City Council

BOARD OF WATER AND POWER COMMISSIONERS ADJOURNED REGULAR MEETING AGENDA November 5, 2024 10:00 AM CITY OF BIG BEAR LAKE, Service, Quality, Community DEPARTMENT OF WATER AND POWER 41972 GARSTIN DRIVE BIG BEAR LAKE, CALIFORNIA 92315 WWW.BBLDWP.COM BOARD MEMBERS Bob Tarras, Chair Barbara Willey, Vice-Chair Craig Hjorth, Treasurer Joe Cylwik, Commissioner Jim Smith, Commissioner This meeting will be held at the DWP Office at 41972 Garstin Drive, Big Bear Lake, CA 92315, ZOOM ACCESS INFORMATION This meeting will be available at: https://us02web.zoom.us/j/85359418109 Passcode: bigbear Meeting ID: 833 4812 6937 You may also call into the meeting by dialing one of the phone numbers below, entering the meeting ID, and entering the passcode. Meeting ID: 833 4812 6937 Passcode: 985264 +1 669 900 9128 US (San Jose) +1 253 215 8782 US (Tacoma) +1 346 248 7799 US (Houston) +1 301 715 8592 US (Germantown) +1 312 626 6799 US (Chicago) +1 646 558 8656 US (New York) OPEN SESSION CALL MEETING TO ORDER PLEDGE OF ALLEGIANCE PUBLIC FORUM All remarks shall be addressed to the Board as a body only. There is a three-minute maximum time limit when addressing the Board. Please note that California law prohibits the Board from taking action on any item not appearing on the agenda. 1. DISCUSSION/ACTION ITEMS 1.1 Motive Solar and Backup Generator Proposal Agreement with Motive Energy for the Garstin Water Operations Facilities Project – Solar and Generator Backup 2. CLOSED SESSION 2.1 Closed Session Pursuant to Section 54957, Public Employee Performance Evaluation Title: General Manager Regular Meeting Agenda November 5, 2024 Page 2 of 2 ADJOURNMENT I hereby certify under penalty of perjury, under the laws of the State of California, that the foregoing agenda was posted in accordance with applicable legal requirements. Dated this 28th of October 2024. ______________ Sam Armstrong, Board Secretary, DWP Board of Commissioners The City of Big Bear Lake, Department of Water and Power strives to make all of its public meetings accessible to everyone. If you need any special assistance or disability-related accommodation in order to participate in this meeting, please contact the Board Secretary at (909) 866-5050. Notification 48 hours prior to the meeting will enable the DWP to make reasonable arrangements to ensure accessibility to this meeting. We are an equal opportunity provider and employer.  AGENDA REPORT Service, Quality, Community DATE: November 5, 2024 TO: Board of Commissioners FROM: Reginald A. Lamson, General Manager RE: Agreement with Motive Energy for the Garstin Water Operations Facilities Project – Solar and Backup Generator Background: The Garstin Water Operations Facilities Project includes solar panels and a diesel backup generator that will provide power for the new Garstin facilities, Lake Plant Well No.5 Pumping Plant, and Lake Plant Well No. 6 Pumping Plant. Motive Energy provided the attached proposal based on the annual energy demand for the proposed Garstin Water Operations Facilities and the two well pumping plants. The proposed solar system will include 368 solar panels, which will be mounted on the operations building and parking structure, an automatic transfer switch, 1,000A net meter electrical service, and diesel generator. The estimated payback period is 11.3 years and the electric bill savings over the 30-year project life are estimated at $5,062,631. The estimated net total cash flow over the 30-year life of the project is $3,710,521. The typical lifespan of solar panels is greater than 30 years. The current Garstin Solar System saves about $25,000 per year. The proposed Garstin Solar System will save an estimated $98,854. With the passage of the Inflation Reduction Act (IRA) the long-standing Investment Tax Credit (ITC) program for solar projects was modified. Now municipalities and nonprofit organizations can apply for a 30% rebate via the ITC program. Motive Energy evaluated the requirements for the ITC’s 40% rebate and DWP qualifies for the solar portion of the project. During the October 22, 2024 Board meeting, the following questions were asked: 1) Diesel versus Natural Gas Standby Generator? A natural gas engine/generator is more commonly used as a primary power source that operates on a regular basis. A standby generator operates intermittently and for short periods of time. A diesel engine/generator is more reliable operating within standby conditions. Also, during an earthquake, natural gas lines can fail, and natural gas engine generators will not operate. 