South Coast Air Quality Management District

Authorize Purchase and Installation of Additional MicroTurbine Equipment from AES Settlement Fund

SYNOPSIS: 

The Board previously authorized the purchase and installation of Capstone MicroTurbines. An additional $260,000 is required to purchase and install heat recovery equipment, external silencers, and a MicroTurbine. Funds are available from the accrued interest in the AES Settlement Fund.

COMMITTEE: 

None

RECOMMENDED ACTION:

1. Authorize the Executive Officer to contract with Capstone California to purchase Heat Exchangers, Silencers, one 60-kW MicroTurbine and associated equipment, and assist with their installation in an amount not to exceed $260,000 from the AES Settlement Fund.
   
   
2. Authorize the Executive Officer to apply for CPUC Self Generation incentive money for all eligible MicroTurbines installed with AES or DWP Settlement Funds.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

At the April 20, 2001 meeting, the Governing Board approved the expenditure of up to $1,440,000 for the purchase of several 30-kW and 60-kW microturbines, and up to $300,000 for assistance with their installation. Purchase orders have been issued to Capstone for 29 machines and agreements are being negotiated for installation at 17 sites within the Counties of Orange, Riverside, and San Bernadino.

Proposal

Recovery of exhaust heat energy increases the efficiency of gas turbines, lowering emissions per unit of energy output. Addition of heat exchangers is therefore desirable to microturbine installations. In addition, the California Public Utilities Commission (CPUC) has recently unveiled a Self-Generation incentives program that offers cash incentives for microturbine purchases and usage. Installation of heat recovery equipment is a pre-requisite for eligibility in this program. External Silencers are devices that lower the noise level in microturbines and are desirable in most populated locations, with the exception of landfills. One additional 60-kW microturbine is required for maintaining a balance of a total 480 kW distributed generation capacity for each one of the three counties of Orange, Riverside, and San Bernadino. Staff requests the following additional funding:
 

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for sole source awards is made under provision B.2.c: The desired services are available from only the sole-source based upon one or more of the following reasons:

(1) The unique experience and capabilities of the proposed contractor or contractor team;
      and
(2) The project involves the use of proprietary technology.

This project is a continuation of a previous project authorized by the Board on April 20, 2001, as noted in the Background, where further details may be found.

Resource Impacts

AQMD funding for this additional purchase and installation of one microturbine, heat exchangers, silencers, and associated equipment shall not exceed $260,000. Funds are available in the AES Settlement Fund, resulting from accrued interest. Staff will apply to the PUC for reimbursement through the self-generation incentive program. Any grants received will be used to replenish the AES Settlement Fund.

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