|
NACIMIENTO PROJECT COMMISSION MEMBERS: CITY OF PASO ROBLES, TEMPLETON CSD, ATASCADERO MWC, CITY OF SAN LUIS OBISPO, SLO COUNTY FLOOD CONTROL & WATER CONSERVATION DISTRICT
APRIL 6, 2022 – 4:00 PM (WEDNESDAY) NACIMIENTO PROJECT COMMISSION SAN LUIS OBISPO COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT -------------------------------------------------------------------------
IN-PERSON LOCATION: (COMMISSIONERS ARE REQUIRED TO BE IN-PERSON) Templeton CSD, Board Meeting Room 206 5th Street, Templeton, CA 93465 (805) 434-4900
VIRTUAL OPTION: (FOR AGENCY STAFF OR MEMBERS OF THE PUBLIC) Join Zoom Meeting: https://us02web.zoom.us/j/83464470439?pwd=d2JHeXA0TnkrUWprY1RxL1pjV1FZQT09 Meeting ID: 834 6447 0439 Passcode: 421081
AGENDA ITEMS & PUBLIC COMMENTS: For more information: https://www.slocounty.ca.gov/Departments/Public-Works/Forms-Documents/Committees-Programs/Nacimiento-Project-Commission.aspx Public comments can be submitted to: [email protected]
Chair: John Peschong; Vice-Chair: John Hamon
AGENDA
Next Scheduled Commission Meeting: Apr. 28, 2022 (SPECIAL)
ATTACHMENTS
CONTACT: All Americans with Disabilities Act (ADA) accommodations shall be promptly reviewed and resolved. Persons who require accommodations for any audio, visual or other disability in order to review an agenda, or to participate in the meeting per the ADA, are encouraged to request such accommodation 48 hours in advance of the meeting from Wes Thomson at (805) 781-5252.
NACIMIENTO WATER PROJECT
NACIMIENTO PROJECT COMMISSION MEETING MINUTES (Draft) February 24, 2022
COMMISSIONERS PRESENT (Voting Share %) Atascadero MWC (17%): Grigger Jones (Chair) City of SLO (28%): Carlyn Christianson (Vice Chair) District (20%): John Peschong Paso Robles (33%): John Hamon Templeton CSD (2%): Wayne Petersen
CLERK (District): Wes Thomson QUORUM: YES (5/5 Seats & Voting Share > 51%)
Roll Call The quarterly meeting of the Nacimiento Project Commission was held via teleconference on Thursday, Feb 24th, 2022, at 4:00 P.M., with G. Jones in the Chair, and W. Thomson sitting in as the Clerk. Present: Hamon, Petersen, Jones, Christianson, and Peschong. Quorum established.
Consider Adopting Resolution Regarding Virtual Meetings (AB 361) G. Jones identified Resolution 2022-001 authorizing the Commission to meet by teleconference for a period of thirty days. Motion for approval: J. Hamon; Seconded by W. Petersen. All approved.
Minutes from November 2021 meeting were presented and approved without changes. Motion for approval: J. Hamon; Seconded by W. Petersen. All approved.
Utilities Division Report – Current NWP Operations with Reservoir Status & 2022 Outlook David Spiegel gave the current Utilities Division report. NWP is operational with no current non- routine projects. Conditions at the reservoir are 109,000 AF and approx. 29% capacity. Monterey County is currently developing their 2022 reservoir release schedule.
Second Quarter Operations Budget Report – FY 2021-22 Katie Franco presented the second quarter update. District expenditures are at 19.2% of the budget including the routine and non-routine capital outlay. However, the District has not paid Monterey for the current invoice. Additional detail is outlined in the report attached in the agenda.
Annual Conflict of Interest (COI) Filing – “Form 700” Acknowledgement of reminder concerning Commissioners’ responsibility to file COI “Form 700.”
SAN LUIS OBISPO COUNTY FLOOD CONTROL & WATER CONSERVATION DISTRICT NACIMIENTO WATER PROJECT
FY 2022-23 Operating Fund Proposed Budget Katie Franco noted that the budget book has been emailed for review. The upcoming TSG meeting in March will provide the Naci Finance committee and TSG opportunity to review this budget before the District brings it back to the Commission for its endorsement in late April.
