Public Agency Law Group Attorneys At Law

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1 Attorneys At Law

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4 West Valley PG&E connection occurred October 4, 2011

5 Mission College Silicon Valley Power connection occurred November 18, 2011

6 YUBA COMMUNITY COLLEGE SOLAR ELECTRIC GENERATION TYPES Ground Mount Tracking Canopy Shelters Fixed Tilt (Williams) (Marysville, Sutter, Woodland) Tracking Canopy (20-30% more output) 6

7 Phase 1,2,3 Solar Projects Phase 1: 1.06 MW Phase 3: ~2.7 MW (Blue) Phase 2: 858 kw

8 Green Measures Conservation/Efficiency Alternative Energy Generation Defined Objectives Planning Horizon Short term: 0-5 years Medium term: 5-10 years Long Tern: 10+ years 8

9 Baseline data Policy objective Develop programs to implement policy objectives Assign responsibilities Establish targets; assessment tools Establish priorities Action plans 9

10 Energy Efficiency measures in place, or accounted for in next step In house analysis, gather all data, estimate system size Integrate future expansion plans closely Work closely with your utility, obtain buy-in, know all regulations and potential pit-falls Site placement of equipment, challenges

11 Know Your Consumption

12 Electrical Demand Consumption HVAC Equipment Controls Fans/Pumps/Dampers Architectural Features Day lighting Shade structures Window efficiency Energy Recovery 12

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15 Board Summer Work Session Central Plant Project Benefits (Initial and Long-Term Energy Savings) PG&E Rebate Estimated at $210K (Elect/Gas) Net Annual Energy Savings Start at $162K plus 4% escalator M&O Savings Start $14.4K/yr plus 4% Escalator Simple Payback Model = 14.5 Years 40 Year Model - Includes Expected Upgrades to Mechanical System Total Capital Costs = $ 9.1M Total Energy Savings = $12.3M Total Maintenance Savings = $ 1.1M Additional Electrical Savings due to On-going Renovations (Bond) If Proposed 1 MW Photovoltaic Solar Array is Constructed, Additional Electrical Savings can be achieved. Measure J (Yuba College) Program Contingency Growing due to Current Economic Bid Climate (Bid Savings) Public Agency July Law Group 14, Board Work Session Presentation

16 Alternative energy sources: solar, wind, geothermal, emerging technologies Thermal storage Cogeneration 16

17 Board Summer Work Session Photovoltaic Program Project Benefits (Initial and Long-Term Energy Savings Examples) Initial Savings: Average 1 MW = $ 5.5M (Estimated cost) PG&E Rebate = $ 1.5M (Over 5 Years) Total Net = $ 4.0M (Payback in 14 Years) Net Average Energy Savings per year - $ 250K Long-Term Savings: After 14 th Year = $ 1.3M Annual Cash Flow (District-Wide) Over 30 Years = $ 35.4M (at a 6% escalation rate) Other Potential Benefits: AB 920 Resale of Extra Energy Generation ($.08 kwh) Board Work Session Presentation July 14,

18 MOST SOURCES AGREE THAT IF THE OWNER HAS THE ABILITY TO PAY FOR OR FINANCE THE SOLAR SYSTEM, DIRECT PURCHASE PROVIDES THE MOST FINANCIAL BENEFIT. Advantages: Primary advantage: District receives the immediate and full financial benefit and savings of the power generated from the solar system because the power generated by the solar system will negate the need for the District to purchase power from the utility company. The District will, of course, be responsible for repayment of the costs incurred for the purchase and installation of the solar system, but there will be no additional charges for the purchase electricity. Savings generated as a result of the District generating its own electrical power will offset and over time completely pay for the hard costs incurred by the District for the purchase and installation of the solar system. Disadvantages: Substantial upfront costs Currently limited incentives or resources available to California governmental entities to offset the costs of purchase. (CSI Rebate) District assumes all responsibility for maintenance and repairs 18

19 California Solar Incentive Feed-In Tariffs Net Metering Renewable Energy Certificates Direct Purchase Incentives/Financing INCENTIVES FINANCING OPTIONS In addition to the limited incentives and rebates for governmental entities, there are some low-interest financing options available to the District and other governmental entities for Direct Purchase such as: ( QECBS ) California Energy Commission ( CEC ) loans Local Bonds Tax-Exempt Lease Purchase ( TELP ) New Clean Renewable Energy Bonds ( New CREBS ) These financing options are not mutually exclusive and may be used in conjunction with one another. 19

20 CSI Trigger Tracker shows how many CSI megawatts (MW) worth of rebates are available in the current incentive step level. The CSI Trigger Tracker gives an indication of whether incentive levels are expected to drop imminently by showing "MW Under Review". When the "MW Under Review" exceeds the "MW Remaining", the row is bolded. When this occurs, it is likely that any new applications will receive the next (i.e. lower) incentive step level. By comparing "MW Under Review" with "MW Remaining", users can make their own estimates of when the incentives are going to decline to the next step level. The CSI Program will be offered until the Program Administrator territory megawatt targets have been reached or until the allocated incentive budget for each Program Administrator territory has been spent, whichever occurs first. Administrator Customer Class * Current Step Initial MW in Step Unused MW from Previous Steps Revised Total MW in Step Issued Conditional Reservation Letters (MW) MW Remaining MW Under Review PGE SCE CCSE Residential Non-Residential Residential Non-Residential Residential Non-Residential

21 EPBB Payments (per Watt). Non-Residential PBI Payments (per kwh) Non-Residential Step Statewide MW in Step Residential Commercial Government/ Non-Profit Residential Commercial Government/ Non-Profit 1 50 n/a n/a n/a n/a n/a n/a 2 70 $2.50 $2.50 $3.25 $0.39 $0.39 $ $2.20 $2.20 $2.95 $0.34 $0.34 $ $1.90 $1.90 $2.65 $0.26 $0.26 $ $1.55 $1.55 $2.30 $0.22 $0.22 $ $1.10 $1.10 $1.85 $0.15 $0.15 $ $0.65 $0.65 $1.40 $0.09 $0.09 $0.19 8** 250 $0.35 $0.35 $1.10 $0.05 (a)/$0.044 (b) $0.05 (a)/$0.044 (b) $0.15 (a)/$0.139 (b) 9** 285 $0.25 $0.25 $0.90 $0.03 (a)/$0.032 (b) $0.03 (a)/$0.032 (b) $0.12 (a)/$0.114 (b) 10** 350 $0.20 $0.20 $0.70 $0.025 $0.025 $0.088 *The non-residential customer class includes commercial, private, government, and non-profit participants 21

22 Professional Consulting Services Design/Construction Design Services Energy Audit Financial Legal Construction Management Equipment Commissioning Project Inspections Project Inspector Special Test/Inspection 22

23 Financial Institution will generate all required contracts and documents Boilerplate documents Independent Review by District Counsel Ensure District s Understanding of Documents Don t be afraid to request and/or insist on modifications Re-review each and every document prior to signing Funds Provisions: Lump Sum or Escrowed Funds Reimbursement or Advance Draws 23

24 Documents prepared by Governmental Entity awarding Funds Boilerplate Documents with little or no negotiation Combined Federal and State Laws Important: Different Governmental Entities apply different Federal laws Government may review and edit Contractor Contracts 24

25 Government Code Special services and advice The legislative body of any public or municipal corporation or district may contract with and employ any persons for the furnishing to the corporation or district special services and advice in financial, economic, accounting, engineering, legal, or administrative matters if such persons are specially trained and experienced and competent to perform the special services required. The authority herein given to contract shall include the right of the legislative body of the corporation or district to contract for the issuance and preparation of payroll checks. The legislative body of the corporation or district may pay from any available funds such compensation to such persons as it deems proper for the services rendered. 25

