steps •Cleantech submits application with city signed Letter of Commitment •CEC reviews applications and awards grant •If awarded, return to City Council with project agreement and begin project Recommendation Adopt resolution authorizing the city manager to sign the Letter of Commitment to provide a demonstration site and match funding for the Advanced Microgrid Demonstration Business Case Grant Funding Opportunity