Nomination & Election of Commission Officers Motion for John Peschong to serve as chair. Motion for approval: C. Christianson; Seconded by W. Peterson. All Approved. Motion for John Hamon to serve as vice chair. Motion for approval: J. Peschong; Seconded by W. Peterson. All Approved.
Next Commission: Apr. 28, 2022 The meeting was adjourned by Jones at approximately 4:25 P.M.
NACIMIENTO WATER PROJECT
TO: Nacimiento Project Commission FROM: Annie Secrest, Energy & Water Coordinator, Public Works Department VIA: Nola Engelskirger, Utilities Division Manager, Public Works Department DATE: April 6, 2022 SUBJECT: Item VI.A – Consider Approval of the Tesla Battery Energy Storage Systems
Summary On November 18, 2021, your Commission discussed the Tesla Battery Energy Storage Systems (“Systems”) and voted not to proceed with the project unless and until new information became available. Concerns about the project were discussed, including the possibility for one year of Nacimiento Water Project (“NWP”) outage eliminating the potential savings, the extent of the benefits to NWP operational reliability, and the financial risk to the Participants due to the cycling requirement.
Since your November meeting, the District has worked with Tesla to prepare amendments to the two Energy Products Operation and Maintenance Agreements (“Amendments”) that seek to address concerns raised by the Commission. The Amendments incorporate language regarding battery cycling requirements and the associated financial risk to the District in the event of a utility outage or downtime. The Amendments also specify that Tesla maintain the necessary insurance coverage and name the District as an additional insured.
Additionally, the District has worked to separately address the Participants’ concerns regarding potential liability related to: (1) any losses of the Program incentive in the case of utility outages or otherwise unexpected downtime; and (2) any losses of the Systems as a result of a natural disaster.
On March 30, 2022, a letter was sent to Kirk Gonzalez, a member of the Technical Support Group on behalf of the City of Paso Robles, to summarize this new information in preparation for this Special Commission Meeting. The letter is included as Attachment 1, and the Amendments are included as Attachment 2. Furthermore, the District has prepared a proposed Indemnification Agreement, included as Attachment 3, which will protect the Participants against any liability, cost, or loss associated with the Systems.
Recommendation Staff recommends that the Commission:
SAN LUIS OBISPO COUNTY FLOOD CONTROL & WATER CONSERVATION DISTRICT NACIMIENTO WATER PROJECT
Results Upon approval to proceed with the project, Tesla can install their Systems at the Nacimiento Intake and Rocky Canyon Pump Stations at no initial cost to the District. These two sites are eligible for the Equity Resiliency subsidy through the California Public Utilities Commission’s Self Generation Incentive Program (“Program”), which covers 100% of the cost of an energy storage system for qualifying sites.
The Systems are valued at $2.2 million per site. In addition, the Program will cover costs associated with system engineering, permitting, installation, and operations and maintenance for the first ten years, a value Tesla has estimated at $790,000 for each site.
After ten years, the District will be responsible for: (1) operations and maintenance costs estimated at $10,300 annually; and (2) decommissioning and recycling costs at the end of the expected useful life, which are estimated at approximately $35,000 per site. So, the total projected system costs for the Participants are estimated to be approximately $300,000 over the 20-year projected working life of the Systems.
The primary benefit of an energy storage system is the ability to manage and reduce electricity use and cost. The proposed Systems can deploy stored energy during peak demand periods when Pacific Gas & Electric’s (“PG&E”) grid electricity rates are highest and then recharge during off-peak periods when rates are lowest. This ability is especially beneficial for sites like the NWP pump stations, which are some of the most energy-demanding grid users within the region during peak demand times. Total combined electricity cost savings for the NWP pump stations are projected to be approximately $150,000 annually, which equates to over $3 million in potential electricity savings over the 20-year working life of the Systems.
A secondary benefit includes serving as a backup temporary power supply, with durations estimated to range from four to 17 hours depending on the pumping plant load.
Reason for Timing of Requested Action The Program funding is allocated on a first-come, first-serve basis and is now fully subscribed.
The NWP pump stations are two of the three water-infrastructure sites in the County that meet the requirements for the highest Program subsidy. The third location, Lopez Water Treatment Plant, has completed the installation of a Tesla battery system and is awaiting permission to operate from PG&E. If the District does not proceed with this project at this time, the NWP will lose the opportunity to install these Systems under the Program at the 100% subsidy level.
