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SR 10-25-2016 3I Ci ty Council Report City Council Meeting : October 25, 2016 Agenda Item: 3.I 1 of 6 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 2 of 6 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). 3 of 6  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 4 of 6 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 5 of 6 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. 6 of 6 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)