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RIVERSIDE PUBLIC UTILITIES Board Memorandum P U 9 U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: December 3, 2010 ITEM NO: 8 SUBJECT: LA P.AZ SOLAR TOWER PROJECT POWER SALES AGREEMENT BETWEEN SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY ("SCPPA") AND THE CITY OF RIVERSIDE ("RIVERSIDE") AND ORDINANCE OF THE COUNCIL OF THE CITY OF RIVERSIDE APPROVING THE POWER SALES AGREEMENT ISSUES: That the Board of Public Utilities consider: 1) approval of the Power Sales Agreement between Southern California Public Power Authority ("SCPPA") and the City of Riverside ("Riverside") for the purchase of renewable energy through the La Paz Solar Tower Project; and 2) adoption of an Ordinance approving the Power Sales Agreer•ient by Riverside with SCPPA. RECOMMENDATIONS- That the Board of Public Utilities recommends that the City Council: 1. Approve the ;proposed Power Sales Agreement between SCPPA and Riverside for the purchase of renewable energy through the La Paz Solar Tower Project; 2. Adopt an Ordinance approving the Power Sales Agreement by the City of Riverside with the Southern California Public Power Authority for the La Paz Solar Tower Project with subsequent signature by the Mayor of the City of Riverside; and 3. Authorize the Public Utilities General Manager, or his designee, to attest to the California Energy Commission compliance filing required pursuant to Chapter 11, Section 2909 of the Commission's Regulations, certifying the Agreement's compliance with California's Greenhouse Gas Emission Performance Standard. BACKGROUND: The La Paz Solar Towe Project ("Project") is being developed by EnviroMission USA, Inc., an Australian company, and is anticipated to have commitments by lenders to fund the construction of the facility, subject only to reasonable and customary conditions precedent, by November 1, 2011, with a projected in service date of late 2014. The La Paz Project utilizes an innovative technology consisting of a 2,000 foot tower with a base of approximately 300 feet across and consists of three major components: the collector, the tower, and the turbine-generators (see Attachment 1). As the hot air rises due to temperature gradients from the base of the tower to the top of the tower, energy contained in the updraft is converted into mechanical energy by turbines (there are 32 turbine-generator sets each rated at 6.25 MW) which produce electricity for a total of 200 MW. Whenever there is solar radiation going into the collector, the process is regenerative and will continue as long as there is about a 90° Fahrenheit temperature difference between the base and top of the tower. The generators are similar to those found in hydroelectric developments. As a result, the solar tower has a similar useful life, power attributes, and operating characteristics as that of a hydro facility. Attachment 1 depicts the operating principle and artist's rendition of the project.