2) Does the solar equipment include more than one (1) inverter? Yes, there is one SE80K inverter and one SE120K inverter. The 368 solar panels each have an optimizer, which allows them to operate independently of each other and optimizes their power production. Garstin Solar and Backup Generator Project November 5, 2024 Page 2 of 2 3) Does PBK’s scope of work include the design of the solar and standby generator equipment? No, PBK’s agreement states, “Photovoltaic panels are expected to be incorporated into the design of the warehouse facilities.” 4) What components of the solar and standby generator equipment are eligible for the 40% rebate? The solar system, 1,000-amp electrical switch gear, conduits, and conductors are eligible for the 40% rebate. The standby generator is not eligible. The cost breakdown for the above facilities is as follows: ITEM TOTAL ($) NOTES Solar Panels $721,416.13 368 Panels, Mounting Hardware, Conduits, Conductors, & Installation Conduit, Conductors, $301,949.85 Lake Plant Well Nos. 5&6 Electrical Service and Trenching for Upgrades, Conduits, Conductors, Trenching, and Well Plants Installation 1,000-amp Service $235,926.53 Furnish and Install Net Meter Panel per BVES Main Specifications. Solar Sub-Total $1,259,292.51 Solar Equipment Eligible for the 40% Rebate 400 KW Standby $531,903.12 Furnish and Install 400 KW, Deisel Generator, Generator Automatic Transfer Switch, 24-Hour Fuel Tank, and Ventilation Equipment Total $1,791,195.63 Less 40% Solar $503,717.00 $1,259,292.51 X 40% Components Rebate Net Total Cost $1,287,478.63 Financial Impact: If approved, funds in the amount of $1,880,756 will be appropriated for these services. Recommendation: Award a design-build agreement with Motive Energy for the Garstin Solar and Backup Generator Project for $1,791,196, and budget internally $89,560 for a 5% contingency for a total amount of $1,880,756.  - Pricing includes a Generac SD400 - 400 kW diesel generator with ~24 hour backup capability. - Pricing includes 1000A 480/277V 3Ph main electrical switchgear(30KAIC NEMA 3R), It excludes any upstream electrical equipment including transformer and downstream electrical equipment including any subpanels & associated breakers. - Pricing assumes single POI interconnect at 277/480V 3Ph. - Trenching, conductors and conduit for LP5 and LP6 are included in price. - PV O&M cost for the first year is $4,765 which is excluded from the proposal. Estimated annual price escalation shall be 4%. - Steel Racking is TAA (Trade Agreement Act) and BAA (Buy American Act) compliant. - Total consumption is assumed to be combined into one rate schedule (A-3). - kWh usage data for LP5 and LP6 have been estimated using a 12-hour daily operation schedule, taking into account averages of the kW values from pump efficiency reports. - Permit costs/AHJ fees are excluded and would be a pass-through. - Proposal assumes 30%Investment Tax Credit doesn't apply to backup Diesel Generator. - Proposal assumes the Energy Community Tax Credit 10% Bonus; customer will be required to apply for Bonus Credit Program. Table of Contents 1 Project Summary 4 2 Project Details 5 2.1 Combined Office + Wells (interval) 5 2.1.1 PV System Details 5 2.1.2 Rebates and Incentives 6 2.1.3 Utility Rates 7 2.1.4 Current Electric Bill 7 2.1.5 New Electric Bill 8 3 Cash Flow Analysis 9 3.1 Cash Purchase with Equipment Replacement 9 4 Assumptions and Exclusions 10 Prepared By: Shiv Desai Page 3 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 1 Project Summary Payment Options Cash Purchase with Equipment Replacement IRR - Term 9.3% LCOE PV Generation $0.123 /kWh Net Present Value $938,369 Payback Period 11.3 Years Total Payments $1,791,196 Total Incentives $503,717 Net Payments $1,287,479 Electric Bill Savings - Term $5,062,631 Upfront Payment $1,259,293 Combined Solar PV Rating Power Rating: 