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HomeMy WebLinkAbout2019-11-12; City Council; ; Presentation from Cabrillo Power I LLC (NRG) regarding the demolition schedule and associated demolition activities for the Encina Power Station and authorization for theCA Review V3 --- @ JOINT CITY COUNCIL AND CARLSBAD MUNICIPAL WATER DISTRICT Staff Report Meeting Date: To: From: Staff Contact: Subject: Nov. 12, 2019 Mayor/President and City Council/Board Scott Chadwick, City Manager Gary T. Barberio, Deputy City Manager, Community Services gary.barberio@carlsbadca.gov, 760-434-2822 Presentation from Cabrillo Power I LLC (NRG) regarding the demolition schedule and associated demolition activities for the Encina Power Station and authorization for the mayor/president to sign a letter granting NRG a not-to-exceed, nine-month extension in the demolition deadline. Recommended Action Receive a presentation from Cabrillo Power I LLC (NRG) regarding the demolition schedule and associated demolition activities for the Encina Power Station and: 1. Adopt a City of Carlsbad Resolution authorizing the mayor to sign a letter granting NRG a not-to-exceed, nine-month extension in the demolition deadline underthe Jan. 14,. 2014 Settlement Agreement between and among the City of Carlsbad {City), Carlsbad Municipal Water District (CMWD), Cabrillo Power I LLC and Carlsbad Energy Center LLC (collectively NRG), and San Diego Gas & Electric Company (SDG&E). 2. Adopt a Carlsbad Municipal Water District (CMWD) Resolution authorizing the president to sign a letter granting NRG. a not-to-exceed, nine-month extension in the demolition deadline under the Jan. 14, 2014 Settlement Agreement between and among the City of Carlsbad {City), Carlsbad Municipal Water District (CMWD), Cabrillo Power I LLC and Carlsbad Energy Center LLC (collectively NRG), and San Diego Gas & Electric Company (SDG&E). Executive Summary In January 2014, the City Council/Board of Directors approved a Settlement Agreement (Agreement) involving the City of Carlsbad, NRG, and SDG&E. Per the Agreement, the City and CMWD agreed to support NRG's construction of a 500 mw peaker power plant known as the Carlsbad Energy Center Project (CECP). In exchange, NRG agreed to shut down the existing Encina Power Station (EPS) on the commercial operation date of the new CECP, which was Dec. 12, 2018. NRG also agreed to start the above-ground demolition and remediation of EPS within one year following the shutdown date of EPS and to complete the demolition within two years of the start date of the demolition. NRG has made contractual arrangements to begin the demolition prior to Dec. 11, 2019. NRG representatives will present to the City Council/Board an overview of the demolition schedule and forthcoming demolition activities. NRG is also requesting that the City Council/Board grant a not-to-exceed, nine-month extension to the demolition completion date Nov. 12, 2019 Item #12 Page 1 of 13 specified in the Agreement (Exhibit 2). It is recommended that the City Council/Board grant the extension request and authorize the mayor/president to sign the extension letter (Attachment A to Exhibit 1). Discussion On Jan. 14, 2014, the City Council/Board approved a Settlement Agreement (Agreement) amongst and between the City, CMWD, NRG, and SDG&E (Resolution No. 2014-010 and Resolution No. 1487). Per the Agreement, the City/CMWD agreed to support NRG's construction of a 500 mw peaker plant located east of the railroad tracks and west of 1-5 known as the Carlsbad Energy Center Project {CECP). In exchange, NRG agreed, among other provisions of the Agreement, to shut down the existing Encina Power Station (EPS) on the commercial operation date of the new CECP, which was Dec. 12, 2018. In addition, NRG agreed to start the above-ground demolition and remediation of EPS within one year following the shutdown date of EPS and to complete the demolition within two years of the start date of the demolition. In accordance with the Agreement, in October 2019 NRG entered into a contract with Brandenburg, a firm specializing in demolition and remediation. Mobilization will soon be initiated, and demolition activities will begin prior to Dec. 11, 2019, which is one year following the shutdown of EPS, as required by the Agreement. NRG representatives will present to the City Council/Board an overview of the demolition schedule and forthcoming demolition activities. In addition to the planned demolition overview presentation, NRG, along with Poseidon Resources (Channelside) LP (Poseidon), is requesting that the City Council/Board grant a not-to- exceed, nine-month extension to the demolition completion date specified in the Agreement (Exhibit 2). NRG is requesting the extension for the following two reasons: 1) Poseidon owns and operates the Claude "Bud" Lewis Carlsbad Desalination Project (CDP). Since the December 2018 shutdown of EPS, Poseidon has continued to utilize EPS's circulating water pumps to deliver seawater to the CDP. It was expected that Poseidon would complete the construction of their own new pumps by Dec. 31, 2019. That schedule will not be met due to extensive challenges and time delays in receiving all the agency permits needed to move forward on construction of the new CDP pumps. The CDP currently provides over 10% of the county's water supply. To ensure continuity of water supply operations, it is necessary for NRG to accommodate Poseidon's need for continued use of the EPS pumps through at least April 2020, and possibly as late as June 2020. The accommodation of Poseidon's water pump needs represents a major constraint to NRG's ability to comply with the demolition completion date currently outlined in the Agreement. 2) The San Diego County Sheriff's Department (Sheriff) operates the Regional Communications System (RCS) utilized by both police and fire emergency response agencies in North San Diego County. The Sheriff is currently working towards the implementation of a new RCS which is not expected to be up and running until April Nov. 12, 2019 Item #12 Page 2 of 13 2020. The existing RCS relies upon an antenna located on the EPS stack for reliable emergency services communication coverage throughout north county. NRG had originally expected to demolish the EPS stack early in their demolition schedule, but NRG has had to defer demolition of the stack until the new RCS is up and running. The accommodation of Sheriff's RCS needs represents a second major constraint to NRG's ability to comply with the demolition completion date currently outlined in the Agreement. City staff has reviewed NRG's request for a not-to-exceed, nine-month extension to the demolition completion date specified in the Agreement and is recommending that the City Council/Board grant the extension request and authorize the mayor/president to sign the extension letter (Attachment A to Exhibit 1). Fiscal Analysis This item has no fiscal impact. Next Steps NRG will mobilize and begin above-ground demolition ofthe Encina Power Station by Dec. 11, 2019, and will have up to two years and nine months to complete the demolition efforts. Environmental Evaluation (CEQA) Environmental review of the activities relating to the Agreement are within the exclusive jurisdiction of other agencies, including without limitation the California Energy Commission and California Public Utilities Commission, which have served and/or will serve as the Lead Agencies for compliance with the California Environmental Quality Act (CEQA). To the extent that any activities relating to the Agreement may be subject to environmental review by the City, such activities would be exempt from CEQA pursuant to CEQA Guidelines section 15271 (Early Activities Relating to Thermal Power Plants) and/or involve future activities which are conditional upon review and approval by other regulatory agencies and/or are too speculative for review at this time. Receiving a presentation and a request for a not-to-exceed, nine-month extension to the demolition completion date does not result in a direct or reasonably foreseeable indirect physical change in the environment that was not previously considered by the Lead Agencies. Public Notification and Outreach This item was noticed in accordance with the Ralph M. Brown Act and was available for viewing at least 72 hours prior to the posting of the agenda. Exhibits 1. City Council Resolution 2. Carlsbad Municipal Water District Resolution 3. Letter from Cabrillo Power I LLC (NRG) and Poseidon Resources (Channelside) LP (Poseidon), dated Oct. 15, 2019 Nov. 12, 2019 Item #12 Page 3 of 13 RESOLUTION NO. 2019-228 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE MAYOR TO SIGN A LETTER GRANTING CABRILLO POWER I LLC (NRG) A NOT-TO-EXCEED, NINE-MONTH EXTENSION IN THE DEMOLITION DEADLINE UNDER THE JAN. 14, 2014 SETTLEMENT AGREEMENT BETWEEN AND AMONG THE CITY OF CARLSBAD (CITY), CARLSBAD MUNICIPAL WATER DISTRICT (CMWD), CABRILLO POWER I LLC AND CARLSBAD ENERGY CENTER LLC (COLLECTIVELY NRG), AND SAN DIEGO GAS & ELECTRIC COMPANY (SDG&E) WHEREAS, on Jan. 14, 2014, the City Council of the City of Carlsbad approved a Settlement Agreement (Agreement) amongst and between the City, CMWD, NRG, and SDG&E (Resolution No. 2014-010); and WHEREAS, per the Agreement, the City agreed to support NRG's construction of a 500 mw peaker plant located east of the railroad tracks and west of 1-5 known