SR 10-25-2016 3I
Ci ty Council
Report
City Council Meeting : October 25, 2016
Agenda Item: 3.I
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To: Mayor and City Council
From: Dean Kubani, Assistant Director , Office of Sustainability & the Environment
Subject: Consultant for Multiuser Microgrid Design Services under California Energy
Commission Grant
Recommended Action
Staff recommends that th e City Council:
1. Award RFP #83 to Arup North America, Ltd., a California –based company, for
professional services to aid in design and development of the proposed microgrid
at the City Yards and Bergamot Station ; and
2. Authorize the City Manager to negotiate and execute an agreement with Arup
North America, Ltd., a California –based company, for professional services to aid
in design and development of the proposed microgrid at the City Yards and
Bergamot Station in an amount not to exceed $1,114,752 over a 2 -y ear period,
with future year funding contin gent on Council budget approval.
Executive Summary
On March 25, 2016, the City of Santa Monica received a grant award of approximately
$1.5M from the California Energy Commission for its Santa Monica Advanced Ene rgy
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 provid e
efficient, reliable, cost -effective energy that has a low environmental and carbon impact.
On July 7, 2016, City staff published a Request for Proposals to provide multiuser
microgrid design services as required by the Office of Sustainability and the
En vironment. Staff recommends Council approve the selection of Arup North America,
Ltd. and authorize the City Manager to negotiate and execute an agreement with Arup
for a total amount not to exceed $1 ,114 ,752 .
Background
On November 24, 2015, the Califo rnia Energy Commission (CEC) released a grant
funding opportunity entitled “The EPIC Challenge: Accelerating the Deployment of
Advanced Energy Communities.” On Febru ary 17, 2016, staff submitted an application
to the CEC . On March 25, 2016, the CEC issued a notice of proposed awards, naming
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the City as one of several grant recipients in the State. On June 14, 2016, Council
adopted a resolution to accept the grant award.
This grant is a part of a two -part grant program in which Phase I funds up to a maximu m
of $1.5M are to be used to plan, design and permit projects that incorporate local
renewable energy generation, grid reliability and community energy resilience. A Phase
II grant will be issued in early 2018, which would fund up to $8M for construction o f such
a project. This is a separate competitive grant process that would be available to all
Phase I recipients, including the City.
Discussion
The traditional utility grid – where large centralized power plants transmit energy in one
direction – is curr ently undergoing a major transformation. As local energy resources
like rooftop solar and energy storage systems continue to proliferate, utility -scale assets
like power plants, power lines and transformers, are giving way to smaller -scale
systems that are privately owned by the energy users themselves. Local energy
resources provide local benefits to the users by providing lower costs of energy,
reliability and control over energy sources. These local energy resources also have the
ability to provide benef its to the utility grid that reduce the need for large -scale power
plants, distribution lines and substations, and accommodate local control of energy
systems. Planning for local energy resources can help to solve many issues as
increasing local energy gen eration, electric vehicle charging, and plug loads continue to
transform and stress the aging electric grid infrastructure.
The CEC grant solicitation called for applicants to propose measures to plan, design
and permit projects that:
Minimize need for ne w energy infrastructure costs, such as transmission and
distribution upgrades.
Provide energy savings by achieving and maintaining zero net energy community
status (accounting for behavior and increasing loads from vehicle and appliance
electrification).
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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 effic iency
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.
The City applied for and was awarded a grant of $1,487,609 to design and develop a
multiuser microgrid , known as the Santa Monica Advanced Energy District , which would
be based at the City Yards facility. This multiuser microgrid would be designed,
developed and incorporated into the City Yards Moder nization Project.
The Santa Monica Advanced Energy District is an important and valuable element of
the anticipated redevelopment approach and planned use of the City Yards and
surrounding areas. By integrating site -based renewable energy sources , like ro oftop
solar, with emergency power capability , battery storage and sophisticated load
management technologies through a microgrid -based design, this project w ould provide
robust resiliency features and disaster preparedness to critical municipal services
lo cated at the City Yards .
The project w ould utilize four strategies to establish a multiuser microgrid. First, the City
w ould own and operate its own microgrid, serving the City Yards facility. Second, the
City w ould work with Worthe Development Group at t he City -owned Bergamot Arts
Center, through the entitlement and development agreement process to possibly
connect that project to the City Yards microgrid and possibly expand the microgrid to
the Bergamot Arts Center . While not critical to success of the m icrogrid project,
establishing the requirements and protocol for the private development w ould provide a
foundation for future integration. Thirdly, a master plan for this area w ould be developed
to delineate the integration and interconnection between the City, the public and the
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utility. And finally, the City w ould explore the feasibility to incentivize, construct and
generate retail power supply as part of a broader community choice energy program .