202,400 W-DC Power Rating: 179,029 W-AC-CEC Cumulative Energy Costs By Payment Option $6,000,000 $5,000,000 Cumulative Energy Costs $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 Year 0 Year 4 Year 8 Year 12 Year 16 Year 20 Year 24 Year 28 Avoided Utility Cost Cash Purchase with Equipment Replacement Prepared By: Shiv Desai Page 4 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 2.1.1.1 2 PVOffice Project Combined System Details + Details Wells (interval) General Information Solar PV System Rating Facility: Combined Office + Wells (interval) Power Rating: 202,400 W-DC Address: 41972 Garstin Dr Big Bear Lake CA 92315 Power Rating: 179,029 W-AC-CEC Solar PV Equipment Description Energy Consumption Mix Solar Panels: (368) Thornova Solar TS-BG72(550) Annual Energy Use: 341,052 kWh Inverters: (1) SolarEdge SE80KUS, (1) SolarEdge SE120K Solar PV Equipment Typical Lifespan Solar Panels: Greater than 30 Years Inverters: 15 Years Solar PV System Cost and Incentives Solar PV System Cost $1,259,293 Direct Pay ITC -$503,717 Net Solar PV System Cost $755,576 Utility -35,750 kWh (0.00%) Solar PV 376,802 kWh (100.00%) Monthly Energy Use vs Solar Generation 45,000 40,000 35,000 Energy (kWh) 30,000 25,000 20,000 15,000 -2 -3 -4 -5 -6 -7 -8 -9 -1 -1 -1 -1 /24 /24 /24 /24 /24 /24 /24 /24 0/ 1/ 2/ /24 24 24 24 1/24 2/24 3/24 4/24 5/24 6/24 7/24 8/24 9/ 10 11 12 24 /2 /2 /24 4 4 Energy Use (kWh) Solar Generation (kWh) Prepared By: Shiv Desai Page 5 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 2.1.2 Rebates and Incentives This section summarizes all incentives available for this project. The actual rebate and incentive amounts for this project are shown in each example. Direct Pay, Investment Tax Credit (ITC) - 30% (with Adders) The Inflation Reduction Act (IRA) of 2022 contains a "direct pay" provision that enables certain tax-exempt customers, including state and local government, to receive a direct cash payment in lieu of an investment tax credit (ITC). Entities that qualify for direct pay are eligible to receive a 30% direct payment, assuming they meet the IRA established prevailing wage and apprenticeship requirements in order to qualify for the full 30% “increased rate”, rather than a 6% “base rate”. The IRA states that direct pay is only available for entities, including: an entity exempt from the tax, any State government (or political subdivision thereof), the Tennessee Valley Authority, an Indian tribal government, an Alaska Native Corporation, any corporation operating on a cooperative basis which is engaged in furnishing electric energy to persons in rural areas. These entities may take direct pay for solar and storage in the ITC and PTC as well as the ITC/PTC when tech neutral starts after 2025. In addition to the 30% ITC, the IRA establishes three different types of ITC “Adders”, which provide additional tax credits of up to 10% each, for projects that meet specified requirements. (1) Energy Community, projects sited in an “energy community”, which includes brownfield sites, census tracts where a coal mine closed after 1999 or a coal-fired power plant was retired after 2009, or areas where 25% of local tax revenues are related to the extraction, processing or storage of coal, oil, or natural gas at any time beginning in 2010. (2) Low-income, projects located in a qualified “low-income community”, which is defined as a census tract with a poverty rate of at least 20%, as well as a census tract where the median family income (MFI) is 80% or less of statewide MFI, or on “Indian land”, which is defined as land located within the boundaries of an Indian reservation or lands held by a tribe. (3) Domestic Content, for projects that meet specified domestic content requirements which will be set by Treasury, including 100% steel/iron for manufactured products with a 40% requirement through 2024 followed by 45% in 2025, 50% in 2026, and 55% in 2027 and beyond. Manufactured content is further explained: the products which are components of a qualified facility upon completion will be deemed to have been produced in the United States if the adjusted percentage of the total costs of all such manufactured products of the facility are attributable