as the Carlsbad Energy Center Project (CECP); and WHEREAS, in exchange, NRG agreed, among other provisions of the Agreement, to shut down the existing Encina Power Station (EPS) on the commercial operation date of the new CECP, which was Dec. 12, 2018.; and WHEREAS, in addition, NRG agreed to start the above-ground demolition and remediation of EPS within one year following the shutdown date of EPS and to complete the demolition within two years of the start date of the demolition; and WHEREAS, Poseidon Resources (Channelside) LP (Poseidon) owns and operates the Claude "Bud" Lewis Carlsbad Desalination Project (CDP) and since the December 2018 shutdown of EPS, Poseidon has continued to utilize EPS's circulating water pumps to deliver seawater to the CDP; and WHEREAS, it was expected that Poseidon would complete the construction of their own new pumps by Dec. 31, 2019. That schedule will not be met due to extensive challenges and time delays in receiving all the agency permits needed to move forward on construction of the new CDP pumps; and WHEREAS, to ensure continuity of water supply operations, it is necessary for NRG to accommodate Poseidon's need for continued use of the EPS pumps through at least April 2020, and possibly as late as June 2020; and WHEREAS, the accommodation of Poseidon's water pump needs represents a major constraint to NRG's ability to comply with the demolition completion date currently outlined in the Agreement; and Nov. 12, 2019 Item #12 Page 4 of 13 WHEREAS, the San Diego County Sheriff's Department (Sheriff) operates the Regional Communications System (RCS) utilized by both police and fire emergency response agencies in North San Diego County; and WHEREAS, the Sheriff is currently working towards the implementation of a new RCS which is not expected to be up and running until April 2020; and WHEREAS, the existing RCS relies upon an antenna located on the EPS stack for reliable emergency services communication coverage throughout north county; and WHEREAS, NRG had originally expected to demolish the EPS stack early in their demolition schedule, but NRG has had to defer demolition of the stack until the new RCS is up and running; and WHEREAS, the accommodation of the Sheriff's RCS needs represents a major constraint to NRG's ability to comply with the demolition completion date currently outlined in the Agreement; and WHEREAS, NRG, along with Poseidon Resources (Channelside) LP (Poseidon), is now requesting that the City Council grant a not-to-exceed, nine-month extension to the demolition completion date specified in the Agreement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the City Council of the City of Carlsbad (City Council) hereby grants NRG's request for a not-to-exceed, nine-month extension to the demolition completion date specified in the Agreement. 3. That the City Council hereby authorizes the mayor to sign the attached extension letter (Attachment A). PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 12th day of November 2019, by the following vote, to wit: AYES: Hall, Blackburn, Bhat-Patel, Schumacher. NAYS: None. ABSENT: None. MATT HALL, Mayor I'~, lle,1K..601f/n Depvt_J 1df BARBARA ENGLESON, City Clerk / C /1 (SEAL) 1'J . , C fl'< ,111\\llllllll/f!// ,,,,,,~ CA n')11111 ~-...0,.. "',.n,,,~ f ~ .. ····•·· .. ~d\\ :2/.../m .... "V~ Io[ , ?:.-A":c~ \ \s:i w./ J ~ ••••• l■N,nfUU •••• ~ ~ r\ •• I ,•• fi. ~ ~'-.:.t1..·············.:t.\"r,$:' 0 ...., /FQ°-\"' ,~ 'l/11,, I' ,,,, .... '"1111111111111111~ Nov. 12, 2019 Item #12 Page 5 of 13 <icityof Carlsbad Office of the Mayor November 12, 2019 Eric Leuze VP, Asset Management Cabrillo Power I LLC 804 Carnegie Center Princeton, NJ 08540 Subject: Extension of the Encina Demolition Deadline Dear Mr. Leuze, Attachment A Ccarlsbad Municipal Water District Office of the President Poseidon's Claude "Bud" Lewis Carlsbad Desalination Plant ("CDP") provides 50 million gallons of water per day to support the integrated water supply of the San Diego County Water Authority and member agencies including the Carlsbad Municipal Water District. CDP's desalination process currently relies on operation of the now-retired Encina Power Station's ("Encina's") circulating water pumps. The city understands that under the Ground Lease Poseidon has with Cabrillo Power I LLC ("NRG"), the owner of Encina, Pos_eidon's right to continued operation of the Encina pumps into 2020 is limited by several conditions, including a requirement that the city consent to operation of the Encina pumps after Dec. 31, 2019. The city further understands that based on Poseidon's current schedule for replacement pumps, continued operation of the Encina pumps will be necessary through