Future Program subsidies are expected to be reduced, and similar energy storage systems would thus likely result in upfront out-of-pocket costs for the Participants.
Attachments: SAN LUIS OBISPO COUNTY FLOOD CONTROL & WATER CONSERVATION DISTRICT NACIMIENTO WATER PROJECT
Department of Public Works John Diodati, Director
VIA ELECTRONIC MAIL March 30, 2022 ATTN: Kirk Gonzalez Member of the Technical Support Group on Behalf of the City of Paso Robles City of Paso Robles 1000 Spring Street Paso Robles, CA 93446
SUBJECT: Response to Concerns Raised by the City of Paso Robles Regarding Installation of Powerpack Systems at the Lake Nacimiento and Rocky Canyon Pump Stations
Dear Mr. Gonzalez,
This letter relates to the opportunity for the Flood Control and Water Conservation District (“District”) to obtain Powerpack Systems (“Systems”) at no initial cost from Tesla, Inc. through the California Public Utilities Commission’s Self-Generation Incentive Program (“Program”). The Systems would be located at the Lake Nacimiento Intake and Rocky Canyon Pump Stations.
These sophisticated Systems are designed to charge when electricity rates are the most economical, and discharge at times when the electricity rates are the least economical, resulting in direct and measurable energy savings to each participant. By obtaining these Systems through this first-come first-serve Program, the participants can realize savings without having to make any initial investments. The current energy savings estimate for the full Systems lifecycle is over $3M.
My staff presented this opportunity to the Nacimiento Project Commission (“Commission”) on August 27, 2020, and November 18, 2021. Although the Commission originally appeared supportive, the Commission ultimately determined that potential financial risks may outweigh the benefits. That said, I appreciate the Commission simultaneously committing to reconsider this opportunity if, at any point in time, new information became available.
Since then, Tesla informed the District of their willingness to consider an amendment to each of the Energy Product Operation and Maintenance Agreements (“Agreements”) to address concerns about potential liability related to any losses of the Program incentive in the case of utility outages or otherwise unexpected downtime. Tesla has also agreed to consider an amendment to ensure that it maintains the necessary insurance coverage and that the District is named as an additional insured.
County of San Luis Obispo Department of Public Works County Govt Center, Room 206 | San Luis Obispo, CA 93408 | (P) 805-781-5252 | (F) 805-781-1229 [email protected] | slocounty.ca.gov
Furthermore, I understand that the City of Paso Robles remains concerned about potential liability related to any losses of the Systems as result of a natural disaster, and has requested confirmation that the District’s insurance policy would cover a loss of the Program incentive in this scenario. The District’s insurance policy will cover the total replacement value of each System and the premiums will be distributed to participants proportionately at a rate of approximately $3,000.00 annually. Furthermore, I will recommend the District, with support from County Counsel, indemnify each participant, which will protect them from any liability, cost, or loss associated with the Systems.
I am pleased to report that the District is currently in the process of preparing Amendments to the Agreements, as well as an Indemnification Agreement. My staff will present this information to the Commission on April 6, 2022, and my hope is that it will sufficiently address any outstanding concerns so that the Commission feels confident making the decision to take advantage of this opportunity.
I am happy to meet with you, Mr. Gonzalez, to further discuss this topic and how we can work together to reduce participant concerns as they relate to proceeding with the installation of these Systems.
Sincerely,
John Diodati Director
cc: Jeff Briltz, Member of the Technical Support Group on behalf of the Templeton Community Services District John Neil, Member of the Technical Support Group on behalf of the Atascadero Mutual Water Company Mychal Boerman, Member of the Technical Support Group on behalf of the City of San Luis Obispo Nola Engelskirger, Utilities Division Manager, County of San Luis Obispo Wade Horton, Administrative Officer, County of San Luis Obispo
County of San Luis Obispo Department of Public Works County Govt Center, Room 206 | San Luis Obispo, CA 93408 | (P) 805-781-5252 | (F) 805-781-1229 [email protected] | slocounty.ca.gov
FIRST AMENDMENT TO THE ENERGY PRODUCTS OPERATION AND MAINTENANCE AGREEMENT-CALIFORNIA SELF-GENERATION INCENTIVE PROGRAM (SGIP) (Rocky Canyon Pump Station)
THIS FIRST AMENDMENT TO THE ENERGY PRODUCTS OPERATION AND MAINTENANCE AGREEMENT-CALIFORNIA SELF-GENERATION INCENTIVE PROGRAM (SGIP) (herein referred to as the "First Amendment") is made and entered into, on --- 2022, by the County of San Luis Obispo (the "County"), a political subdivision of the State of California, and Tesla, Inc.
