08-02-2013 BPU RPT 12 - Laserfiche WebLink

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W A T E R E N E R G Y L f I E RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: August 2, 2013 ITEM NO: 12 SUBJECT: UNIVERSITY OF CALIFORNIA, RIVERSIDE THERMAL ENERGY STORAGE INCENTIVE PAYMENT ISSUE: The item for Board of Public Utilities consideration is approval of a $1,000,000 incentive payment for the installation of a 2,000,000 gallon Thermal Energy Storage (TES) system at the University of California, Riverside. RECOMMENDATION: That the Board of Public Utilities recommend that the City Council approve the incentive payment of $1,000,000 to the University of California, Riverside for the installation of an additional 2,000,000 gallon Thermal Energy Storage facility, or a mutually agreed upon equivalent at the University of California, Riverside. BACKGROUND: The University of California. Riverside (UCR) is Riverside Public Utilities' (RPU) largest customer. UCR is unique among RPU's electric customers as they take their energy delivery for the majority of the main campus at a substation that is almost exclusively utilized by UCR. UCR then delivers this electricity through a distribution system on the main campus that it owns and operates. Therefore, RPU does not charge UCR for the cost of delivering electricity through the Utility owned distribution system as done for other customers. As a result of this arrangement, UCR and RPU have held contractual energy agreements for over 15 years. In 2012, the City executed the Third Energy Agreement between UCR and the City of Riverside. Provision 12.a. of this contract provides — "In consideration for the University's agreement to engage in mandatory load curtailments and to enable the University to reduce load, City shall pay University one million dollars ($1,000,000) upon the University providing the City a fully executed contract for the installation of an additional 2,000,000 gallon Thermal Energy Storage ("TES") facility or a mutually agreed upon equivalent". TES involves a system of tanks that produce and hold ice during non-peak hours. During the peak hours of the day fans transfer air that is cooled by the ice through the HVAC system, alleviating the need for high-energy-use traditional refrigerated HVAC systems. OCR's current TES system consists of two active tanks of 2.3 and 2.7 million gallons. Planning and design of the third 2 million gallon tank is currently in-process. UCR has provided a fully executed agreement with Mallcraft, Inc., for the project entitled "East Campus Infrastructure Improvement Phase II", which includes the construction of the additional 2,000,000 gallon TES facility. As stipulated in the City's 2012 Energy Agreement with UCR, staff recommends a payment of $1,000,000 to aid in the construction and commissioning of this new TES system that will enable UCR to shift significant, additional energy load to off-peak energy use hours.