at least April 20, 2020, but that Poseidon believes Encina pump operation may be necessary through June 2020. There are no alternatives to the continued operation of the Encina pumps during that period, meaning that without operation of the Encina pumps after Dec. 31, 2019, the CDP would necessarily shut down for an additional four to six months. This significant disruption to an essential water supply to San Diego County and Carlsbad is not in the public interest. The city also understands that the demolition schedule is further complicated by delays in the transition to a new emergency communication system that the San Diego County Sheriff Department is coordinating. The existing system relies on an antenna located on the Encina stack that serves the Sheriff Department and other emergency response agencies. NRG has advised the city that the original plan was to demolish the stack early in the overall schedule, but stack demolition has now been delayed to April 1, 2020, to accommodate the Sheriff Department's transition to the new system. Under the Jan. 14, 2014, Settlement Agreement among the city, NRG and others, NRG is obligated to begin demolition of Encina no later than Dec. 12, 2019, and to complete demolition no later than Dec. 12, 2021 ("Demolition Deadline"). The city acknowledges that additional delays in the Mayor Matt Hall City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2830 t I www.carlsbadca.gov Nov. 12, 2019 Item #12 Page 6 of 13 Mr. Eric Leuze Nov.12,2019 Page 2 construction of Poseidon's new pumps, and the completion of the Sheriff Department's new communication system could impact NRG's schedule for demolition. In light of the unavoidable interruption to the supply of water to the CDP that would otherwise result, the city consents to the continued operation of Encina's pumps after Dec. 31, 2019. Additionally, the city agrees that the stack demolition should be delayed until the Sheriff Department has completed the transition to the new communication system. Furthermore, so long as NRG demonstrates reasonable efforts to complete the demolition of Encina as soon as possible, the city hereby authorizes an extension in the Demolition Deadline, such extension not to exceed nine months. Si;/j/;U Matt Hall Mayor, City of Carlsbad President, Carlsbad Municipal Water District Board of Directors cc: Scott Chadwick, City Manager Celia Brewer, City Attorney Gary T. Barberio, Deputy City Manager, Community Services Sachin Chawla, Poseidon Resources (Channelside) LP Nov. 12, 2019 Item #12 Page 7 of 13 RESOLUTION NO. 1623 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT, AUTHORIZING THE PRESIDENT TO SIGN A LETTER GRANTING CABRILLO POWER I LLC (NRG) A NOT-TO-EXCEED, NINE-MONTH EXTENSION IN THE DEMOLITION DEADLINE UNDER THE JAN. 14, 2014 SETTLEMENT AGREEMENT BETWEEN AND AMONG THE CITY OF CARLSBAD (CITY), CARLSBAD MUNICIPAL WATER DISTRICT (CMWD), CABRILLO POWER I LLC AND CARLSBAD ENERGY CENTER LLC (COLLECTIVELY NRG), AND SAN DIEGO GAS & ELECTRIC COMPANY (SDG&E) WHEREAS, on Jan. 14, 2014, the Board of Directors of the Carlsbad Municipal Water District (Board) approved a Settlement Agreement (Agreement) amongst and between the City, CMWD, NRG, and SDG&E (Resolution No. 1487); and WHEREAS, per the Agreement, CMWD agreed to support NRG's construction of a 500 mw peaker plant located east of the railroad tracks and west of 1-5 known as the Carlsbad Energy Center Project (CECP); and WHEREAS, in exchange, NRG agreed, among other provisions of the Agreement, to shut down the existing Encina Power Station (EPS) on the commercial operation date of the new CECP, which was Dec. 12, 2018; and WHEREAS, in addition, NRG agreed to start the above-ground demolition and remediation of EPS within one year following the shutdown date of EPS and to complete the demolition within two years of the start date of the demolition; and WHEREAS, Poseidon Resources (Channelside) LP (Poseidon) owns and operates the Claude "Bud" Lewis Carlsbad Desalination Project (CDP) and since the December 2018 shutdown of EPS, Poseidon has continued to utilize EPS's circulating water pumps to deliver seawater to the CDP; and WHEREAS, it was expected that Poseidon would complete the construction of their own new pumps by Dec. 31, 2019. That schedule will not be met due to extensive challenges and time delays in receiving all the agency permits needed to move forward on construction of the new CDP pumps; and WHEREAS, to ensure continuity of water supply operations, it is necessary for NRG to accommodate Poseidon's need for continued use of the EPS pumps through at least April 2020, and possibly as late as June 2020; and WHEREAS, the accommodation of Poseidon's