Recitals
WHEREAS, the "Energy Products Operation and Maintenance Agreement-California Self Generation Incentive Program (SGIP)" (herein referred to as ''the Agreement") for the Rocky Canyon Pump Station was executed, by and between the County of San Luis Obispo and Tesla Inc., effective as of September 1, 2020; and
WHEREAS, the parties are executing this First Amendment to clarify the County's responsibility for the inability to cycle the batteries installed pursuant to the Agreement due to utility outages or downtime; and
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
(d) Notwithstanding anything to the contrary in the Agreement, it is agreed that County will not be responsible for Tesla Inc.'s inability to cycle the batteries installed under the Projects, to the extent caused by a utility outage or downtime; including that County will not be responsible for a loss of the SGIP incentive to the extent caused by such utility outage or downtime.
$1,000,000 per occurrence or per claim and $2,000,000 in aggregate. Each party shall be included as an additional insured for insurable liabilities assumed in connection to this agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this First Amendment to be executed by their duly authorized representatives on the date and year first written above.
TESLA,INC.
By: Stepi?r: Poll-:§{;, 30;2214:S9 HST) Stephen Pollock Its: Sr. Manager, Channel Sales
Date: Mar 30, 2022
SAN LUIS OBISPO COUNTY
By:------------- Date: _
APPROVED AS TO FORM AND LEGAL EFFECT:RITAL. NEAL County Counsel
Deputy County Counsel Date:
FIRST AMENDMENT TO THE ENERGY PRODUCTS OPERATION AND MAINTENANCE AGREEMENT-CALIFORNIA SELF-GENERATION INCENTNE PROGRAM (SGIP) (Lake Nacimiento Pump Station)
THIS FIRST AMENDMENT TO THE ENERGY PRODUCTS OPERATION AND MAINTENANCE AGREEMENT-CALIFORNIA SELF-GENERATION INCENTNE PROGRAM (SGIP) (herein referred to as the "First Amendment") is made and entered into, on --- 2022, by the County of San Luis Obispo (the "County"), a political subdivision of the State of California, and Tesla, Inc.
Recitals
WHEREAS, the "Energy Products Operation and Maintenance Agreement-California Self Generation Incentive Program (SGIP)" (herein referred to as "the Agreement") for the Lake Nacimiento Pump Station was executed, by and between the County of San Luis Obispo and Tesla Inc., effective as of September 1, 2020; and
WHEREAS, the parties are executing this First Amendment to clarify the County's responsibility for the inability to cycle the batteries installed pursuant to the Agreement due to utility outages or downtime; and
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
(d) Notwithstanding anything to the contrary in the Agreement, it is agreed that County will not be responsible for Tesla Inc.'s inability to cycle the batteries installed under the Projects, to the extent caused by a utility outage or downtime; including that County will not be responsible for a loss of the SGIP incentive to the extent caused by such utility outage or downtime.
$1,000,000 per occurrence or per claim and $2,000,000 in aggregate. Each party shall be included as an additional insured for insurable liabilities assumed in connection to this agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this First Amendment to be executed by their duly authorized representatives on the date and year first written above.
TESLA,INC.
By: Stepii;;;; p-:irl{u30, 2214:59 HST) Stephen Pollock Its: Sr. Manager, Channel Sales
SAN LUIS OBISPO COUNTY
By: _
Date: Mar 30, 2022
Date:---------
APPROVED AS TO FORM AND LEGAL EFFECT:RITAL. NEAL County Counsel
By:-------------- Deputy County Counsel Date: _
INDEMNIFICATION AGREEMENTTesla Power Pack Systems ProjectLake Nacimiento Pump Station and Rocky Canyon Pump Station
This Indemnification Agreement (“Agreement”) is made as of , 2022, by and between the County of San Luis Obispo, a political subdivision of the State of California (“County”), and the City of Paso Robles, the Templeton Community Services District, the Atascadero Mutual Water Company, SMR Mutual Water Company, the City of San Luis Obispo, County Service Area No. 10A (Cayucos), and Bella Vista MHP, LLC, collectively referred to as “Parties.” RECITALS
and participants in the Nacimiento Project Water Delivery through subsequent, separate agreements.
