IMPERIAL IRRIGATION DISTRICT Energy Consumers Advisory Committee

Transcription

1 IMPERIAL IRRIGATION DISTRICT Energy Consumers Advisory Committee Avenue 58 Meeting Locations: Bill Condit Auditorium IID Boardroom 1285 Broadway Avenue Avenue 58 El Centro, CA La Quinta, CA REGULAR MEETING: Monday, April 6, 2015, 6 p.m. ECAC Committee Members Division 1 Matt Dessert Mark Larson Thomas Brinkerhoff Division 2 Bruce Kuhn Shorty Hickingbottom Gil Perez* Division 3 James C. Hanks Gerald Gauna Eric Reyes Division 4 Steven Benson John Hernandez*ⱡ Eugene F. Bumbera Division 5 Norma Sierra Galindo Michael Anderson Esther Gomez (Vice Chair) City of Coachella Betty Sanchez Richard Macknicki City of Indio Lupe Ramos-Watson (Chair) Brian Macy City of La Quinta Lee Osborne, CPAⱡ Mark Weber* County of Riverside Becky Broughton Patricia Saleh Steven Bayard*ⱡ Cities of Palm Desert & Rancho Mirage Paul Gibson * PBC Subcommittee Member ⱡ Budget Subcommittee Member Agenda I. CALL TO ORDER / PLEDGE OF ALLEGIANCE / ROLL CALL II. PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA - Statement of Procedures This is a public meeting and this is the time for public comment. At this time, you may be heard on any item not listed on the agenda. Those who wish to address the Committee should come to the microphone and state your name and address for the record. The Chair reserves the right to limit the speaker s time and we request that you limit your remarks to no more than five minutes. The comment period will be limited to 10 minutes. Please note the Committee may make a recommendation on any item on the agenda. CONSENT CALENDAR III. Approval of Minutes for March 2, IV. Approval of Minutes for March 23, V. March Year-to-Date Attendance Report CONSENT ITEMS ADDED TO ACTION AGENDA ACTION ITEMS VI. Proposed Change to Regulation 11; Discontinuance and Refusal of Service (M. Pimentel).. 9 VII. 70SM1 8ME, LLC Generator Interconnection Agreement (K. Fitzgerald) VIII. 70SM1 8ME, LLC Transmission Service Agreement No (K. Fitzgerald). 23 IX. 83WI 8ME, LLC Transmission Service Agreement No (K. Fitzgerald) X. SEPV Imperial, LLC - Dixieland West Solar Project Feed-In Tariff PPA (R. Pena). 58 XI. SEPV Imperial, LLC - Dixieland East Solar Project Feed-In Tariff PPA (R. Pena) 66 XII. Ocotillo Express, LLC Back-Feed and Station Service Agreement (R. Pena). 74 XIII. Battery Energy Storage System MWA (D. Escobar) 95 REPORTS AND INFORMATIONAL ITEMS XIV. Department Update (C. Stills) Member Comments (Committee) Next Meeting: May 4, p.m. Adjournment IID Energy Department 1651 W. Main Street, El Centro, CA Avenue 58, La Quinta, CA Rosa Maria Gonzales rmgonzales@iid.com O: M:

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3 IMPERIAL IRRIGATION DISTRICT Energy Consumers Advisory Committee March 2, 2015 Meeting Locations: IID Boardrooms, El Centro and La Quinta, CA 1 MINUTES I. CALL TO ORDER / PLEDGE OF ALLEGIANCE / ROLL CALL. Vice Chair Esther Gomez called the meeting to order at 6:02 p.m. and Mr. Hernandez led in the Pledge of Allegiance. Members present (El Centro): Thomas Brinkerhoff, Eugene Bumbera, Esther Gomez, John Hernandez, Shorty Hickingbottom and Gil Perez Members present (La Quinta): Steven Bayard, Becky Broughton, Paul Gibson, Richard Macknicki, Brian Macy, Patricia Saleh, Lupe Ramos-Watson, Betty Sanchez and Mark Weber Members absent: Michael Anderson, Gerald Gauna, Mark Larson, Lee Osborne and Eric Reyes II. PUBLIC COMMENT. There were no public comments. III. APPROVAL OF MINUTES FOR FEBRUARY 2, Mr. Bayard brought to attention the date for the approval of the previous minutes should be changed from February to January. A motion was made by Mr. Hernandez and seconded by Mr. Bumbera to approve the ECAC Meeting Minutes of February 2, 2015, as amended. Motion carried , with Mr. Perez abstaining. IV. FEBRUARY YEAR-TO-DATE ATTENDANCE REPORT. A motion was made by Mr. Bayard and seconded by Ms. Broughton to approve the February 2015 Year-to-Date Attendance Report. Motion carried unanimously. Mr. Bayard requested the member appointment dates be reviewed. SUPPLEMENTAL ITEM II. ENERGY COST ADJUSTMENT. Ms. Belen Valenzuela, interim chief financial officer, recapitulated information given at the public workshop in January regarding the new Energy Cost Adjustment (ECA) formula, at the request of Director Norma Sierra-Galindo. The material outlines how the bill format has changed and how the ECA has been computed since January Restructured based on industry standards, the bill is now a pass-through and collects for fixed charges that are related to the purchased power and fuel expenses, such as capacity and falling water charges. It also allows IID to recover from market volatility and regulatory changes. The ECA is billed monthly per kilowatt-hour (kwh), along with the base rate and regulated surcharges. The ECA is set at zero for 2015 and a true up will be implemented in 2016, after 12 months of actual expenses have been accrued. Ms. Valenzuela presented three scenarios with purchased power and fuel costs less than, greater than and equal to the base ECA. Mr. Hernandez inquired if factual information was used in these scenarios, to which Ms. Valenzuela replied they are 2014 forecasts. Going forward, the actual 2014 numbers will be used. Ms. Valenzuela stated an ECAR for renewables can be found on the bill, which is also a passthrough. It is the incremental cost difference between the cost to meet the state s Renewable Portfolio Standards (RPS) and the cost that has been figured should the RPS not be implemented. The ECAR is set for $ per kwh for Chairwoman Ramos-Watson requested the percentage of consumers that are seasonal. Ms. Valenzuela explained a monthly count is kept of meters that are on and off. They come on around September or October and go off in April. Chairwoman Ramos-Watson asked if they physically turn on and off or consumption drops. Ms. Valenzuela commented some actually turn off, but for others, the consumption drops down. V. MWA DROP 4 UNIT 1 HYDROELECTRIC PLANT MAJOR REFURBISHMENT.

4 IID Energy Consumer Advisory Committee Meeting Minutes / March 2, Mr. Michael Taylor, assistant energy manager, presented a request to perform a major refurbishment on Drop 4 Unit 1, which is a 10-megawatt (MW) Kaplan Turbine that was commissioned in The refurbishment is required on the 60-year old unit, as it has never had a major overhaul and a visual inspection in early January 2014 confirmed a single fracture in the Blade #5 trunnion area. Through a competitive bid process under Secondary Request for Proposal No. 14, the Energy Department selected Weir American Hydro to perform the refurbishment at a total cost of $12,506,022. Responding to a question from Mr. Perez, Mr. Taylor clarified there are two units at Drop 4. Mr. Hernandez questioned if the refurbishment is similar to the one carried out in 2007 and the cost difference. Mr. Taylor answered it is a similar refurbishment; however, Unit 2 is a slightly different turbine and does not have the same blades. The costs increased with this refurbishment, but were not available at the time of the meeting. Mr. Bayard asked why the abrasion coating guarantee is only for one year. Mr. Taylor shared the abrasion coating will be dependent on what the contractor provides. It is an epoxy coating that goes on the wet surface of the turbine. The turbulent water path and considerable amount of sand and dirt wear on the coating. As the consultants assisted with the Scope of Work for this specification, they felt this was a reasonable, achievable goal and any coating that did not last a year should be replaced and the guarantee extended an additional year. Mr. Weber inquired about the rationale behind taking $3 million from Public Benefit Funds. Mr. Taylor articulated Drop 4 Unit 1 is a green energy source. It is an efficient turbine that produces energy at some of the lowest costs available to IID. That efficiency, plus the renewable resource and the benefit to customers, warrants the use of the previously earmarked Public Benefit Funds. Mr. Weber inquired if IID gets renewable energy credits for the unit, to which Mr. Taylor responded in the affirmative and said Unit 1 helps IID meet the RPS requirements. A motion was made by Mr. Bumbera and seconded by Mr. Brinkerhoff to approve Major Work Authorization for the Drop 4 Unit 1 Hydroelectric Plant Major Refurbishment Project. Motion carried unanimously. VI. GIA SEVILLE SOLAR II, LLC 32MW. This item was pulled from the agenda. VII. SERVICE AGREEMENT AMENDMENT NO. 1 - RELIABLE POWER SOLUTIONS, INC.. Mr. Paul Peschel, manager, Planning and Engineering, sought a recommendation to the Board of Directors for approval of Amendment No. 1 to Service Agreement No with Reliable Power Solution, Inc. The amendment will increase from its present value of $160,000 to a new notto-exceed amount of $360,000, with a time extension through April 30, The amendment is critical, due to the numerous Energy projects and limited specialized personnel to perform analyses associated with system impact and affected system studies. Chairwoman Ramos-Watson asked for the timeline of the Request for Proposal (RFP). Mr. Peschel voiced it is hard to say, as some studies can take up to six months; so it could be about one year. Chairwoman Ramos-Watson then inquired if April 30 of next year would be a good estimate. Mr. Peschel hoped there is a little buffer. If that much time and money are not needed, it will be discontinued when the Secondary Request for Proposal is in place. Mr. Perez requested the source of funding, to which Mr. Peschel specified the effort would be supported by individual capital projects approved for Mr. Peschel confirmed Mr. Hernandez s observation that this is an extension of an existing contract. Mr. Hernandez recounted the original was for $160,000 and this is for another $200,000. He pointed out staff mentioned having this in place in order to go out for an RFP on another project and questioned why this consultant did not participate in the RFP process. Mr. Peschel communicated the original was a sole source. 2

5 IID Energy Consumer Advisory Committee Meeting Minutes / March 2, Mr. Hernandez inquired if this consultant would be used for another five years. Mr. Peschel conveyed this is intended to be for one year, at most. Mr. Hernandez was under the impression the last time would be for a couple years and the request is for another year. Mr. Peschel disclosed this is for different work, which would extend the contract for another year or so and they may end up being hired on further if they are selected as the top consultant. Mr. Hernandez wondered if this type of expertise should be looked at in-house. Mr. Carl Stills, energy manager, advised he would talk about the issue in the Department Update. A motion was made by Mr. Weber and seconded by Mr. Perez to approve Amendment No. 1 to Service Agreement for Reliable Power Solution, Inc. Motion carried , with Mr. Hernandez opposing. SUPPLEMENTAL ITEM I. MWA NO COACHELLA VALLEY TO RAMON/DEVERS 230KV LINE UPGRADE (PATH 42) IMPLEMENTATION CLOSURE. Mr. David Escobar, senior project manager, reported the Coachella Valley to Ramon/Devers 230 kilovolt (kv) Line Upgrade Project (Path 42) was approved as Project Number P-6797 on August 16, The Path 42 Transmission Line was placed in service on January 14, Remaining work will be completed over the next three months, with a revised project completion date of May 23, The schedule was extended and expenses increased due to the federal government shutdown, which resulted in several mitigating factors including, the extension of the transmission line stringing activities, environmental issues, inclement weather and outage coordination with neighboring utilities. The estimated cost associated with Amendment No. 3 is an increase of $1,678,279. The total authorized expenditure under the Major Work Authorization (MWA) is $32,079,118, which will increase the MWA cost to $33,757,397. Mr. Perez inquired if the cost overruns would be reduced if the negotiations are successful and what caused the unexpected costs. Mr. Escobar reiterated it would be reduced to $699,317 and they were caused by change orders to remobilizing the contractor, environmental issues with the bird nesting season and the permitting processes. Mr. Stills added that, as part of the environmental process, inspectors are sent out to find birds; if found during the nesting season, work will be delayed. Mr. Stills referenced utilizing Abengoa for Path 42, whose price was $3 million lower than the next highest bidder. Mr. Stills complimented the Portfolio Management Office staff on the job of bringing the project to a close under the cost of the next highest bidder, despite all the issues they encountered. Mr. Perez questioned why the government shut down. Mr. Stills verbalized they could not pass the budget. In addition, the regulatory agencies then shut down, which further delayed inspections. A motion was made by Ms. Broughton and seconded by Mr. Perez to approve Amendment No. 3 to MWA Motion carried unanimously. VII. DEPARTMENT UPDATE. Mr. Stills acknowledged the recent rain, but reported the system performed well. There were a few trips, mostly on the distribution system, as well as a water leak at the Coachella Valley Substation that reached the communication equipment and burned out a power supply. As a result, the Midway to CV KN/KS Transmission Line was on local relay protection. There were a series of meetings with California Independent Systtem Operator (CAISO) Board of Governors David Olsen and two California Public Utility Commission representatives (CPUC) regarding the transmission and Maximum Import Capability (MIC) issues, in which the conversations went extremely well. The Renewable Energy Summit is March th, of which an invitation was extended. Changes have been made in the transmission planning process. Mr. Esteban Martinez, who was the chief electrical engineer, has been moved to Transmission Planning, as he is uniquely qualified 3

6 IID Energy Consumer Advisory Committee Meeting Minutes / March 2, to lead that effort. A consultant will be brought in to analyze the planning processes. The regional and local requirements need to be defined, as well as the short-, mid- and long-term planning processes. Mr. Noe Gutierrez was moved into Mr. Martinez s former spot and will oversee Engineering in supporting capital projects. IX. MEMBER COMMENTS. Chairwoman Ramos-Watson noted everything went smoothly in the Coachella Valley with the rain, which was appreciated. Ms. Saleh commented there must be some way of getting those birds to nest somewhere else, which would be a worthwhile effort. Ms. Broughton added that developing that method for the birds would be interesting and she would be happy to see those birds nesting elsewhere. Chairwoman Ramos-Watson thanked everyone for their participation and preparation for the meetings. She thanked staff for the reports being understandable and comprehensive. X. ADJOURNMENT. There being no further discussion, the ECAC Meeting was adjourned at 7:12 p.m. 4

7 IMPERIAL IRRIGATION DISTRICT Energy Consumers Advisory Committee March 23, 2015 Meeting Locations: IID Boardrooms, El Centro and La Quinta, CA 5 MINUTES I. CALL TO ORDER / PLEDGE OF ALLEGIANCE / ROLL CALL. Chairwoman Lupe Ramos-Watson called the special meeting to order at 6:04 p.m. and led in the Pledge of Allegiance. Members present (El Centro): Michael Anderson, Thomas Brinkerhoff, Eugene Bumbera, Esther Gomez, John Hernandez, Shorty Hickingbottom, Mark Larson, Gil Perez and Eric Reyes Members present (La Quinta): Steven Bayard, Richard Macknicki, Brian Macy, Lee Osborne, Lupe Ramos-Watson, Patricia Saleh and Mark Weber Members absent: Becky Broughton, Gerald Gauna, Paul Gibson and Betty Sanchez II. PUBLIC COMMENT. There were no public comments. Mr. Carl Stills, energy manager, prefaced the presentations by stating the Seville Solar One, LLC Transmission Service Agreement (TSA) and Seville Solar Two, LLC Generator Interconnection Agreement needed to come before this Committee; however, extended staff s apologies for a glitch in the system, which resulted in the agenda not getting posted in time to meet Brown Act requirements. The items would be presented, but voting would not ensue. Chairwoman Ramos-Watson thanked the Committee for making themselves available on short notice for this special meeting and reiterated there would be no action taken on the items. She assured member feedback would be relayed to the Board for consideration at their meeting the following day, where staff would seek approval of the items. III. TRANSMISSION SERVICE AGREEMENT FOR SEVILLE SOLAR ONE, LLC. Ms. Kelli Fitzgerald, senior interconnect contract specialist, presented the proposed Transmission Service Agreement No with Seville Solar One, LLC. The contract would allow for longterm firm, point-to-point transmission service for 20 megawatts (MW) of energy over a 21 year term, with the receiving party being San Diego Gas & Electric. The pro forma agreement is subject to IID s Open Access Transmission Tariff (OATT) and annual revenues would be approximately $177,000. Service is anticipated to commence on August 1, In response to Mr. Perez s inquiry regarding the annual revenue of $177,000, Ms. Fitzgerald communicated that the annual revenue is for transmission service only and does not include ancillary services. IID will receive this revenue once the transmission rate credits that are due to the customer are exhausted. Mr. Perez questioned if there was a cost involved. Ms. Fitzgerald reported the cost for the project to interconnect is included on a separate contract, which was brought to the Committee about this time last year. A generator interconnection agreement has been executed and is in the construction process. It is an ongoing project, in which the company is funding about $5.5 million in network upgrades in order to interconnect. Mr. Hernandez inquired if the location was at the Allegretti Farms property. Ms. Fitzgerald responded in the affirmative, as it is being built on private land; however no agricultural land was taken out of production. Mr. Hernandez asked a series of questions concerning the standardization of TSA s, the terms regarding operations and maintenance and if there are TSA s for solar projects. Ms. Fitzgerald confirmed this is a standard agreement and there are TSA s for solar projects. The terms are generally requested by the developer and match their power purchase agreement (PPA). It is designed to last for the length of that term and they may extend the contract once it ends. The OATT rate incorporates operations and maintenance; therefore there is no separate cost. Vice Chair Gomez questioned if these items would be brought to the April ECAC meeting to reconfirm Committee comments. Chairwoman Ramos-Watson explained the Board is taking action the following day, which is the final step, and the Committee would not need to take further action.

8 IID Energy Consumer Advisory Committee Special Meeting Minutes / March 23, Mr. Bayard questioned where the $177,000 is going towards. Ms. Fitzgerald clarified that the transmission rate is based on cost of service and that it reimburses IID. In addition, revenue is posted to a specific Federal Energy Regulatory Commission (FERC) account. Mr. Bayard observed it would be $3.5 million to maintain this project over 21 years. Mr. Stills confirmed, but pointed out the customer will provide the money up front and as IID collects revenue, that cost is credited. Chairwoman Ramos-Watson requested staff to keep the Committee abreast of this item, following the Board s action. IV. GENERATOR INTERCONNECTION AGREEMENT FOR SEVILLE SOLAR TWO, LLC 32MW. SOLAR PHOTOVOLTAIC PROJECT. Ms. Fitzgerald also presented a Generator Interconnection Agreement for Seville Solar Two, LLC 32 Megawatt Solar Photovoltaic project. The request was processed through IID s OATT and is customer funded, with an estimated cost of $1,485,300. $1,299,300 in IID network upgrades will be completed, which are eligible for transmission rate credits. The project s location is adjacent to Seville Solar One, LLC, with which interconnection facilities will be jointly used. The point of interconnection is the Anza Substation and planned in-service date is August Mr. Hernandez inquired about the PPA, to which Ms. Fitzgerald answered it was brought to the ECAC in the last six to eight months and has been executed. Mr. Hernandez expressed concern over costs in comparison to similar PPA s. Mr. Stills shared that the cost with this PPA was beneficial to IID at $68 per MW, including the upgrades to interconnect. Mr. Weber requested the total acreage used for Seville Solar I and II. Ms. Fitzgerald reported 640 acres, adding that the project proponent, Mr. David Janigan was present to answer any questions. Mr. Weber asked if a third project was a possibility. Mr. Janigan confirmed the company is exploring other possibilities, as there is enough room for additional 85 MW. Mr. Weber questioned if the panels rotate, to which Mr. Janigan explained single planes are used, allowing for rotation in one orientation. IX. MEMBER COMMENTS. Mr. Stills confirmed Mr. Weber s comment that the cost to procure brown power is about half the cost of solar, which Mr. Stills added, generally runs $40 to $45. Mr. Weber wanted to ensure customers are aware that there are pros and cons of using solar and being green. Mr. Bayard shared it was a pleasure to attend the Renewable Energy Summit in Winterhaven. He received information on a program called Home Energy Renovation Opportunity (HERO), which he would be glad to share. The program offers loans at very low rates for an air conditioning system. Eligible applicants can get a 2.99 percent rate through the program, rather than a commercial rate of 12 to 15 percent for owners. As for renters, the landlord would get a higher rate, but it would still be very good. Chairwoman Ramos-Watson commented HERO is a program that should require more outreach and will be presented in a future ECAC meeting so that the information can be shared with the community. Mr. Weber shed light on the Property Assessed Clean Energy (PACE) program, which is intended to help rate payers that cannot pay out of pocket to install a high-efficiency air conditioning unit or solar. In addition to HERO, YGrene Energy is also an option that he looks forward to hearing more about. X. ADJOURNMENT. There being no further discussion, the ECAC Special Meeting was adjourned at 6:35 p.m. 2

9 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 7 TO: FROM: SUBJECT: ECAC Members Rosa Maria Gonzales, ECAC coordinator March 2015 Year-to-Date ECAC Attendance Report DATE: April 6, 2015 Staff Recommendation/Motion: Staff recommends approval of the March 2015 Year-to-Date Attendance Report of the ECAC. Financial Analysis: None. Background: The presence and absence of Committee members is recorded at each meeting, as a matter of record in ensuring a quorum was present to conduct the business affairs of the group.

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11 8 ECAC Attendance Report Year-to-Date March 2015 Name / Division Appt Term End Jan 5 Feb 2 Mar 2 *Mar 23 Apr 6 May 4 Jun 1 Jul 6 Aug 3 *Sep 14 Oct 5 Nov 2 Dec 7 Division 1 - Matt Dessert Mr. Thomas Brinkerhoff Mar 2013 Dec Mr. Mark Larson Nov 2011 Dec Division 2 - Bruce Kuhn Mr. Gil Perez Jan 2013 Dec Mr. Shorty Hickingbottom Feb 2013 Dec Division 3 - James Hanks Mr. Eric Reyes Feb 2014 Dec Mr. Gerald Gauna May 2013 Dec Division 4 - Steve Benson Mr. John Hernandez Jan 2013 Dec Mr. Eugene Bumbera Mar 2013 Mar Division 5 - Norma Sierra Galindo Ms. Esther Gomez Feb 2011 Dec Mr. Michael Anderson Jan 2009 Dec City of La Quinta Mr. Lee Osborne, CPA Feb 2012 Dec Mr. Mark Weber Feb 2012 Dec City of Coachella Mr. Richard Macknicki Jan 2009 Dec Betty Sanchez Feb 2015 Dec City of Indio Ms. Lupe Ramos Watson Jan 2009 Dec Mr. Brian Macy Dec 2013 Dec County of Riverside Ms. Becky Broughton Jan 2009 Dec 2o Ms. Patricia Saleh Nov 2009 Dec Mr. Steven Bayard Jun 2010 Dec Cities of Palm Desert / Rancho Mirage Mr. Paul Gibson Dec 2013 Dec * Denotes special meetings or training. 15

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13 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 9 TO: FROM: SUBJECT: ECAC Members Mario Pimentel, superintendent, Power Troubleshooters Proposed Change to Regulation 11; Discontinuance and Refusal of Service DATE: April 6, 2015 Staff Recommendation/Motion: Staff is presenting this matter to the ECAC members and seeking a recommendation for Board approval. Financial Analysis: There is no financial impact to the district due to this regulatory change. Background: The proposed change arises out of the need to create an inspection requirement when a customer's property has been vacant for an extended period of time. This is because unsafe conditions can occur with wiring or equipment due to vandalism and/or copper wire theft when the building has been unoccupied for an extended period of time. Staff recently hosted meetings with building officials in the Imperial and Coachella valleys to discuss the safety concern and to obtain support from local and county building officials. The officials in attendance agree with the proposed change to Regulation 11. Currently Regulation 11, Unsafe Equipment, in Section B, reads as follows: The District may refuse or discontinue service to a customer if any part of his wiring or other equipment, or the use thereof, shall be determined by the District to be unsafe or in violation of applicable laws, ordinances, rules or regulations of public authorities, or if any condition existing upon the customer's premises shall be thus determined to endanger the District's service facilities, until it shall have been put in a safe condition or the violation remedied. An inspection by the building inspection entity with jurisdictional authority shall be required by the district prior to establishment or reestablishment of service where such an inspection is legally required or where the district has made a determination that the customer s equipment is unsafe or in violation of law.

14 ECAC Members -2- April 6, Notwithstanding the above, the District does not assume any responsibility of inspecting or repairing the customer's wiring or other equipment or any part thereof and assumes no liability therefor. The proposed change to Regulation 11, Unsafe Equipment, in Section B, is as follows: The District may refuse or discontinue service to a customer if any part of his wiring or other equipment, or the use thereof, shall be determined by the District to be unsafe or in violation of applicable laws, ordinances, rules or regulations of public authorities, or if any condition existing upon the customer's premises shall be thus determined to endanger the District's service facilities, until it shall have been put in a safe condition or the violation remedied. An inspection by the building inspection entity with jurisdictional authority shall be required by the district prior to establishment or reestablishment of service where such an inspection is legally required or where the district has made a determination that the customer s equipment is unsafe, in need repairs or upgrades, or in violation of law. Moreover, such an inspection shall be required where the premises to be served has remained uninhabited and/or without service for a period of 180 calendar days (6 months) or more. Notwithstanding the above, the District does not assume any responsibility of inspecting or repairing the customer's wiring or other equipment or any part thereof and assumes no liability therefor.

15 11 Regulation 11 Discontinuance or Refusal of Service Mario Pimentel Superintendent Power Troubleshooters April 6, 2015

16 Scope of Proposed Change 12 Currently Regulation 11 at section B. Unsafe Equipment reads as follows: The District may refuse or discontinue service to a customer if any part of his wiring or other equipment, or the use thereof, shall be determined by the District to be unsafe or in violation of applicable laws, ordinances, rules or regulations of public authorities, or if any condition existing upon the customer's premises shall be thus determined to endanger the District's service facilities, until it shall have been put in a safe condition or the violation remedied. Notwithstanding the above, the District does not assume any responsibility of inspecting or repairing the customer's wiring or other equipment or any part thereof and assumes no liability therefor. Period of time after which an inspection is required not specified Creates confusion Public safety issue 2

17 Proposed Language 13 The proposed change to Regulation 11 at section B. Unsafe Equipment is as follows: An inspection by the building inspection entity with jurisdictional authority shall be required by the district prior to establishment or reestablishment of service where such an inspection is legally required or where the district has made a determination that the customer s equipment is unsafe, need of repairs or upgrades, or in violation of law. Moreover, such an inspection shall be required where the premises to be served has remained uninhabited and/or without service for a period of 180 calendar days (6 months), or more. 3

18 Justification 14 Staff held meetings with local and county building officials Officials agreed with staff s proposal. Vacant dwellings create public safety issues Vandalism of wire and equipment 4

19 Recommendation 15 Staff seeks recommendation to the IID Board of Directors for approval 5

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21 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 16 TO: FROM: SUBJECT: ECAC Members Kelli Fitzgerald, senior interconnect contract specialist Generator Interconnection Agreement for 70SM1 8ME, LLC 20 MW Solar Photovoltaic Project DATE: April 6, 2015 Staff Recommendation/Motion: Staff seeks recommendation to the IID Board of Directors for approval of the Generator Interconnection Agreement (GIA) for 70SM1 8ME, LLC 20 Megawatt (MW) Solar Photovoltaic (PV) Project. Financial Analysis: The project s total estimated cost is $6,486,800, which is 100 percent customer funded. The cost of network upgrades to the IID System is estimated to be $5,806, SM1 will be eligible for reimbursement for these network upgrades via the issuance of transmission rate credits. Background: On July 26, 2011, IID and 71SM 8ME, LLC entered into a Transitional Cluster Generator Interconnection Agreement for interconnection of a 49.9MW solar photovoltaic generating facility to IID s System. The Transitional Cluster Generator Interconnection Agreement was subsequently assigned by 71SM 8ME, LLC to 70SM1, LLC. 70SM1 demonstrated to IID that it executed a Power Purchase Agreement (PPA) for 20 MW. Therefore, IID removed 20 MW from the cluster and performed serial interconnection studies to determine the impact of the proposed generation on the IID s transmission system, as well as to identify infrastructure requirements to interconnect the project to the IID s system. The 20MW solar PV project is proposed to be interconnected to IID s 92 kilovolt (kv) J Line via a new IID switching station with a single bus design. The planned commercial operation date is February Due to the aggressive project schedule, IID has agreed to allow the interconnection customer to engineer, procure and construct the network upgrades required to interconnect the solar generating facility to the IID system. The cost estimate includes $4,750,000 for the 92kV switching station; $630,000 for the development and implementation of three system operational procedures; $1,056,800 for relay, Supervisory Control and Data Acquisition (SCADA) and communication system upgrades at the Calipatria and Calipatria Prison Substations; and $50,000 for a coordination study for a total of $6,486,800. Since the interconnection customer is taking responsibility for building the switching station, IID will collect only a portion of the total cost for the work IID must perform in connection with the project.

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23 17 Generator Interconnection Agreement for 70SM1, LLC 20 MW Solar Generating Facility Kelli Fitzgerald Interconnect Contract Specialist Sr. April 6,

24 18 Background Project Proponent: 70SM1 8ME, LLC Interconnection Request processed through IID s Open Access Transmission Tariff Generator Interconnection Procedures Project was originally studied as part of IID s Transitional Cluster Due to the existence of a Power Purchase Agreement for 20MW, IID performed serial interconnection studies to determine system impacts and required infrastructure Energy will be exported from the IID System and delivered to Pacific Gas & Electric via Mirage 2

25 19 Project Information 20 MW Solar Photovoltaic Project Interconnecting to IID s 92kV J Line between Calipatria and Calipatria Prison substations Customer will engineer, procure and construct a new 92 kilovolt (kv) switching station with a single bus design Upgrades to the J Line will include new major equipment and structures, control building, relay protection panels, SCADA, Communications, etc. Customer is also responsible for communication and relay upgrades at the Calipatria and Calipatria Prison Substations 3

26 Project Site

27 Generator Interconnection Agreement In Service Date: January 2015 Commercial Operation Date: February 2015 All engineering designs will be according to IID standards and reviewed and approved by IID Engineering IID to provide on-site inspectors for quality control and commissioning Three System Operational Procedures will be developed and implemented to mitigate overloading scenarios Customer required to install capacitor bank breakers to provide reactive power support

28 22 Project Cost Estimate New IID Switching Station: $4,750,000 Three System Operational Procedures $630,000 Calipatria and Calipatria Prison Substations $1,056,800 Coordination Study $50,000 TOTAL Estimated Cost $6,486,800 Network upgrades are eligible for transmission rate credits 6

29 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 23 TO: FROM: SUBJECT: ECAC Members Kelli Fitzgerald, senior interconnect contract specialist 70SM1 8ME, LLC Transmission Service Agreement DATE: April 6, 2015 Staff Recommendation/Motion: Staff seeks a recommendation to request approval of the Transmission Service Agreement for 70SM1 8ME, LLC from the IID Board of Directors. Financial Analysis: The annual value of the contract is approximately $177,000 under the current Open Access Transmission Tariff (OATT) Economic Development Rate for transmission service. However, IID would not collect revenues until Transmission Customer s transmission rate credits for the construction of network upgrades are exhausted. Background: 70SM1 8ME, LLC has entered into a power purchase agreement with San Diego Gas & Electric to deliver 20 megawatts (MW) of solar energy. 8Minutenergy (8ME) submitted a transmission service request to IID to secure long-term firm transmission service across the IID system. The transmission service request was processed through IID s OATT. The term of the agreement is thirty (30) years and service is anticipated to commence on August 1, The total value over the term of the agreement is approximately $5.3 million. However, IID would not collect revenues until Transmission Customer s transmission rate credits for the construction of network upgrades in connection with the Generator Interconnection Agreement (GIA) are exhausted. This agreement has been reviewed and approved by legal counsel.

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43 36 Transmission Service Agreement 70SM1 8ME, LLC Contract No. TSA Kelli Fitzgerald Senior Interconnect Contract Specialist April 6,

44 70SM1 Contract Overview Long-Term, Firm Point-to-Point Transmission Service August 1, 2015 Commencement Date 30-Year Term 20MW maximum amount of energy to be transmitted Point of Receipt: High Side of the 70SM1 generator step up transformer near IID s 92kV J Line Point of Delivery: Imperial Valley 230 kilovolt (kv) Substation Receiving Party: San Diego Gas & Electric Annual contract value: $177,000 TSA is subject to IID s Open Access Transmission Tariff

45 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 38 TO: FROM: SUBJECT: ECAC Members Kelli Fitzgerald, senior interconnect contract specialist 83WI 8ME, LLC Transmission Service Agreement DATE: April 6, 2015 Staff Recommendation/Motion: Staff seeks a recommendation to request approval of the Transmission Service Agreement (TSA) for 83WI 8ME, LLC from the IID Board of Directors. Financial Analysis: The annual value of the contract is approximately $442,000 under the current Open Access Transmission Tariff (OATT) Economic Development Rate for transmission service. However, IID would not collect revenues until Transmission Customer s transmission rate credits for the construction of network upgrades are exhausted. Background: 83WI 8ME, LLC has entered into a power purchase agreement with Pacific Gas & Electric to deliver 50 megawatts (MW) of solar energy. 8Minutenergy (8ME) submitted a transmission service request to IID to secure long-term firm transmission service across the IID system. The transmission service request was processed through IID s OATT. The term of the agreement is twenty (20) years and service is anticipated to commence on December 1, The total value over the term of the agreement is approximately $8.8 million. However, IID would not collect revenues until Transmission Customer s transmission rate credits for the construction of network upgrades in connection with the TSA and Generator Interconnection Agreement (GIA) are exhausted. This agreement has been reviewed and approved by legal counsel.

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63 55 Transmission Service Agreements 83WI 8ME, LLC Contract No. TSA Kelli Fitzgerald Senior Interconnect Contract Specialist April 6,

64 83WI Contract Background Customer participated in IID s Path 42 Open Season Cluster IID provided customers with an estimate of the total costs of Path 42 upgrades, which were then allocated among customers in the Path 42 Open Season transmission cluster and in the generator interconnection cluster known as the transitional cluster Based on the megawatts of reserved capacity, customer s share of costs is $1,278,146 Customer will make two payments of $639,073 upon contract execution Customer will be eligible for transmission rate credits in the amount it paid for Path 42 upgrades

65 57 83WI Contract Overview Long-Term, Firm Point-to-Point Transmission Service December 1, 2016 Commencement Date 20-Year Term 50MW maximum amount of energy to be transmitted Point of Receipt: High Side of the 83WI generator step up transformer near IID s 230 kilovolt (kv) MB Line Point of Delivery: Mirage 230kV Substation Receiving Party: Pacific Gas & Electric Annual contract revenue: $442,000 TSA is subject to IID s Open Access Transmission Tariff 3

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67 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 58 TO: FROM: ECAC Members Raquel Pena, superintendent, Strategic Business Development SUBJECT: Feed-in Tariff Power Purchase Agreement for SEPV Imperial, LLC Dixieland West Solar Project DATE: April 6, 2015 Staff Recommendation/Motion: Staff seeks recommendation from the Energy Consumer Advisory Committee to have the Dixieland West Feed-in Tariff Power Purchase Agreement (PPA) approved by the IID Board of Directors. Financial Analysis: The estimated financial impact of this project, based on the calculated feed-in tariff rate, is approximately $630,423 annually and will be funded from the fuel and purchased energy budget. Background: Senate Bill (SB) 1332, which was adopted in 2012, requires all investor-owned and publicly-owned utilities with 75,000 or more customers to make available to its renewable generating customers a standard feed-in tariff. Staff developed program requirements and rates that incorporate the estimated cost of demand reduction, environmental attributes, avoided transmission and distribution improvement costs. The program requires a standard power purchase agreement for a period of 10, 15 or 20 years. The Board adopted a standard form purchase power agreement on June 25, Solar Electric Solutions submitted a feed-in tariff request to IID. The developer proposes a solar photovoltaic project anticipated to generate a total of 3 megawatts (MW) AC for a term of 20 years. The proposed generating facility will be sited on acres of land located west of the Dixieland Substation. The proposed commercial operation date is September 30, IID will purchase metered energy from the customer, based on a seasonal time-of-delivery period at the applicable rate, which averages at $77.83 per MW, including a 1.5 percent annual escalation factor. The feed-in tariff rates approved by the Board are attached. IID will be able to count this project toward its renewable portfolio standard goals. The agreement has been reviewed and approved by legal counsel.

68 59 Imperial Irrigation District Feed-In Tariff Under the feed-in tariff program, the District offers to purchase metered energy from an eligible renewable energy generation facility from a customer-generator based on a time-of-day delivery period at the applicable rate. Feed-in Tariff Rates per kwh: Time of Day Summer Winter On Peak $ $ Mid Peak $ $ Off Peak $ $ Under a standard feed-in tariff power purchase agreement, the rates for each subsequent calendar year are determined by applying a fixed escalation factor of 1.5 percent to the prior year s rates. The District s feed-in tariff rates are based on the following cost components: 1. Renewable Energy 2. Greenhouse Gas Reduction 3. Peak Demand Reduction 4. Avoided Transmission and Distribution Improvements The District reserves the right, subject to Board of Directors approval, to change rate development methodology as industry circumstances warrant. The time-of-day delivery periods are defined as follows: Summer: May thru September Winter: October thru April On Peak: Noon to 7:59 p.m. Monday thru Saturday except holidays Mid Peak: 6:00 a.m. to 11:59 a.m. and 8:00 p.m. to 9:59 p.m. Monday thru Saturday except holidays Off Peak: 10:00 p.m. to 5:59 a.m. Monday thru Saturday All day Sunday and holidays Holidays are New Year s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

69 60 Imperial Irrigation District Feed-in Tariff Program Dixieland West Raquel Pena Superintendent, Strategic Business Development April 6,

70 61 IID s Feed-In Tariff Background In 2009, Senate Bill (SB) 32 required large utilities to implement a feed-in tariff ( FIT ) program Subsequent adoption of Senate Bill 1332 in 2012, requires publicly-owned utilities serving 75,000 or more customers to offer a FIT program by July 1, 2013 SB 1332 set a state-wide cap of 750 MW; IID s estimated share of the 750 MW cap is approximately 14 MW IID developed a pro forma Purchase Power Agreement (PPA) and small generator interconnection process to accommodate FIT projects IID s board approved a FIT rate for inclusion in pro forma PPA IID currently has 10 FIT projects in the queue that will fulfill IID s share of the statewide cap IID is processing those projects in queue order 2

71 Basic Feed-in Tariff Rate Components Utilities offer 10, 15 and 20 year standard Power Purchase Agreement (no negotiation of terms and conditions); Seasonal Time-of-Delivery Tariff based on the following cost components: Renewable Energy Greenhouse Gas Reduction Peak Demand Reduction Avoided Transmission and Distribution Improvements IID s Board adopted a PPA rate based on a time-of-day delivery period IID s rate contains a 1.5 percent fixed annual escalation factor IID s Board reserves the right to change the rate development methodology, as industry circumstances warrant

72 IID Feed-in Tariff Rates per Kilowatt-Hour (kwh) 63 Time of Day Summer Winter On Peak $ $ Mid Peak $ $ Off Peak $ $

73 64 3 MW Project Dixieland West Project PPA Commercial Operation Date: September 30,2016 Estimated annual project output: 8,229,000 kwh Estimated count toward IID Renewable Portfolio Standards (RPS) Goal (2 nd Compliance period):.91 percent of the 25 percent Estimated Annual cost: $ 630,423 Estimated overall cost for life of the PPA (20 years net present value): $8,556,

74 Dixieland West Solar Project 65 Dixieland West is a 3 MW Solar Project, which will use single axis tracking photovoltaic (PV) panels, and will produce an estimated annual energy output of 8,229,000 kwh. Project site is located on acres, directly west of the Dixieland Substation. 6

75 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 66 TO: FROM: ECAC Members Raquel Pena, superintendent, Strategic Business Development SUBJECT: Feed-in Tariff Power Purchase Agreement for SEPV Imperial, LLC Dixieland East Solar Project DATE: April 6, 2015 Staff Recommendation/Motion: Staff seeks recommendation from the Energy Consumer Advisory Committee to have the Dixieland East Feed-in Tariff Power Purchase Agreement (PPA) approved by the IID Board of Directors. Financial Analysis: The estimated financial impact of this project, based on the calculated feed-in-tariff rate, is approximately $420,282 annually and will be funded from the fuel and purchased energy budget. Background: Senate Bill (SB) 1332, which was adopted in 2012, requires all investor-owned and publicly-owned utilities with 75,000 or more customers to make available to its renewable generating customers a standard feed-in tariff. Staff developed program requirements and rates that incorporate the estimated cost of demand reduction, environmental attributes, avoided transmission and distribution improvement costs. The program requires a standard power purchase agreement for a period of 10, 15 or 20 years. The Board adopted a standard form purchase power agreement on June 25, Solar Electric Solutions submitted a feed-in tariff request to IID. The developer proposes a solar photovoltaic project anticipated to generate a total of 2 megawatts (MW) AC for a term of 20 years. The proposed generating facility will be located on acres directly east of the Dixieland Substation. The proposed commercial operation date is September 30, IID will purchase metered energy from the customer, based on a seasonal time-of-delivery period at the applicable rate, which averages at $77.83 per MW, including a 1.5 percent annual escalation factor. The feed-in tariff rates approved by the Board are attached. IID will be able to count this project toward its renewable portfolio standard goals. The agreement has been reviewed and approved by legal counsel.

76 67 Imperial Irrigation District Feed-In Tariff Under the feed-in tariff program, the District offers to purchase metered energy from an eligible renewable energy generation facility from a customer-generator based on a time-of-day delivery period at the applicable rate. Feed-in Tariff Rates per kwh: Time of Day Summer Winter On Peak $ $ Mid Peak $ $ Off Peak $ $ Under a standard feed-in tariff power purchase agreement, the rates for each subsequent calendar year are determined by applying a fixed escalation factor of 1.5 percent to the prior year s rates. The District s feed-in-tariff rates are based on the following cost components: 1. Renewable Energy 2. Greenhouse Gas Reduction 3. Peak Demand Reduction 4. Avoided Transmission and Distribution Improvements The District reserves the right, subject to Board of Directors approval, to change rate development methodology as industry circumstances warrant. The time-of-day delivery periods are defined as follows: Summer: May thru September Winter: October thru April On Peak: Noon to 7:59 p.m. Monday thru Saturday except holidays Mid Peak: 6:00 a.m. to 11:59 a.m. and 8:00 p.m. to 9:59 p.m. Monday thru Saturday except holidays Off Peak: 10:00 p.m. to 5:59 a.m. Monday thru Saturday All day Sunday and holidays Holidays are New Year s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

77 68 Imperial Irrigation District Feed-in Tariff Program Dixieland East Raquel Pena Superintendent, Strategic Business Development April 6,

78 69 IID s Feed-In Tariff Background In 2009, Senate Bill (SB) 32 required large utilities to implement a feed-in tariff ( FIT ) program Subsequent adoption of Senate Bill 1332 in 2012, requires publicly-owned utilities serving 75,000 or more customers to offer a FIT program by July 1, 2013 SB 1332 set a state-wide cap of 750 MW; IID s estimated share of the 750 MW cap is approximately 14 MW IID developed a pro forma Purchase Power Agreement (PPA) and small generator interconnection process to accommodate FIT projects IID s Board approved a FIT rate for inclusion in pro forma PPA IID currently has 10 FIT projects in the queue that will fulfill IID s share of the statewide cap IID is processing those projects in queue order 2

79 Basic Feed-in Tariff Rate Components Utilities offer 10, 15 and 20 year standard Power Purchase Agreement (no negotiation of terms and conditions); Seasonal Time-of-Delivery Tariff based on the following cost components: Renewable Energy Greenhouse Gas Reduction Peak Demand Reduction Avoided Transmission and Distribution Improvements IID s Board adopted a PPA rate based on a time-of-day delivery period IID s rate contains a 1.5 percent fixed annual escalation factor IID s Board reserves the right to change the rate development methodology, as industry circumstances warrant

80 IID Feed-in Tariff Rates per Kilowatt-Hour (kwh) 71 Time of Day Summer Winter On Peak $ $ Mid Peak $ $ Off Peak $ $

81 72 2 MW Project Dixieland East Project PPA Commercial Operation Date: September 30, 2016 Estimated annual energy output: 5,489,000 kwh Estimated count toward IID Renewable Portfolio Standard (RPS) Goal (2 nd Compliance period):.61 percent of the 25 percent Estimated Annual cost: $420,282 Estimated overall cost for life of the PPA (20 years net present value): $5,700,

82 Dixieland East Solar Project 73 Dixieland East is a 2 MW Solar Project, which will use single axis tracking photovoltaic (PV) panels, and will produce an estimated annual energy output of 5,489,000 kwh. Project is located on acres sited directly east of the Dixieland Substation. 6

83 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 74 TO: FROM: SUBJECT: ECAC Members Raquel Pena, superintendent, Strategic Business Development Back-Feed and Station Service Agreement Ocotillo Express, LLC DATE: April 6, 2015 Staff Recommendation/Motion: Staff seeks recommendation for the IID Board of Directors to approve the Ocotillo Express, LLC Back-Feed and Station Service Agreement. Financial Analysis: The pro forma back-feed and station service agreement requires that Ocotillo Express pay IID $40.70/ megawatt-hour (MWh) for back-feed energy consumed by the facility, estimated annual revenue of $175,000. Background: IID has the exclusive right to provide retail electric service within its defined service territory. Back-feed power service is generally energy provided from a transmissionvoltage facility and is used to serve a generator s plant or parasitic needs. Ocotillo Express, LLC has developed a megawatt (MW) wind-powered generating facility interconnecting to the California Independent System Operator (CAISO) -controlled grid, but located within IID s geographic service area. Subsequently, the project is take backfeed service from CAISO. Ocotillo Express, LLC has also agreed to a limited waiver one-time fee of $1 million to allow the project s station service needs to be served by the CAISO. As such, IID has agreed to allow the project load for both back-feed and stations services to be served from the CAISO under an interim arrangement for the last two years. Under the pro forma back/station service agreement, the developer will continue with the current arrangements for its back-feed and station service needs. Staff presented a pro forma back-feed/station service agreement to the Board on August 20, 2013, for recommendation and approval. This agreement has been reviewed and approved by legal counsel.

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105 Imperial Irrigation District Energy Consumers Advisory Committee Agenda Report 95 TO: FROM: ECAC Members David Escobar, senior project manager Thomas G. King, deputy manager SUBJECT: Major Work Authorization No Utility Scale 33 MVA Battery Energy Storage System Project DATE: April 6, 2015 Staff Recommendation/Motion: Staff seeks recommendation from the Committee to the IID Board of Directors for approval of the Major Work Authorization (MWA) Financial Analysis: Funding has been allocated in the approved 2015 Capital Plan (Page E-5, Line 17) and the 2016 and 2017 Capital Plan. Project estimate is $38,674,323 and funds will be allocated in future fiscal years. Any additional funds required over the approved amount for this project will require Board approval prior to incurring expenditures. Background: This project consists of a 20 megawatt (MW)/33 megavolt ampere (mva) battery energy storage system (BESS) to provide operational support to the IID balancing area. It will be part of compliance measures to address Federal Energy Regulatory Commission reliability concerns and mitigation efforts, while providing area control error and solar integration support with black-start capability for the El Centro Generating Station. The initial Qualifications Request No.127 qualified nine prospective bidders, which were included in the Secondary Request for Proposal (SRFP) No On January 8, 2015, eight of the nine vendors submitted proposals for SRFP No.169. Five of the vendors were deemed unresponsive during the evaluation process. The five vendors did not meet minimum requirements (California Contractor s A License); the three remaining vendors were interviewed and evaluated. This item was presented to the Procurement Oversight Committee on March 17, 2015, where the Committee recommended moving forward, and presented at the March 24, 2015, Board meeting as an informational item.

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107 96 Imperial Irrigation District Energy Department Major Work Authorization For: BATTERY ENERGY STORAGE SYSTEM April 6, 2015

108 97 Project Battery Energy Storage System Major Work Authorization Request TABLE OF CONTENTS Project Scope Statement/Description: Project Funding Classification: Project Location(s): Project Asset Allocation:... 1 Justification: Considered Alternative Solutions: Project Deliverables: Contract Services Required:... 3 Financials: Cost Estimate Breakdown: Annual Cash Flow: Project Total Cost Estimate: Controller Review Confirmation:... 5 Project Risk Assessment and Mitigations Plan: Cost Benefit Analysis Summary: Risk Quantification Analysis: IID Risk Manager Review Confirmation:... 6 Project Reporting Plan: Key Stakeholders: Key Responsible IID Project Team: Quality Assurance: Project Life Cycle: High Level Gantt Schedule:... 8 Expenditure Authorization:... 9

109 98 Project Battery Energy Storage System Major Work Authorization Request 1.0 Project Scope Statement/Description: The BESS project consists of a 20MW/33mvA Battery Energy Storage System (BESS) to provide operational support to the IID balancing area. This project will be part of compliance measures to address FERC reliability concerns and mitigation efforts, while providing Area Control Error (ACE) and solar integration support with black start capability for the El Centro Generating Station. 1.1 Project Funding Classification: Capital Maintenance Joint Capital/Customer Funded Revenue Generating 1.2 Project Location(s): Proposed location is immediately west of the existing El Centro Generating Station maintenance building, at 485 East Villa Avenue, in El Centro. Subject to FERC approval. 1.3 Project Asset Allocation: Temporary Permanent None Salvage/Retirement/Demolition 2.0 Justification: System Improvement or Operational Requirements Board or General Manager Directive Customer or Business Requirements Letter Agreement, MOU/MOA Emergency Declaration Regulatory Requirements Strategic Initiative Interconnection Agreement Buy America Act Requirement 1

110 99 Project Battery Energy Storage System Major Work Authorization Request The integration of solar PV to the IID system is not without operational issues. The variability of solar and renewables results in fluctuations in the system requiring additional support from existing generation assets or additional regulating generation. FERC power quality rules have made Battery Energy Storage Systems (BESS) used as a Fast Responding Regulating System (FRRS) a viable alternative to new regulating generation and the companion issues involved with siting, permitting, and limited operating hours. The Energy Department has determined a BESS is required for optimal system efficiency and power quality. A settlement agreement between IID and FERC requires a 33mvA battery system to be installed and operational no later than December 31, 2016 as mitigation to avoid future system outages. IID agreed to invest $9,000,000 towards a system reliability enhancement measure. Completing the installation of the BESS by December 31, 2016 will conform with the Settlement Agreement dated August 7, Considered Alternative Solutions: Alternative Solutions Rank Reason not Selected Cost Purchase ancillary services 1 Does not satisfy Settlement Agreement. FERC settlement requires this project. Purchase and install additional 2 Generating units require long term generation units permitting and development. The operation would also be limited. Do nothing 3 System stabilization is critical due to the variability of renewable energy. FERC settlement requires this project. 2.2 Project Deliverables: Major Deliverable Items Engineering, Procurement, & Construction Services Battery Storage System Substation Transmission Quality Control & Assurance Services Training Services Relay Protection Environmental/HazMat 2 Greater than cost of the BESS project $150-$200 million. Greater than cost of the BESS project

111 100 Project Battery Energy Storage System Major Work Authorization Request 2.3 Contract Services Required: Service Agreement Purpose Solicitation (BID, SRFP, PRFP, Sole Source, Single Source) SA No. 1 Engineering, Procurement, & Construction SRFP agreement SA No. 2 Owners Engineer Services-Power Engineer s/ Sole source Construction Management/Inspection SA No. 3 FERC required studies-power Engineers Sole Source 3.0 Financials: The total MWA estimated project cost is $38,674,323 which includes a 10% contingency of $3,515,848. Funding has been allocated in the approved 2015 Capital Plan; Page E- 5, Line 17 and the proposed 2016 and 2017 Capital Plan. Project funds will be allocated in future fiscal years. Any additional funds required over the approved amount for this project will require IID Board of Directors approval prior to incurring expenditures. Coachella Energy Storage Partners, LLC. (CESP) submitted proposal includes in the cost a preventative maintenance and warranty plan for a period of 30 years. This requires a commitment by IID to perform routine annual preventative maintenance at an estimated cost of $6,622,225 over the 30 year period (present value cost). 3.1 Cost Estimate Breakdown: Preliminary Budget Estimate Pre-Design Cost Estimate Development/Design Cost Estimate Final Construction Cost Estimate SAP LOADING Capital Material and Equipment Outside Services Office ESTIMATED AMOUNTS (Planned) ASSOCIATED OVERHEADS TOTALS WITH OVERHEADS $48,981 $ 3,723 $52,704 $750,000 $15,000 $765,000 Outside Services Field $31,789,000 $635,780 $32,424,780 3