water pump needs represents a major constraint to NRG's ability to comply with the demolition completion date currently outlined in the Agreement; and Nov. 12, 2019 Item #12 Page 8 of 13 WHEREAS, the San Diego County Sheriff's Department (Sheriff) operates the Regional Communications System (RCS) utilized by both police and fire emergency response agencies in North San Diego County; and WHEREAS, the Sheriff is currently working towards the implementation of a new RCS which is not expected to be up and running until April 2020; and WHEREAS, the existing RCS relies upon an antenna located on the EPS stack for reliable emergency services communication coverage throughout north county; and WHEREAS, NRG had originally expected to demolish the EPS stack early in their demolition schedule, but NRG has had to defer demolition of the stack until the new RCS is up and running; and WHEREAS, the accommodation of the Sheriff's RCS needs represents a major constraint to NRG's ability to comply with the demolition completion date currently outlined in the Agreement; and WHEREAS, NRG, along with Poseidon Resources (Channelside) LP (Poseidon), is now requesting that the Board grant a not-to-exceed, nine-month extension to the demolition completion date specified in the Agreement. NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Municipal Water District Board of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the Board of Directors of the Carlsbad Municipal Water District (Board) hereby grants NRG's request for a not-to-exceed, nine-month extension to the demolition completion date specified in the Agreement. 3. That the Board hereby authorizes the President to sign the attached extension letter (Attachment A). PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California and the City of Carlsbad, California on the 12th day of November 2019, by the following vote, to wit: AYES: Hall, Blackburn, Bhat-Patel, Schumacher. NAYS: None. ABSENT: None. Nov. 12, 2019 Item #12 Page 9 of 13 (i)cityof Carlsbad Office of the Mayor November 12, 2019 Eric Leuze VP, Asset Management Cabrillo Power I LLC 804 Carnegie Center Princeton, NJ 08540 Subject: Extension of the Encina Demolition Deadline Dear Mr. Leuze, Attachment A Ccarlsbad Municipal Water District Office of the President Poseidon's Claude "Bud" Lewis Carlsbad Desalination Plant ("CDP") provides 50 million gallons of water per day to support the integrated water supply of the San Diego County Water Authority and member agencies including the Carlsbad Municipal Water District. CDP's desalination process currently relies on operation of the now-retired Encina Power Station's ("Encina's") circulating water pumps. The city understands that under the Ground Lease Poseidon has with Cabrillo Power I LLC ("NRG"), the owner of Encina, Poseidon's right to continued operation of the Encina pumps into 2020 is limited by several conditions, including a requirement that the city consent to operation of the Encina pumps after Dec. 31, 2019. The city further understands that based on Poseidon's current schedule for replacement pumps, continued operation of the Encina pumps will be necessary through at least April 20, 2020, but that Poseidon believes Encina pump operation may be necessary through June 2020. There are no alternatives to the continued operation of the Encina pumps during that period, meaning that without operation ofthe Encina pumps after Dec. 31, 2019, the CDP would necessarily shut down for an additional four to six months. This significant disruption to an essential water supply to San Diego County and Carlsbad is not in the public interest. The city also understands that the demolition schedule is further complicated by delays in the transition to a new emergency communication system that the San Diego County Sheriff Department is coordinating. The existing system relies on an antenna located on the Encina stack that serves the Sheriff Department and other emergency response agencies. NRG has advised the city that the original plan was to demolish the stack early in the overall schedule, but stack demolition has now been delayed to April 1, 2020, to accommodate the Sheriff Department's transition to the new system. Under the Jan. 14, 2014, Settlement Agreement among the city, NRG and others, NRG is obligated to begin demolition of Encina no later than Dec. 12, 2019, and to complete demolition no later than Dec. 12, 2021 ("Demolition Deadline"). The city acknowledges that additional delays in the Mayor Matt Hall City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2830 t I www.carlsbadca.gov Nov. 12, 2019 Item #12 Page 10 of 13 Mr. Eric Leuze Nov.12,2019 Page 2 construction of Poseidon's