10-17-2014 BPU RPT 06 - Laserfiche WebLink

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W A T E R E N E R G Y L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: OCTOBER 17, 2014 ITEM NO: 6 SUBJECT: CALIFORNIA SOLAR INITIATIVE APPLICATION FEES FOR REBATE ISSUE: The item for the Board of Public Utilities consideration is approval of application fees for California Solar Initiative (CSI) program to secure solar photovoltaic system rebate for 3.37 MW of total capacity to provide electricity to potable water wells located within the City of San Bernardino. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council approve the expenditure of funds in the amount of $70,000 for California Solar Initiative incentive application fees. BACKGROUND: On June 1, 2012, the Board approved an agreement with Kennedy Jenks Consultants to complete a Water Energy Management Master Plan (WEMMP), The plan was complete in April 2014, which included a recommendation to install solar power at some of RPU's well sites in Southern California Edison's (SCE) service territory. At this time, solar power is competitive with SCE's current rate structure and will only become more cost effective as SCE's rates increase over the next 20+ years. Staff requested proposals from several solar developers and is currently reviewing five proposals. Upon selecting a preferred solar power developer, staff will determine the best delivery method and complete negotiations with that developer. Staff is expected to make a recommendation to the Board and the City Council between December 2014 and February 2015. In order to reduce the costs for installing solar power, RPU could take advantage of the California Solar Initiative (CSI), administered by the California Public Utility Commission (CPUC). Several solar power developers and others familiar with the industry estimated that the CSI would be available until the middle of next year. However, market conditions changed and staff recently learned that the funding for CSI was nearly exhausted. In order to take advantage of CSI funding, staff reviewed the proposals, identified 3.37 MW of capacity that is eligible for rebates and submitted five applications to reserve funding for five projects. In particular, staff applied for the Performance Based Incentive (PBI) rebate, which provides 8.8 cent per kWh produced for the first five years of the projects. Two of the applications were able to secure reservation and the other three were put onto a waiting list. Staff believes that the projects on the waiting list have a good chance of being funded due to the number of applications that will likely be rejected. If the applications are accepted, RPU will be required to pay $70,000 in application fees, which are intended to keep speculators out of the rebate process. If all of the applications are approved and all of RPU proposed projects move forward, the application fees will be refunded within a few months of completing the projects. Moreover, RPU would secure rebates worth approximately $3,400,000. Based on the current market conditions for solar photovoltaic (PV) system development and upon reviewing the five received proposals, staff believes that, even without the CSI rebates, the installations