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W A T E R E N E R G Y L I F E RIVERSIDE PUBLIC UTILITIES PUBLIC U T I L I T I E 5 Board Memorandum BOARD OF PUBLIC UTILITIES DATE: November 16, 2012 ITEM NO: 7 SUBJECT: TEQUESQUITE SOLAR PHOTOVOLTAIC PROJECT UPDATE ISSUE: That the Board of Public Utilities receive an update of the Tequesquite Solar Photovoltaic (PV) Project— Request for Proposals (RFP). RECOMMENDATION: That the Board of Public Utilities receive an update on the Tequesquite Solar Photovoltaic Project - Request for Proposals. BACKGROUND: On July 15, 2411, the Board of Public Utilities recommended to the City Council that Riverside Public Utilities (RPU) issue an RFP to construct the Tequesquite Solar PV Project, a recommendation that was approved by the City Council on September 13, 2011. On March 9, 2012, RPU received seven responses to the RFP, all of which were evaluated at length by staff. However, several factors have prompted staff to reconsider the scope and strategy before moving forward. Such factors include but are not limited to the following: 1. The price for solar PV panels and balance-of-system components have continued to drop over the past few months after the issuance of the RFP, leading to staff's belief that RPU may not be getting the best current pricing in the submitted proposals. 2. The RFP structure was not flexible enough and allowed little leeway for proposals that could be creative in structure and content resulting in lower pricing. The RFP required fixed-price power purchase agreement (PPA) proposals in the first instance and only allowed alternative pricing structures, e.g., prepayment or buyout options if a fixed-price PPA proposal was submitted. 3. The project size was left to the developer to decide (between 5 to 10 MW), which resulted in significant variances in the offered pricings, making the direct comparison of the proposals uncertain as the cost of distribution upgrades for larger sized project is highly uncertain. 4. The RFP did not directly take into account existing and potential state policies/mandates for Distributed Generation (DG) and Community Solar Projects (CSPs) which may require additional consideration for in-city solar PV development. Staff determined that the factors noted above warranted closing the RFP process and rejecting all proposals submitted. Staff will begin development of a new enhanced RFP that will take into account the revised scope and strategy.