new pumps, and the completion of the Sheriff Department's new comm_unication system could impact NRG's schedule for demolition. In light of the unavoidable interruption to the supply of water to the CDP that would otherwise result, the city consents to the continued operation of Encina's pumps after Dec. 31, 2019. Additionally, the city agrees that the stack demolition should be delayed until the Sheriff Department has completed the transition to the new communication system. Furthermore, so long as NRG demonstrates reasonable efforts to complete the demolition of Encina as soon as possible, the city hereby authorizes an extension in the Demolition Deadline, such extension not to exceed nine months. Sincerely, -1ttdl/# Matt Hall Mayor, City of Carlsbad President, Carlsbad Municipal Water District Board of Directors cc: Scott Chadwick, City Manager Celia Brewer, City Attorney Gary T. Barberio, Deputy City Manager, Community Services Sachin Chawla, Poseidon Resources (Channelside) LP Nov. 12, 2019 Item #12 Page 11 of 13 Gary T. Barberio Deputy City Manager, Community Services Nov. 12, 2019 Encina Power Station Demolition Schedule Agenda •Presentation of demolition schedule •Consider two Resolutions granting NRG a nine-month extension on their demolition completion date Recommendation 1. Adopt a City of Carlsbad Resolution authorizing the mayor to sign a letter granting a not-to-exceed, nine-month extension in the demolition deadline. 2. Adopt a CMWD Resolution authorizing the president to sign a letter granting a not-to-exceed, nine-month extension in the demolition deadline. Enc.naPaM!r statloo SOG&E soo.mroo & Swl!tllY<lras Background •Jan. 2014 Settlement Agreement ₋City agreed to support NRG’s new plant ₋NRG agreed to shut down the Encina Power Station (EPS) on same date new plant started –Dec. 12, 2018 Background ₋NRG agreed to start above-ground demolition of EPS within one year following EPS shutdown •NRG has made contractual arrangements to begin demolition by Dec. 11, 2019 and mobilization will start soon ₋NRG agreed to complete above-ground demolition of EPS within two years of demolition start Demolition Extension Request •NRG is requesting that the City Council/Board grant a not-to-exceed, nine-month extension to the demolition completion date for two reasons: Demolition Extension Request •Poseidon Resources owns and operates the Carlsbad Desalination Project (CDP) ⁻Poseidon continues to utilize the EPS water pumps ⁻It was expected that new pumps would be available by Dec. 31, 2019 ⁻Permitting challenges have delayed new pumps ⁻Poseidon needs to utilize EPS pumps until at least April 2020, or possibly June 2020 Demolition Extension Request •San Diego County Sheriff’s Department operates the Regional Communications System ⁻Sheriff is working towards completing a new RCS system ⁻New system is not expected to be completed until April 2020 ⁻Existing system relies upon an antenna located on the EPS stack Demolition Extension Request •City Staff is recommending that the City Council/Board grant the nine-month extension request and authorize the mayor/president to sign the extension letter (Attachment A to the Resolutions) Presentation Introduction Eric Leuze Vice-President, Asset Management Cabrillo Power I, LLC (NRG) Recommendation 1. Adopt a City of Carlsbad Resolution authorizing the mayor to sign a letter granting a not-to-exceed, nine-month extension of the demolition deadline. 2. Adopt a CMWD Resolution authorizing the president to sign a letter granting a not-to-exceed, nine-month extension of the demolition deadline. © 2019 NRG Energy, Inc.All rights reserved. Encina Power Station Demolition Presented to Carlsbad City Council November 12, 2019 11/8/2019 DRAFT I --I nrg:·· © 2019 NRG Energy, Inc.All rights reserved. Encina Power Station Encina retired December 11, 2018 after 64 years of reliable electric service to Carlsbad and the region Original Construction circa 1953 Current Status October 2019  .,} nrg. © 2019 NRG Energy, Inc.All rights reserved. •Settlement Agreement was executed in 2014 among City of Carlsbad, SDG&E and NRG entities (Cabrillo Power I LLC and Carlsbad Energy Center LLC, together “NRG”) •City agreed to support permitting, construction and development of the Carlsbad Energy Center •Among other commitments, NRG agreed to: •Permanently shut down Encina upon commercial operation of Carlsbad Energy Center completed on December 12, 2018 •Ensure Encina facilities are in secure, inoperable condition within 90 days of shut down completed on March 12, 2019 •Commence physical demolition of above-ground structures within one year of Encina shut-down mobilization underway; demolition to begin by December 12, 