Under this model, community choice aggregation (CCA) cou ld afford the City the
opportunity to build and supply excess renewable energy to CCA customers.
Contractor Selection
On July 7, 2016, City staff published a Notice Inviting Bids to provide multiuser
microgrid design services in acco rdance with City speci fications . The Request for
Proposals was posted on the City's on -line bidding site , and notices were advertised in
the Santa Monica Daily Press in accordance with City Charter and Municipal Code
provisions . A total of 44 vendors downloaded the request for proposals documents.
Five responses were received and publicly opened on July 28. The five responses were
from Arup North America, Ltd, DNV -GL, Integral Group, Base Energy and Solar
Forward.
The proposals were evaluated based on experience, technical co mpetence, ability to
meet the proposed work plan timelines, references and cost of services .
A se lection committee consisting of representatives from the Office of Sustainability and
the Environment and the Public Works Department reviewed the applicatio ns and
scored all responsive proposals on August 18, 2016. The final scores were averaged
and then use d to select the winning bidder : Arup .
Arup was selected based on its technical experience in advanced distributed energy
planning and project management , as well as its cost of services . Arup has designed or
is designing micro -grids and advanced energy systems around the world and has
significant expertise in this field. Current projects include the design of the largest
privately -owned microgrid in the US A, currently under development in Northern
California and a community -based micro -grid in Cambridge, MA. Arup has been
involved in power generation and alternative energy systems for more than 20 years,
including the design of micro -grids, renewable energy systems, co -generation and tri -
generation systems, energy storage and the planning of advanced approaches to
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infrastructure for communities around the world. Arup has extensive current and past
experience in assessing and implementing advanced energy sys tems at the building,
community and city level. Located in Playa Vista, Arup’s proximity to Santa Monica for
close collaboration will provide a great value to the project and to the existing City Yards
project team. This also limits the amount of grant fun ding that would be spent on travel
for other firms that required air travel. Arup will provide high -level planning, engineering,
and energy analysis across all involved project sites as well as transaction advisory
services to identify the governance and f inancial organization for a multiuser microgrid
based within the City Yards.
Arup’s team of subconsultants consists of UC Irvine’s Advanced Power and Energy
Program (UCI), Energy Environment Economics (E3) and ICLEI – Local Governments
for Sustainability (ICLEI). UCI provides industry expertise and field research covering
the utilization of local energy resources , like solar, battery storage and connected and
controllable energy loads from a systems perspective. Arup will provide an analysis of
the various microgrid scenarios considered on this project, including the preparation of
load flow simulations, and what role electric vehicle charging can play in the project.
They will also provide support during interactions with Southern California Edison, with
r egards to how the microgrid will interact with Edison’s utility grid . E3 will perform cost -
benefit analysis for the various microgrid scenarios, in line with the California Standard
Practice Manual for cost -effectiveness evaluation. Value implications woul d be focused
on the participants of the microgrid, nonparticipating ratepayers, the utility and society
as a whole. ICLEI provides a global network and tools for local governments leading in
climate change and sustainability efforts. ICLEI also supports th e climate action
planning tools that are used by the City and that of hundreds of other local governments
around the world. ICLEI will conduct research on successful microgrids, district energy
plans, and barriers to microgrid/district energy development i n order to inform the
design of this project . ICLEI will also document the project process, prepare case
studies, prepare an outreach plan and support the City in sharing its grant -funded
efforts. ICLEI's climate action planning tools will also be tested t o better understand the
GHG emissions impact from microgrids.
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Arup , and its team , will liaise and collaborate with the existing City Yards redevelopment
design -build contractor, Hathaway Dinwiddie, to incorporate the additional
considera tions necessary fo r a microgrid. G rant fund s in the amount of $372 ,857 will
support the additional scope of work and budget for Hathaway Dinwiddie and its project
team beyond what has been proposed in their guaranteed maximum p rice bid . This will
be incorporated into the gu aranteed maximum price for design that will be presented to
Council for approval along with the City Yards feasibility study later this year. All
activities described will be fully funded by the grant from the CEC.
Financial Impacts and Budget Actions
The agreement to be awarded to Arup North America, Ltd. is for an amount not to
exceed $1 ,114 ,752 . Funds are available in the FY 2016 -17 Capital Improvement
Pro g r am budget. The agreement will be charged to CEC grant expense account
C209195.589000 . Future yea r funding is contingent on Council budget approval.
Prepared By: Garrett Wong, Sustainability Analyst
Approved
Forwarded to Council
Attachments:
A. July 14, 2016 Council Meeting
Reference:
Agreement No. 10376
(CCS)