SR 05-24-2016 3I
City Council
Report
City Council Meeting: May 24, 2016
Agenda Item: 3.I
To: Mayor and City Council
From: Dean Kubani, Sustainability Manager, Office of Sustainability & the
Environment
Subject: Grant for Santa Monica City Yards Advanced Energy District
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to accept a grant award in the amount of $1,487,609
from the California Energy Commission: Accelerating the Deployment of
Advanced Energy Communities for the Santa Monica Advanced Energy District
project at the City Yards, and to accept all grant renewals.
2. Authorize the City Manager to execute all necessary documents to accept the
grant and all grant renewals.
3. Authorize budget changes as outlined in the Financial Impacts & Budget Actions
section of this report.
Executive Summary
On March 25, 2016, the Office of Sustainability and the Environment (OSE) received a
grant award of approximately $1.5M from the California Energy Commission for its
Santa Monica Advanced Energy District project proposal. The intent of the project is to
integrate a small, localized energy grid (microgrid) consisting of onsite renewable
generation and energy storage based at the City Yards and Bergamot Arts Center. This
microgrid would provide efficient, reliable, and cost-effective energy that has a low
environmental and carbon impact. It could also store energy, allowing the City Yards
and surrounding businesses to continue critical operations in case of a major power
outage. Grant funding for Phase 1 would be used to develop and finalize the Santa
Monica Advanced Energy District prior to the commencement of construction.
Background
On November 24, 2015, the California Energy Commission (CEC) released a grant
e submission was due to the CEC February 17,
2016. The solicitation called for applicants to propose measures to plan, design and
permit communities that:
Minimize need for new energy infrastructure costs, such as transmission and
distribution upgrades.
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Provide energy savings by achieving and maintaining zero net energy community
status (accounting for behavior and increasing loads from vehicle and appliance
electrification).
Support grid reliability and resiliency by incorporating technologies such as
energy storage.
Are financially attractive from a market standpoint (developers, home buyers,
renters).
Provide affordable access to renewable energy generation, energy efficiency
upgrades, and water efficiency and reuse technologies that reduce electricity
consumption for all electric ratepayers within the community.
Makes use of smart-grid technologies throughout the community.
Santa Monica was awarded a Phase I grant of approximately $1.5M to plan, design and
permit a small, localized energy grid (microgrid) consisting of onsite renewable
generation and energy storage based at the City Yards and Bergamot Arts Center. A
Phase II grant opportunity would become available in early 2018, which would fund $8M
for construction of such a project.
Discussion
The traditional electrical grid functions in a one-way system, in which energy is generated
from a massive power plant and transmitted one-way over hundreds of miles of
transmission lines and substations to its customers. However, as the needs of customers
have changed with electric vehicle charging, mobile and electronic device plug loads, on-
site solar and energy storage, there is a need for the grid to evolve into a decentralized
system that allows for local generation, building-to-grid or vehicle-to-grid electricity flow
and grid independence.
Microgrids provide the link between decentralized local energy generation and storage
capabilities and the larger regional grid. Generally, a microgrid consists of at least one
generation system, like solar, batteries and controls. This controlled energy system allows
for buildings or campuses to disconnect from the larger utility grid in times of outages or
emergencies. Microgrids also allow for greater optimization of onsite energy generation,
by capturing unused energy in batteries and deploying the energy when it is needed.
When the grant was announced, staff from the Office of Sustainability and the
Environment, the Public Works Department and the Planning and Community
Development Department identified the City Yards as a prime area of opportunity. This
area is ideal for several reasons:
It is City owned and operated.
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It has reached the end of its useful life and is undergoing a complete
reconfiguration through a City-led master plan effort which will coincide with the
implementation of this EPIC challenge grant.
It has aggressive sustainability goals for zero net energy, non-potable water use
and greater community integration.
It is relatively low rise, with a fairly low energy density which means that the
addition of renewable energy such as photovoltaics will likely have a surplus that
could be used in adjoining parcels.
It contains alternative fuel vehicle charging, including electric vehicles, which offers
a unique energy storage opportunity.
It may be designated as an Services Facility, acting as an operations
center for public works and first responders, thus, further necessitating local
energy sources and control.
The project concept would not be limited to the City Yards, but would seek to include
adjoining properties under City control, such as the Bergamot Arts Center. This area
would comprise the initial Santa Monica Advanced Energy District. By providing local
renewable energy, storage and electric vehicle charging and other grid services, the
Advanced Energy District can play an important and valuable role in promoting
sustainable development of the surrounding area. As an anchor to the microgrid and
major stakeholder in local redevelopment, the City can utilize policy levers and
incentives to expand the microgrid to multiple users. These policies and tools would be
explored in the grant activities.
The project would utilize four strategies to establish a multiuser microgrid. First, the City
would own and operate its own microgrid, serving the City Yards facility. Second, the
City would work with Worthe Development Group at the City-owned Bergamot Arts
Center, to develop appropriate regulations and incentives through the entitlement and
development agreement process and establish a unique partnership model. Thirdly, a
master plan over this area would be developed to delineate the integration and
interconnection between the City, the public and the utility. And finally, the City would
explore the utility of its role as a Community Choice Aggregator to incentivize, construct
and generate retail power supply.
The grant activities are being led by the Office of Sustainability and the Environment
(OSE), in close collaboration with the Public Works Department, Housing and Economic
Development Department, Planning and Community Development Department.
The Office of Sustainability and the Environment will serve as the grant
administrator, manage the primary contractors and convene the various
municipal departments, utilities, and other stakeholders.
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The Architecture Services Division will lead the City Yards Design Team to
ensure the required microgrid components are integrated into the redevelopment
project.
The Economic Development Division and the Planning and Community
Development Department will be the main points of contact and advisors to the
real estate transactions and redevelopment negotiation with the private
developer of Bergamot Arts Center.
The activities conducted under the Phase I grant award would support robust planning
of advanced energy systems. A Phase II grant opportunity would become available in
early 2018, which would fund $8M for construction of such a project. Accepting the
Phase I grant funds does not commit the City to fund the construction.
Staff will present the City Yards feasibility study to Council later this year and request
authorization to proceed with a guaranteed maximum price for design-build from
Hathaway Dinwiddie, the existing City Yards design-build contractor. If approved, funds
from the grant would be used to support the additional scope of work of microgrid
design.
Staff will return to Council with a request to authorize awarding a contract to a firm to
develop a master plan for and design the microgrid at the City Yards.
Financial Impacts and Budget Actions
Award of a $1,487,609 grant from the California Energy Commission: Accelerating the
Deployment of Advanced Energy Communities requires the following FY 2015-16
budget changes:
1. Establish revenue budget at account 20226.410360 in the amount of
$1,487,609.
2. Appropriate $1,487,609 to account C209195.589000 for expenditures related
to the City Yards Microgrid Project grant.
If renewals are awarded, budget changes would be included in subsequent year
budgets, contingent on Council budget approval.
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Prepared By:
Garrett Wong, Sustainability Analyst
Approved Forwarded to Council
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