2019 •Complete demolition of above-ground structures within two years Extension of demolition deadline requested •Coordinate redevelopment of the Encina property with the City Preliminary activities underway Settlement Agreement Demolition Obligations © 2019 NRG Energy, Inc.All rights reserved. •Encina pumps deliver seawater to Poseidon •Delays in Poseidon’s permitting and regulatory approvals have delayed construction of replacement pumps •Continued operation of Encina’s pumps after December 31, 2019 is required to ensure continuity of water supply; Poseidon’s lease requires City consent for continued operation •Encina stack supports antenna used by Sheriff Department’s emergency communication system. •Delays in transition to new system require continued use of the stack into 2020 to ensure integrity of emergency communications •Requesting the City’s consent to continued pump operation, and extension of the deadline to complete demolition for up to 9 months Managing Delays in Demolition Schedule Previous Schedule Current Plan Poseidon replacement pumps operational before December 31, 2019 Encina pumps may be needed to operate through June 2020 or later; followed by deactivation and demolition Replacement emergency communication system operational by October 31, 2019 Antenna on Encina stack may need to remain until March 2020; delaying stack demolition © 2019 NRG Energy, Inc.All rights reserved. •Programs to ensure safety and minimize environmental impacts include: •Air Quality program ensures compliance with abatement and dust management requirements and approved heavy equipment usage •Hazardous Material and Waste Management programs ensure compliant transportation and disposal of demolition wastes •Noise Compliance Program limits heavy equipment work schedule (7am-6pm M-F; 8am-6pm Sat) and includes community hotline to ensure compliance with noise requirements •Soil & Water Conditions ensure proper management of soil and storm water Best Management Practices •Traffic Compliance conditions specify demolition parking and laydown areas and ensures traffic planning and routes are coordinate with the City to minimize potential impacts •Worker Safety Program establishes requirements and reinforces safety culture on daily basis to ensure demo is done safely Comprehensive Environmental Oversight of Demolition © 2019 NRG Energy, Inc.All rights reserved. Demolition Process NRG will use best efforts to complete timely demolition of power block, subject to timely construction and commissioning of Poseidon’s replacement pumps  Heavy equipment including cranes and demolition shears will be used to demolish the main power block, beginning in 2nd half 2020, assuming construction of Poseidon’s replacement pumps is completed on schedule Mobilization of demolition equipment has begun, abatement will begin in December and stack demolition is scheduled to commence in April 2020, subject to Sheriff Department’s transition to new emergency communication system .} nrg~ © 2019 NRG Energy, Inc.All rights reserved. Encina Site Access for Demolition Gate 1 Gate 2 Gate 3 •Traffic management plan will minimize impacts •Gate 1 expected to be used as necessary to provide access to I-5 via Carlsbad Blvd and either Tamarack Ave or Palomar Airport Rd •Gate 2 is not expected to be used during demolition •Gate 3 will be used by all workers and for access to I-5 via Cannon Rd; subject to protocol for safe RR crossingEncina Power Block SDG&E Service Center SDG&E Switchyard Poseidon ~ nrg. © 2019 NRG Energy, Inc.All rights reserved. •Hotline for comments and questions on Encina demo: 1-888-211-2074 •Responses to hotline calls will be provided within 24 hours •Pre-demolition notification providing information including hotline mailed to all residents within one mile on September 23, 2019 •Signs posted at all three Encina gates provide contact information •City of Carlsbad Home website will include a link to NRG’s website, providing additional opportunity to stay informed, prior to start of demolition Public Engagement Hotline is first link returned from Google search for “Encina demolition hotline”  Google encina demolition hotline Q All @ News !;;I Images (j Shopping ~ Maps : More About 130,000 results (0.57 seconds} Hotline is available to provide comments/concern s at 888-211-2074. The demolition of Encina will begin a new chapter for th e site. Carlsbad I NRG Energy https://www.nrg.com , case-studies , carlsbad nrg:- Settings Tools @ About Featured Snippets • Feedback © 2019 NRG Energy, Inc.All rights reserved. Encina Power Station Demolition Hotline for comments and questions on Encina demolition: 1-888-211-2074 Responses will be provided within 24 hours Questions?