to manufactured products which are mined, produced, or manufactured in the United States. Total Incentive Value: $503,717 Prepared By: Shiv Desai Page 6 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 2.1.3 Utility Rates The table below shows the rates associate with your current utility rate schedule (A-3 - 3/15/2023). Your estimated electric bills after solar are shown on the following page. Customer Charges Energy Charges Demand Charges Charge A-3 - Rate A-3 - Charge Rate A-3 - Season Rate Type Season Charge Type Season Type 3/15/2023 Type 3/15/2023 Type Type 3/15/2023 W Flat Rate per day $6.60 W T < 657.5 kw Import $0.26946 W Flat Rate Import $9.00 S Flat Rate per day $6.60 W 657.5 kw < T Import $0.31869 S Flat Rate Import $9.00 S T < 657.5 kw Import $0.26946 S 657.5 kw < T Import $0.31869 2.1.4 Current Electric Bill The table below shows your annual electricity costs based on the most current utility rates and your previous 12 months of electrical usage. Rate Schedule: BVES - A-3 - 3/15/2023 Time Periods Energy Use (kWh) Max Demand (kW) Charges Bill Ranges & Seasons Total NC / Max Other Energy Demand Total 1/24/2022 - 2/24/2022 W 31,670 86 $205 $9,089 $774 $10,068 2/24/2022 - 3/24/2022 W 29,707 93 $185 $8,561 $837 $9,583 3/24/2022 - 4/24/2022 W 23,169 66 $205 $6,380 $594 $7,179 4/24/2022 - 5/24/2022 W / S 23,247 72 $198 $6,438 $640 $7,275 5/24/2022 - 6/24/2022 S 33,620 103 $205 $9,711 $927 $10,843 6/24/2022 - 7/24/2022 S 36,862 116 $198 $10,776 $1,044 $12,018 7/24/2022 - 8/24/2022 S 32,850 96 $205 $9,466 $864 $10,534 8/24/2022 - 9/24/2022 S 23,140 72 $205 $6,371 $648 $7,224 9/24/2022 - 10/24/2022 S 18,377 60 $198 $4,952 $540 $5,690 10/24/2022 - 11/24/2022 S / W 23,128 72 $205 $6,367 $636 $7,208 11/24/2022 - 12/24/2022 W 28,160 76 $198 $8,003 $684 $8,885 12/24/2022 - 1/24/2023 W 37,122 98 $205 $10,827 $882 $11,914 Total 341,052 - $2,409 $96,942 $9,070 $108,421 Prepared By: Shiv Desai Page 7 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 2.1.5 New Electric Bill Rate Schedule: BVES - A-3 - 3/15/2023 Time Periods Energy Use (kWh) Max Demand (kW) Charges Bill Ranges & Seasons Total NC / Max Other Energy Demand Total 1/24/2022 - 2/24/2022 W 8,360 74 $205 $2,253 $666 $3,123 2/24/2022 - 3/24/2022 W -237 76 $185 $64 $684 $805 3/24/2022 - 4/24/2022 W -13,517 44 $205 $3,642 $396 $3,042 4/24/2022 - 5/24/2022 W / S -16,473 40 $198 $4,439 $360 $3,881 5/24/2022 - 6/24/2022 S -4,522 76 $205 $1,218 $684 $330 6/24/2022 - 7/24/2022 S 1,425 81 $198 $384 $729 $1,311 7/24/2022 - 8/24/2022 S -2,127 65 $205 $573 $585 $216 8/24/2022 - 9/24/2022 S -9,846 53 $205 $2,653 $477 $1,971 9/24/2022 - 10/24/2022 S -13,200 47 $198 $3,557 $423 $2,936 10/24/2022 - 11/24/2022 S / W -5,041 71 $205 $1,358 $567 $587 11/24/2022 - 12/24/2022 W 7,402 74 $198 $1,995 $666 $2,859 12/24/2022 - 1/24/2023 W 12,025 93 $205 $3,240 $837 $4,282 Total -35,751 - $2,409 $84 $7,074 $9,567 Annual Electricity Savings: $98,854 Prepared By: Shiv Desai Page 8 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 3 Cash Flow Analysis 3.1 Cash Purchase with Equipment Replacement Assumptions and Key Financial Metrics IRR - Term 9.3% Net Present Value $938,369 Payback Period 11.3 Years ROI 207.2% PV Degradation Rate 0.50% Discount Rate 5.0% Energy Cost Escalation Rate 4.0% Federal Income Tax Rate 0.0% State Income Tax Rate 0.0% Total Project Costs $1,791,196 Project Inverter Solar Production Electric Bill Direct Total Cash Cumulative Cash Years Costs Replacement Monitoring Services Savings Pay ITC Flow Flow Upfront -$1,791,196 - - - - -$1,791,196 -$1,791,196 1 - - -$4,765 $98,854 $503,717 $597,806 -$1,193,390 2 - - -$4,956 $102,294 - $97,338 -$1,096,052 3 - - -$5,154 $105,851 - $100,697 -$995,354 4 - - -$5,360 $109,529 - $104,169 -$891,185 5 - - -$5,574 $113,332 - $107,758 -$783,427 6 - - -$5,797 $117,264 - $111,467 -$671,960 7 - - -$6,029 $121,329 - $115,300 -$556,660 8 - - -$6,270 $125,532 - $119,262 -$437,398 9 - - -$6,521 $129,877 - $123,356 -$314,043 10 - - -$6,782 $134,369 - $127,586 -$186,456 11 - - - $139,012 - $139,012 -$47,445 12 - - - $143,811 - $143,811 $96,367 13 - - - $148,772 - $148,772 $245,139 14 - - - $153,900 - $153,900 $399,039 15 - -$7,422 - $159,200 - $151,778 $550,817 