BOARD MEETING DATE: February 2, 2007
AGENDA NO. 14

NOTE: The attached RFP has been revised
by the addition of clarifying language.  Click here for details.

Issue RFP for Renewable Energy Projects in Communities Surrounding Ten Electrical Generating Facilities

SYNOPSIS:

On September 8, 2006, Rule 1309.1 was amended with a new provision specifying the amount of mitigation fees required for electrical generating facilities to obtain credits from the Priority Reserve.  As part of the adopting resolution, the Board directed staff to use one-third of the mitigation fees collected for renewable energy projects, including solar power, in communities where the new or modified power plant projects will be located.  The current Rule 1309.1 Priority Reserve Fund balance is $15,787,452 from ten different electrical generating facilities.  This action is to issue an RFP in an amount up to $5,262,484 for renewable energy projects in the communities surrounding the ten facilities using Rule 1309.1 mitigation funds.

COMMITTEE:

Technology, January 26, 2007, Recommended for Approval

RECOMMENDED ACTIONS:

1. Establish the “Rule 1309.1 Renewable Energy Program” sub-account within the Rule 1309.1 Priority Reserve Restricted Fund #36 and recognize $5,262,484 within the fund under this new sub-account.
2. Issue RFP #P2007-26 for renewable energy projects, including solar power, in the communities surrounding ten electrical generating facilities in an amount not to exceed $5,262,484 from the new Rule 1309.1 Renewable Energy Program.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The AQMD has a long standing commitment to solar and other renewable energy technologies and continues to support the advancement and demonstration of innovative solar technologies.  Some of the solar energy projects funded by AQMD include:  the demonstration of photovoltaic-integrated roofing tiles for a new residential development in the City of Compton, a solar heating system for a community pool in the City of Sierra Madre, and the installation of photovoltaic modules (solar panels) on 60 housing units in disproportionately impacted areas.  At the AQMD headquarters building, a 20kW solar photovoltaic system has been installed on a car port to recharge electric cars and provide clean renewable electricity to the building.  Recently, the installation of a new 80kW solar photovoltaic system was completed on the roof of the AQMD headquarters building to provide renewable power for the AQMD hydrogen refueling station.  The electricity generated by the solar panels is used to power the electrolyzer that produces hydrogen fuel.

In September 2006, the Board took another important step in promoting the use of solar and other renewable energy technologies.  On September 8, 2006, Rule 1309.1 was amended with a new provision specifying the amount of mitigation fees required for electrical generating facilities to obtain credits from the Priority Reserve.  As part of the adopting resolution, the Board directed staff to use one-third of the mitigation fees collected to promote the installation of renewable energy projects, including solar power, in communities where the new or modified power generation facilities will be located.  The Board also directed staff to work with the utilities and other interested parties to establish an effective process to implement the Board’s directive.

The California Solar Initiative program took effect January 1, 2007 and provides monetary incentives to buy-down the cost of installing and operating solar photovoltaic systems.  The one-third funding for renewable energy projects would supplement the incentives, rebates and/or tax credits currently provided by other programs, such as the California Solar Initiative program, by providing additional funding to cover up to the full cost of a solar photovoltaic system.   

Proposal

Consistent with the Board’s direction, staff proposes to use one-third of the current balance of funds in the Rule 1309.1 Priority Reserve for renewable energy projects in the specific communities where the power plant projects were completed.  For new projects, the one-third funding allocation will be tracked on an individual project basis.  Staff will return to the Board to issue a new RFP for any new funding applied to the Rule 1309.1 Renewable Energy Program.

Staff is seeking Board approval to establish a new special account to track the one-third funding allocation for renewable energy projects in communities where the power plant projects are located.  The new Rule 1309.1 Renewable Energy Program will be initially funded with one-third of the balance of funds from the Rule 1309.1 Priority Reserve.  The current balance of funds in this account is $15,787,452, and one-third of these funds will be used for renewable energy projects in the communities located next to the power generation projects that resulted in payment of the mitigation fees.  The location of the power plant projects are identified below:

1.  LADWP Harbor, 161 N Island Ave, Wilmington 90744
2.  LADWP Valley, 11801 Sheldon St, Sun Valley 91352
3.  InterGen Services, 63500 19th Ave, North Palm Springs 92258
4.  Burbank (LM6000 Turbine Project), 164 W Magnolia Blvd, Burbank 91502
5.  Thums Long Beach, 1411 Pier D St, Long Beach 90802
6.  El Colton Agua Mansa, 2040 Aqua Mansa Rd, Colton 92324
7.  Vernon Malburg Station, 2715 E 50th St, Vernon 90058
8.  Magnolia Project, 164 W Magnolia Blvd, Burbank 91502
9.  City of Corona, 2205 Railroad St, Corona 92880
10.  Inland Empire Energy Center, 26226 Antelope Rd, Romoland 92585

Staff proposes to issue an RFP in an amount not to exceed $5,262,484 to solicit bids for the installation and operation of renewable energy projects, including solar power, in the communities surrounding the ten power plant projects described above.  The Rule 1309.1 Renewable Energy Program will provide an upfront financial incentive to install and operate a renewable energy project, such as a solar photovoltaic system. 

The key elements of the new renewable energy program are:

Definition of Community

For this program, the term “community” is defined as any person, business, school, governmental entity or non-profit organization living or located in the vicinity of the power plant project.  Priority will be given to those renewable energy projects that are located within a 5-mile radius of the power plant project. 

Project Type

The program will focus on funding solar photovoltaic systems, however all types of renewable energy projects may be considered.  Other solar projects may include solar water heaters and/or solar heating and cooling systems.  Non-solar renewable energy projects including wind, water, biomass, and hydrogen fuel cells are also allowed. 

Priorities for Funding

The priorities assigned to this program are listed in order of importance: 1) location of the renewable energy project relative to the power plant, 2) at least 50% of funding must be applied to residential projects, and 3) at least 50% of funding must be applied to projects located in disproportionately impacted areas.

Type of Incentive

The program will provide a one-time “upfront” monetary incentive based on the solar photovoltaic system’s capacity rating or, in the case of a non-solar electric project, the total project cost.  The incentive will be paid at the time of installation or project completion.

Funding Allocation

The incentive amount will depend on the type of renewable energy project.  For solar electric projects, the incentive is based on a specified dollar amount per kW rating of the solar electric system.  For other renewable energy projects, the incentive is based on a specific percentage of the total project cost.  The proposed incentive amounts for this program are:

Table 1 – Incentives for Solar Electric Projects

Table 2 – Incentives for Other Renewable Energy Projects

Project Eligibility

At a minimum, all systems must be installed by a California-licensed contractor, and installed in conformance with the manufacturer’s specifications and all applicable electrical and building codes and standards.  For solar photovoltaic systems, the minimum size eligible for an incentive is 1 kW, and the maximum size is 1 MW.  All solar photovoltaic systems must have a minimum 10-year warranty.   

Project Completion

The renewable energy project must be installed and in operation within 18 months of entering contract agreement.

Evaluation Criteria

The renewable energy projects will be evaluated by a diverse and technically qualified panel.  The following evaluation criteria will apply:  1) project understanding, 2) technical strength, 3) qualifications and prior experience, 4) technology innovation, 5) project management, and 6) cost-effectiveness with 10 points reserved for low-income applicants.

This RFP will solicit proposals from potential qualified contractors or individual community members planning to install and operate a solar photovoltaic system or other renewable energy project.  The proposal submittal requirements are specified in the attached RFP.

Bid Evaluation

Proposals will be evaluated by a diverse, technically qualified panel in accordance with the criteria outlined in the RFP.  Each member of the evaluation panel shall be accorded equal weight in his or her rating of proposals.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids will be published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may be notified utilizing AQMD’s own electronic listing of certified minority vendors.  Notice of the RFP/RFQ will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov/ where it can be viewed by making menu selections “Inside AQMD”/“Employment and Business Opportunities”/“Business Opportunities” or by going directly to http://www.aqmd.gov/rfp/index.html).  Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Benefits to AQMD

The successful implementation of this program will result in the increased use of clean renewable energy.  This program is expected to decrease the consumption of electricity generated from fossil-fuels, which will displace pollutant emissions, including PM10, CO and SOx.  The program will also directly benefit the communities located in the vicinity of power plants by providing incentive funds for the use of clean renewable energy.

Resource Impacts

The total cost of the proposed program shall not exceed $5,262,484.  Sufficient funds are available from the Rule 1309.1 Priority Reserve Fund.

Attachment (DOC 1749kb)
RRP #P2007-26 - Renewable Energy Projects in Communities Surrounding Ten Electrical Generating Facilities