04-05-2013 BPU RPT 06 - Laserfiche WebLink

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W A T E R F - iel RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: April 5, 2013 ITEM NO: 6 SU_BJF CT: NEW GENERATING FACILITY INTERCONNECTION AGREEMENT BETWEEN AT&T SERVICES, INC. AND THE CITY OF RIVERSIDE — PARTIAL CONTRIBUTION OF STANDBY CHARGES FOR RESEARCH AND DEVELOPMENT ISSUE: The item for Board of Public Utilities consideration is approval of two five-year Electric Service Generating Facility Interconnection Agreements with AT&T Services, Inc. (AT&T) which includes a partial contribution of the stand-by charges. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve a five-year Electric Generation Interconnection Service Agreement with AT&T Services Inc., from the scheduled operation date of May 1, 2013 through April 30, 2018 for service rendered at 9129 Magnolia Avenue; and 2. Approve a five-year Electric Generation Interconnection Service Agreement with AT&T Services Inc., from the scheduled operation date of May 1, 2013 through April 30, 2018 for service rendered at 3580 Orange Street. BACKGR!UND: AT&T proposes to install natural gas fuel cells at two of its Riverside data centers. The proposed fuel cells have been designed and sized by Bloom Energy, of Sunnyvale, California, to meet the majority of the annual energy requirements at the two sites. Like a conventional battery, a fuel cell uses two reacting chemicals separated by an electrolyte to produce an electric current. Unlike a conventional battery, a fuel cell is not charged prior to use—the chemical reactants are fed continuously to the cell to provide constant power output. The reaction takes place without combustion, requires no moving parts, and produces negligible pollution. Although accepted by the State's Investor owned Utilities as a renewable resource, Riverside Public Utilities' (RPU) approved Renewable Portfolio Standard and California law governing publicly owned utilities does not include natural gas fuel cells as a renewable generation facility. As such,fuel cells do not qualify under the Electric Rules and Rates for waiver of the stand-by charge (Electric Rate Schedule S). Bloom proposes installation of a 300kW fuel cell at the Magnolia Avenue facility, and a 600WV fuel cell at the Orange Street facility. RPU proposes to partner with AT&T and Bloom in these proposed installations to further field test this technology. RPU's proposed participation will be limited to a partial contribution (30%) of the stand-by charges that would otherwise be applicable to such a generating facility interconnection. The proposed charges to be contributed total $6,600 per year for the smaller installation and$13,200 per year for the larger installation. Staff has included provisions to collect the full monthly stand-by charges in the event the fuel cells fail to perform as specified by Bloom and to collect all of the contributed stand-by charges if the units become in-operable during the five year service tern.