Indemnitees”).
AGREEMENT
The Parties agree as follows:
1.Defense and Indemnification.
Commission Indemnitees, their agents, officers, directors, and employees from and against any and all attorneys’ fees, liability, loss, costs, damages, claims, demands, and expenses of any kind which directly or indirectly arise out of or are in any way associated the installation of the Power Packs Systems in accordance with the Contracts. b.Notice of Claim(s) And Request For Indemnification. The
Commission Indemnitees shall promptly notify County in writing of any Claim(s) for which the Commission Indemnitees seek indemnification under this Agreement. The notification shall include such details regarding the nature of the Claim(s) as are known by the Commission Indemnitees at the time and shall be deemed timely unless County’s ability to defend against the Claim(s) is substantially adversely affected by any delay caused by the Commission Indemnitees.
with County in any investigation of any Claim(s) for which the Commission Indemnitees seek indemnification.
this Agreement shall be binding upon and inure to the benefit of the Parties and each of them and their heirs, successors, and assigns.
personal delivery, by certified mail, return receipt requested, or by e-mail, addressed as follows:
To Paso Robles: City of Paso Robles Christopher Alakel, Interim Public Works Director [email protected]
To TCSD: Templeton Community Services District Jeff Briltz, General Manager [email protected]
To AMWC: Atascadero Mutual Water Company John Neil, General Manager [email protected]
To SMRMWC: SMR Mutual Water Company Rob Rossi, President [email protected]
To San Luis Obispo: City of San Luis Obispo Aaron Floyd, Utilities Dept. Director [email protected]
To Bella Vista MHP: Bella Vista MHP, LLC Katie Morris [email protected]
To CSA NO. 10A: County Service Area No. 10A (Cayucos) John Diodati / SLO County Public Works Director [email protected]
To the County: John Diodati Director of the Department of Public Works 976 Osos Street, Room 206 San Luis Obispo, CA 93408
With a copy to: Rita L. Neal County Counsel County Government Center, Room 386 San Luis Obispo, CA 93408
Any notice given pursuant to this Agreement will be deemed given upon receipt thereof or upon the recipient’s refusal to accept delivery. Any party may change the address for delivery of notices by sending notice thereof to all other parties in the manner set forth herein.
of California and shall be construed and interpreted in accordance with California law.
this Agreement, including any action to enforce the terms of this Agreement, shall be filed and heard in a court of competent jurisdiction in California and in the County of San Luis Obispo.
any presumption or rule regarding construction against the party drafting the Agreement. Nothing in this Agreement, nor any performance under this Agreement, nor any payment under this Agreement will constitute or be construed as any admission or evidence of any liability or violation of any law, rule, regulation, or policy by any party.
shall be binding on any party unless it is in writing and signed by the Parties.
shall not operate as a waiver of any other breach of such term or condition or of any other term or condition of this Agreement.
power and authority to enter into and perform its obligations under this Agreement.
bear their own attorneys’ fees and costs.
In Witness whereof, the Parties have signed this Agreement as of the date set forth in the first paragraph above.
County of San Luis Obispo
By: Chairperson, Board of Supervisors
Date: , 2022
APPROVED AS TO LEGAL FORM AND EFFECT
RITA L. NEAL County Counsel
By: Deputy County Counsel
Date: , 2022
City of Paso Robles
By:
Date: , 2022
APPROVED AS TO LEGAL FORM AND EFFECT
By:
City of San Luis Obispo
By:
Date: , 2022
APPROVED AS TO LEGAL FORM AND EFFECT
By:
Templeton Community Services District
By:
Date: , 2022
Atascadero Mutual Water Company
By:
Date: , 2022
County Services Area No. 10A
By:
Date: , 2022
SMR Mutual Water Company
By:
Date: , 2022
Bella Vista MHP, LLC
By:
Date: , 2022 |
||||||||||||||||||
County of San Luis Obispo
Public Works, Nacimiento Project Commission
2022-04-06-NPC-Agenda-Packet
Notice of Special Meeting
By: