SR-510-006 (10)
CP: SM\ EPWM\EPD\WPDOCS\STAFFRPT\SOLARSMMUSD
Council Meeting: January 14, 2003 Santa Monica,
California
To: Mayor and City Council
From: City Staff
Subject: Approve Contract with Global Solar, Inc. for Installation of Solar
Photovoltaic Systems at Three SMMUSD Schools; Approve
Additional Funding for the Energy Efficient Schools Project; and
Authorize the City Manager to Execute a Memorandum of
Understanding Governing the Project
INTRODUCTION
This report recommends that the City Council authorize the City Manager to
negotiate and execute an agreement with Global Solar, Inc. for the design and
installation of solar photovoltaic systems at Lincoln and John Adams Middle
Schools and at Edison Elementary School in the amount of $200,000 plus
$25,000 contingency. The report also recommends an increase in City funding of
$200,000 for the Energy Efficient Schools project, and authorization for the City
Manager to negotiate and execute a Memorandum of Understanding governing
the project.
BACKGROUND
In June 2001, City Council directed staff to establish a Community Energy
Efficiency Fund to develop and implement energy efficiency and reduction
programs in the community by utilizing 50% of the additional Utility User Tax
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revenues that were collected as a result of extraordinary energy cost increases
for electricity and natural gas. The total amount appropriated to this fund was
$1.4 million. In September, 2001, Council adopted a staff recommendation that
$500,000 of this amount be used to assist the Santa Monica Malibu Unified
School District (SMMUSD) in the creation of an Energy Efficient Schools
partnership that would entail the implementation of measures to reduce the
District?s electricity costs and improve energy management practices.
City and District staff have collaborated on the development of energy
conservation protocols for District personnel, analyzed historical energy use, and,
with the assistance of an energy efficiency expert paid for by the City, conducted
walk-through audits of District facilities to identify a broad range of potential cost-
effective energy efficiency measures. The categories of projects that have been
identified include lighting system upgrades, HVAC system control upgrades,
energy efficiency education and training, and photovoltaic demonstration
projects. In terms of the photovoltaic demonstration project category, it was
determined that a portion of the City?s funds could be leveraged with available
California Energy Commission incentives to finance the installation of
photovoltaic (solar electric) generation systems at three priority school sites.
DISCUSSION
School Site Photovoltaic Demonstration Projects
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A Request for Proposals was issued in April, 2002 for the purchase and
installation of photovoltaic systems at Lincoln Middle School, John Adams Middle
School, and Edison Elementary School. Bidders had the option of proposing
educational displays and curriculum materials that would complement the
proposed photovoltaic systems. Each school site would use the power generated
by its solar system to offset some of its own energy consumption and related
costs. Nine solar companies submitted proposals and Global Solar Energy, Inc.
was selected as the best qualified to install the systems. Each school principal,
teachers, and appropriate District administrators were consulted on the design
and location of the systems. Site Governance Committees have also been
informed and invited to provide input on the proposed systems.
The Global Solar Energy, Inc. system at each school site will be approximately 9
kw (kilowatts) in size and will generate approximately 15,000 killowatt hours of
electricity per year, saving each school approximately $2,250 per year in
electricity costs. The purchase and installation cost of the three systems totals
$275,003. The California Energy Commission rebates ($4.50 per watt) will pay
for $125,087 of this amount and the City?s Community Energy Efficiency Fund
will pay for the remaining balance of $149,916.
The City will be responsible for the construction and maintenance of the systems
and will own all of the equipment that is installed. A Memorandum of
Understanding between the City and the District is currently being drafted that
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defines how the systems will be operated and maintained. As a part of their
agreement with the City, the District will provide the sites for the installation of the
systems and will receive all of the electricity savings. It is anticipated that the
photovoltaic systems will continue to generate electricity for at least 25 years.
City and School District Energy Efficiency Partnership
In addition to the photovoltaic demonstration projects, a Request for Proposals
has been issued for the purchase and installation of energy efficient lighting
systems for eleven Santa Monica schools. SMMUSD will select the preferred
vendor in consultation with City staff, enter into a contract and oversee project
implementation. It is anticipated that SMMUSD will be eligible to receive energy
efficiency funds from Southern California Edison and the State to buy-down a
portion of the costs for installing the energy efficient lighting systems. Under the
proposed Memorandum of Understanding between the School District and Santa
Monica, the City?s Community Energy Efficiency Fund will reimburse the School
District for all the remaining project costs up to a maximum of $325,000. The
combined net cost to the City from the District?s energy efficiency and
photovoltaic projects will therefore total approximately $500,000.
It is anticipated that the annual energy cost savings to the School District from
the efficiency upgrades will amount to $54,000. The estimated combined annual
cost savings to the District from both the efficiency and photovoltaic projects will
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total $61,000 resulting in a projected simple payback on the City?s investment of
about eight years.
Proposed Expansion of the Energy Efficient Schools Project
Given the current fiscal challenges being faced by the School District and the
increasing importance of reductions in on-going operating costs for school sites,
City staff has explored the feasibility of expanding the scope of the planned
energy efficiency upgrades to capture additional energy savings opportunities in
District facilities. As a result of staff?s analysis, it is recommended that Council
approve an additional $200,000 from the Community Energy Efficiency Fund to
be directed towards the Energy Efficient Schools project. The funds were initially
going to be used for citywide energy efficiency measures and solar electric
projects. These additional funds would be combined with the previously
designated $325,000 to perform additional lighting upgrades as well as other cost
effective upgrades to HVAC systems and controls at various sites. It is estimated
that the added $200,000 investment would result in an additional $33,500 in
annual cost savings for the District, which represents a six year simple payback.
The combined total annual energy cost savings to the District from the enhanced
project would total $94,500.
BUDGET / FISCAL IMPACT
Funds for the School District photovoltaic and energy efficiency projects are
available in CIP account number C01076302 ($500,000 existing encumbrance to
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SMMUSD). The State buy-down fund will contribute $125,087 to the photovoltaic
project, which will be received in Miscellaneous Grants revenue account number
20662.406720. A corresponding expenditure account will be established in the
amount of $125,087 in Miscellaneous Grants account number 20076403.589000.
The remaining photovoltaic project cost of $149,916 plus $25,000 in
contingencies, for a total of $174,916, will be expended from the existing
SMMUSD encumbrance in CIP account number C01076302. The proposed
$200,000 enhancement to the Energy Efficient Schools project is available from
unencumbered funds in CIP account number C01076302.
RECOMMENDATION
Staff recommends that the City Council authorize the City Manager to negotiate
and execute an agreement with Global Solar Energy, Inc. in the amount of
$275,003 plus $25,000 in contingencies for the design and installation of solar
photovoltaic systems at Lincoln and John Adams Middle Schools and at Edison
Elementary School; approve a $200,000 increase in City funding for the Energy
Efficient Schools project; authorize the City Manager to negotiate and execute a
Memorandum of Understanding governing the project; and approve the budget
changes identified above.
Prepared by: Craig Perkins, Director of Environmental and Public Works
Management
Susan Munves, Energy and Green Building Programs Coordinator
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