26 Government Code 4526 Selection of professional services firms; adoption of procedures Notwithstanding any other provision of law, selection by a local agency head for professional services of private architectural, landscape architectural, engineering, environmental, land surveying, or construction project management firms shall be on the basis of demonstrated competence and on the professional qualifications necessary for the satisfactory performance of the services required. [L]ocal agency heads contracting for private architectural, landscape architectural, professional engineering, environmental, land surveying, and construction project management services may adopt by ordinance, procedures that assure that these services are engaged on the basis of demonstrated competence and qualifications for the types of services to be performed and at fair and reasonable prices to the public agencies. In addition, these procedures shall specifically prohibit practices which might result in unlawful activity including, but not limited to, rebates, kickbacks, or other unlawful consideration, and shall specifically prohibit government agency employees from participating in the selection process when those employees have a relationship with a person or business entity seeking a contract under this section which would subject those employees to the prohibition of Section

27 Government Code Construction project management services; evidence of expertise and experience Any individual or firm proposing to provide construction project management services pursuant to this chapter shall provide evidence that the individual or firm and its personnel carrying out onsite responsibilities have expertise and experience in construction project design review and evaluation, construction mobilization and supervision, bid evaluation, project scheduling, cost-benefit analysis, claims review and negotiation, and general management and administration of a construction project. Government Code 4525(e) (e) Construction project management means those services provided by a licensed architect, registered engineer, or licensed general contractor which meet the requirements of Section for management and supervision of work performed on state construction projects. California Attorney General Opinion CV We believe that the District may enter into a negotiated contract, without public bidding, with a licensed general contractor who would act as construction manager but would not perform any construction work on the project. 27

28 RFP Qualifications Administrative Requirements Insurance Licensing Personnel Proposal procedures Evaluation standards Advertisement/Notice Education Code Notice Calling for Bids or Proposals. For the purpose of securing bids or proposals the community college board shall publish at least once a week for two weeks in some newspaper of general circulation published in the district, or if there is no such paper, then in some newspaper of general circulation, circulated in the county a notice calling for bids or proposals, stating the work to be done or materials or supplies to be furnished and the time when and the place where bids or proposals will be opened. Whether or not bids or proposals are opened exactly at the time fixed in the public notice for opening bids or proposals, a bid or proposal shall not be received after that time. 28

29 Design Bid Build Traditional bid and build process Uniform Public Construction Cost Accounting Procedures Design Build Government Code 4217 Energy Conservation Projects Government Code 5956 Infrastructure financing Lease-Leaseback District Purchase of Materials/Equipment 29

30 District s Counsel should generate the requisite contracts and documents Consider Source of Funds Project Delivery Method o o Design-Bid-Build Design-Build o Energy Conservation Contract s (Government Code 4217) Law governing Contractual Provisions o State / Federal / Combination Rebate/Incentive Requirements Approved equipment Requisite Monitoring and Metering Extended Warranty Periods (10-15 years) Align Contractor Contracts with Financial Institution Contracts Single Project or Multiple Projects 30

31 Project Documents Contract Terms Partner with Contractor Federal, State or Combination Schedule for Multiple Projects District s Payments to Contractors Performance Bonds for Construction and Extended Warranty Items Payment Bond Extended Monitoring and Metering Provisions and Security therefor Annualized payments for Performance Guarantee and Maintenance Agreement Include Architect s and Construction Manager s Role/Duties Make sure you include routine construction provisions (e.g., staging and storage, fencing, signage, site clean-up, etc.) Ensure District s and Contractor s Understanding of Documents 31

32 45,000 THERMAGE USAGE COMPARISON OF SOLAR IMPLEMENTATION 800,000 40, ,000 FY11 Therms 35,000 30,000 25,000 20,000 15,000 10, , , , , ,000 FY12 Therms - Solar Implementation eff Oct-11 5, ,000 0 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 0 SPURR Therms Usage FY12 Total Therms Usage 32

33 $100,000 COST EFFECTIVENESS ON SOLAR IMPLEMENTATION $100,000 $90,000 $90,000 FY11 Cost $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 FY12 Cost - Solar Implementation eff Oct-11 $10,000 $10,000 $0 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 FY11 PG&E Cost Constellation Cost SPURR Cost FY12 Data $0 33