16 - - - $164,678 - $164,678 $715,495 17 - - - $170,339 - $170,339 $885,835 18 - - - $176,190 - $176,190 $1,062,025 19 - - - $182,237 - $182,237 $1,244,262 20 - - - $188,485 - $188,485 $1,432,746 21 - - - $194,941 - $194,941 $1,627,687 22 - - - $201,612 - $201,612 $1,829,300 23 - - - $208,506 - $208,506 $2,037,805 24 - - - $215,627 - $215,627 $2,253,433 25 - - - $222,986 - $222,986 $2,476,419 26 - - - $230,587 - $230,587 $2,707,006 27 - - - $238,441 - $238,441 $2,945,446 28 - - - $246,553 - $246,553 $3,192,000 29 - - - $254,933 - $254,933 $3,446,933 30 - - - $263,589 - $263,589 $3,710,521 Totals: -$1,791,196 -$7,422 -$57,209 $5,062,631 $503,717 $3,710,521 - Prepared By: Shiv Desai Page 9 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 4 Assumptions and Exclusions Assumptions Proposal is valid for 15 days only. Solar Panels: 30-year linear performance warranty, and 12-year product warranty Li-Ion Battery Modules - 5 years Power Conversion System: 3-years Inverters: 12-years Solar Racking System: 25-years Switchgear: 10-years Workmanship: One year warranty for the construction of the system Workmanship: 10-year warranty when O&M Agreement Fully Executed Interconnection work/outages will be scheduled during normal business hours Building department and utility inspections will be scheduled during normal business hours Pricing assumes the contractor’s employees will have free and clear access to all array locations simultaneously during business hours (M-F 0700-1700) The contractor will provide electrical drawings stamped by a licensed California Registered Electrical Professional Engineer Monitoring pricing based on availability of Cat 5 landline provided outside of building firewall. If no landline is available pricing will be subject to increase. The System & installation will meet all requirements for interconnection with appropriate documentation. The contractor will be responsible for providing all documentation. System layout is acceptable to AHJ in terms of clearances Single mobilization and completion of project in one phase As built plans are available for engineering reference The contractor is not responsible for superficial marking of parking deck due to use of equipment On-site staging areas are available for storage of equipment and materials No special safety requirements beyond the contractor’s standard safety regulations will be enforced 7.49° tilt maximum on carports 10’ clear height maximum on carports except with a change order All modules to be installed in portrait orientation Pricing includes hot dip galvanizing of all bare steel columns & beams Pricing includes NEMA 3R electrical equipment Module pricing is based on current market value. Price is subject to adjustment based on market conditions at time of contract. Ground penetrating radar (GPR) is accurate down to a depth of 3’-4’. There may be underground utilities below this level that are untraceable with GPR that would require the use of an underground camera to be located at additional cost. Pricing assumes the structure can support the additional loads of the PV array system as well as the required erection equipment Pricing is subject to change until site walk and validation of site conditions Pricing is based on non-union Prevailing wage rates Tax rate is assuming customer has filled the CA tax exemption form. Prepared By: Shiv Desai Page 10 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117 Exclusions UL recertification of existing electrical equipment beyond our scope of work Repairs of any electrical code violations at the existing facility Removal and/or disposal of hazardous materials Arc flash or breaker coordination studies 3rd party (private) locating services Pedestrian & vehicle traffic control Re-creation of building plan sets Union project labor agreements Lightning protection systems Revenue grade metering ADA design/compliance ADA compliance improvements/work Sprinklers & gutters Inverter enclosures Phasing Bonding CAISO study or approval costs Rock drilling De-watering, and/or caissons for collapsible soils Prepared By: Shiv Desai Page 11 P: (910) 977-7262, E: sdesai@motiveenergy.com Motive Energy Storage Systems, Inc., CSLB# 1089117