112 101 Project Battery Energy Storage System Major Work Authorization Request IID Labor-Outage Coordination SOC IID Labor-Relay Protection Engineering $50,000 $17,250 $67,250 $46,225 $15,948 $62,173 IID Labor-EMS $409,532 $141,289 $550,821 IID Labor Relay Tech Shop $138,322 $47,721 $186,043 IID Labor Transmission Engineering IID Labor Substation Engineering $60,915 $21,016 $81,931 $100,044 $34,515 $134,559 IID Labor SCADA $200,000 $69,000 $269,000 IID Labor Project Mgmt. $221,034 $76,257 $297,291 Transportation $25,000 $ $25,000 Training $100,000 $34,500 $134,500 Permitting Fees $ $ $ Legal Services $10,000 $ $10,000 Taxes $90,000 $7,425 $97,425 CONTINGENCY (At 10 %) $3,403,905 $111,942 $3,515,848 TOTAL $37,442,958 $1,231,365 $38,674,323 4

113 Annual Cash Flow: Project Battery Energy Storage System Major Work Authorization Request Previous years $0 $145,780 $12,500,000 $25,723,360 $305, Project Total Cost Estimate: Total Plan Cost Total Contingency Total Project MWA Amount $35,158,475 $3,515,848 $ 38,674, Controller Review Confirmation: IID Budget Controller Review Initials: Date: 4.0 Project Risk Assessment and Mitigations Plan: FERC Settlement Agreement As a result of a $12,000,000 penalty that stemmed from the September 8 th, 2011 outage, IID agreed to invest $9,000,000 towards a system reliability enhancement measure. Completing the installation of the BESS by December 31, 2016 will conform with the Settlement Agreement dated August 7, The integration of solar PV into the IID system has resulted in increased operational costs required to maintain the ACE and system reliability. During the project period, this control is maintained by fossil fueled generation assets that may be under operational limitations due to permitting requirements. There are risks associated with the implementation of the BESS project but the risk with highest concern is the schedule risk. IID needs to have the BESS installed and operational by December 31, 2016 to comply with the FERC Settlement Agreement; otherwise IID could be required to pay the $9 million in cash to FERC and also be subject to further FERC sanctions. In addition, due to intermittency in the transmission system, IID would need to implement another more expensive solution such as fast ramping generation to cover the load swings. IID staff selected an experienced contractor with the required technical staff needed to meet the construction schedule. The service agreement will also include liquidated damages to be paid to IID in case of milestone delays. IID staff and contractor will work closely to monitor possible delays and provide timely remedies. 5

114 103 Project Battery Energy Storage System Major Work Authorization Request The BESS is new technology to be implemented in IID. The service agreement with the contractor will include a training program which will assist IID staff to be trained on how to operate the new system. 4.1 Cost Benefit Analysis Summary: Cost Benefit Analysis is not applicable for this project. BESS is required as part of the Settlement Agreement between IID and FERC dated August 7, Project is part of compliance measures to address FERC reliability concerns and mitigation efforts. Financial Metric Net Present Value Payback Period Result n/a 6 years 4.2 Risk Quantification Analysis: Risk quantification analysis is not required for this project. The BESS project is required as part of the Settlement Agreement between IID and FERC. 4.3 IID Risk Manager Review Confirmation: IID Risk Manager Review Initials: Date: 5.0 Project Reporting Plan: Reporting Plan Recipient Description Method By Whom Frequency IID Board Project progress, status, variance PMO Written Report PMO Quarterly/ Monthly Executive Management Project progress, status, variance PMO Written Report PMO Quarterly/ Monthly Project Owner Project progress PM Status Project Bi-weekly and Sponsor status, action, Written Report Manager Project Stakeholders Project progress status and action PM Status Report Project Manager Weekly or Bi-weekly Appropriate Authorizing Level Project Scope Change Request or amendments Written Request Project Manager As required 6

115 104 Project Battery Energy Storage System Major Work Authorization Request Company wide communication Project News Newsletter, , Web Public Info. Office TBD / As required 5.1 Key Stakeholders: Stakeholder Area or Group IID Systems Operations Energy Management System Energy Transmission Planning Energy System Operations Engineering Energy Materials Management IID Safety and Compliance IID Environmental IID Telecommunications IID Purchasing and Contract Administration IID Energy Production Energy Protection Construction Energy Substation Engineering Energy Construction and Maintenance 5.2 Key Responsible IID Project Team: Project Core Team Department Manager Project Owner Project Manager Project Engineer of Record Carl D. Stills Michael J. Taylor David Escobar Noe Gutierrez, P.E. Name 5.3 Quality Assurance: The EPC vendor will provide a project plan and schedule based on discussion with and to meet the needs of the IID. The Owner s Engineer will review in conjunction with IID personnel, appropriate drawings, specifications, and documents related to the complete BESS project. The construction phase(s) will be monitored by selected IID and contract inspectors with the assistance of the owner s engineer. The EPC vendor will also provide a plan for testing and commissioning approved by the IID project team. 7

116 Project Life Cycle: Project Battery Energy Storage System Major Work Authorization Request Project Start Date: Project Closure Date: High Level Gantt Schedule: 8

117 106 Project Battery Energy Storage System Major Work Authorization Request 6.0 Expenditure Authorization: Carl D. Stills, Department Manager Date Belen Valenzuela, Chief Financial Officer Date Eduwvijes A. Lutz, Portfolio Management Officer Date Kevin E. Kelley, General Manager or Kristine K. Fontaine Asst. General Mgr. Date Stephen W. Benson, President, Board of Directors Date 9

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135 124 Major Work Authorization No Utility Scale (33 MVA) Battery Energy Storage System Project Thomas G. King/David Escobar Deputy Energy Manager/Project Manager, Sr. April 6,

136 125 Executive Summary The BESS project consists of a 20MW/33mvA Battery Energy Storage System (BESS) that provides: Operational support to the IID balancing area. Compliance measures to address Federal Energy Regulatory Commission (FERC) reliability concerns and mitigation efforts. Provides Area Control Error (ACE). Solar integration support. Black-start capability for the El Centro Generating Station. 2

137 Evaluation Protocol

138 127 Recommendation to Award Evaluation team ranked three proposals using the criteria outlined in the advertised Secondary Request for Proposal (SRFP) solicitation. Evaluation team recommends awarding contract to Coachella Energy Storage Partners (CESP), LLC, as the higher-scored/lowest cost proposer. Coachella Energy Storage Partners, LLC offers experienced management, technical personnel, detailed construction schedule and qualified subcontractors for this project. RES Americas, Inc. ZGLOBAL IMS OSI 4

139 Project Cost Estimate Summary 128 BESS Cost Estimate Summary Project Estimate $ 35,158, Project Contingency -10 percent $ 3,515, MWA Total $ 38,674,

140 129 In collaboration with: & Prepared by ZGlobal, Inc. 750 W Main St. El Centro, CA

141 Coachella Energy Storage Partners 130 CESP is a locally owned and managed company comprised of individuals with a vested interest in the long term viability of IID and the Imperial Valley Community 7