34 Month WV College Five-Year Electrical Demand FY FY Year FY FY FY Year Average FY Jul 465, , , , , , ,220 Aug 570, , , , , , ,082 Sep 503, , , , , , ,810 Oct 613, , , , , , ,726 Nov 540, , , , , , ,242 Dec 551, , , , , , ,502 Jan 463, , , , , , ,850 Feb 549, , , , , , ,482 Mar 542, , , , , ,935 Apr 563, , , , , ,265 May 548, , , , , ,686 Jun 477, , , , , ,456 6,390,871 6,118,714 6,760,244 6,487,611 7,267, ,049 34

35 UTILITIES - WV Fiscal Year Calendar Month PG & E / Constallation KWh Usage PG&E Cost Constellation Cost Total Cost Cost per KWh SPURR Therms Usage SPURR Cost FY11 Jul ,185 31, , $84, $ ,230 6, FY11 Aug ,631 33, , $76, $ ,210 6, FY11 Sep ,541 39, , $87, $ ,587 6, FY11 Oct ,772 38, , $84, $ ,463 22, FY11 Nov ,649 29, , $77, $ ,402 13, FY11 Dec ,456 22, , $61, $ ,747 25, FY11 Jan ,085 23, , $59, $ ,410 26, FY11 Feb ,216 28, , $71, $ ,038 21, FY11 Mar ,964 29, , $70, $ ,872 23, FY11 Apr ,740 30, , $72, $ ,194 15, FY11 May ,715 38, , $84, $ ,301 12, FY11 Jun ,135 35, , $75, $ ,541 6, FY12 Jul ,220 37, , $81, $ ,970 2, FY12 Aug ,082 37, , $78, $ ,698 2, FY12 Sep ,810 42, , $91, $ ,421 4, FY12 Oct ,726 49, , $84, $ ,006 9, FY12 Nov ,242 35, $35, $ ,880 19, FY12 Dec ,502 2, , $31, $ ,057 13, FY12 Jan ,850 11, , $39, $ ,790 15, FY12 Feb ,482 14, , $45, $ ,235 16, $269, $152, D $117, Monthly Average $29,

36 YEAR Expected Life Cost Analysis. Minimum 30 year expectancy Utility Equivalent Purchase 3% Escalation District Payment to Phase III Loan Projected CSI Rebate Annual Monitoring and PM cost Phase III- (2,708 kw DC) P.V. kwh Produced Phase III P.V. Power Production Density (kwh / kw DC) PG&E Average "Total" rate ($/kwh) 2011 $814K $977K $193K $34.5K 3,708,428 1, $832K $1,016K $192K $35.5K 3,682,469 1, $851K $1,057K $190K $36.6K 3,656,692 1, $1,564K $0 $0 $81.3K 3,024,949 1, Year Totals $34.5M $14.8M $953K $1.64M 101M kwh PROJECTED SAVINGS: Timeframe 20 Years $1.5M 30 Years $14.9M *District Initial Contribution $3,170,170

37 Phase Cost Avoidance at 20 years (in $Millions) Utility Escalatio n Rate Cost Avoidance at 30 years (in $Millions) 1% 3% 5% 1% 3% 5% Financing Method Rebates Phase 1 $2.1M $2.9M $4.0M $ 5.5M $8.1M $11.7M Traditional SGIP Phase 2 -$.9M $.19M $1.5M $1.9M $4.7M $8.5M Bond / Traditional CSI Phase 3 -$2.0M $1.4M $5.8M $6.3M $14.9M $27.4M Bond / CREB Costs Include: 3 rd Party Monitoring Cost for all projects CSI (partial) Total -$0.8M $4.5M $11.3M $13.7M $27.7M $47.6M

38 You now have a Utility, treat it as such Ongoing O+M, PM, un-foreseen failures can and inevitably will push back payoff dates Equipment Failures hit twice Analyze results annually Tailor Efficiency measures to mitigate degradation E.O.L. - Plan for replacement funding potential

39 Attorneys At Law Debby L. Watson 222 North Sepulveda Blvd., Suite 1690 El Segundo, California Telephone Facsimile