REPORT TO COUNCIL
SUBJECT
Title
Action to Accept Federal Funding for the Silicon Valley Power City of Santa Clara - Fire Station Microgrid Project; Authorize the City Manager to Execute All Agreements and Documents Related to Accepting Federal Funding for an Estimated Amount of $500,000, and Approve Related Budget Amendments
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructures.
BACKGROUND
In early 2021, the United States House Appropriations Committee elected to bring back the Community Project Funding (CPF) program to fund projects like Silicon Valley Power’s Fire Station Microgrid project. In 2022, the City submitted a request for CPF to Senator Feinstein, Senator Padilla, and Congressman Ro Khanna for a City of Santa Clara - Fire Station Microgrid Project located at the City of Santa Clara’s Fire Station #2 at 1900 Walsh Ave. This project was submitted for consideration to the Federal Appropriations Committee and is currently pending award. Attachment 1 (Pending Award No. DE-EE0010775 Letter, dated June 8, 2023) and Attachment 2 (Pending Award No. DE-EE0010775 Follow-Up Letter, dated July 12, 2023) details the award amount and process to receive the award.
DISCUSSION
The City of Santa Clara’s electric utility, Silicon Valley Power (SVP), is developing a multi-benefit Fire Station Microgrid Project which encourages microgrid technologies that provide community benefits through decarbonization and climate resiliency. A microgrid is a self-contained energy system that can operate independently from the main power grid as needed or in a mutually beneficial operation mode to enhance grid performance. The Fire Station Microgrid Project would provide environmental benefits through the reduction of greenhouse gases (GHGs) and criteria pollutants by avoiding the use of diesel backup generators, and it would also provide resiliency and reliability to support City operations and the community during outage events, catastrophic events, including those caused by climate change.
SVP initially proposed to develop two renewable energy microgrids to support two City of Santa Clara Fire Stations. The microgrids would provide up to four hours of run‐time providing back‐up power during grid outages. SVP partnered with the Fire Department to prioritize suitable locations for microgrid projects. Fire Station #1 and Fire Station #2 were identified as the best sites for microgrids, and SVP moved forward with a feasibility study. Due to increased costs, the microgrid project at Fire Station #1 was determined no longer feasible. As for Fire Station #2, the microgrid project remains viable and becomes even more ideal with the integration of an enhanced Emergency Operations Center for the City of Santa Clara.
The Fire Station Microgrid Project t will include battery energy storage, a photovoltaic solar system, and integrate electric vehicle charging infrastructure. Another primary objective of the project is to assist with the development of SVP’s microgrid standards which will assist SVP with any future microgrid development projects within the City. Other project benefits include local and statewide electric grid decarbonization, grid resiliency and reliability, critical and non-critical site load support. This project may also serve as a real-world model for municipalities or other developers pursuing similar projects.
The project is currently in the 30% design phase and is anticipated to be completed by FY 2026/27.
Federal Funding Documents
Per CPF program requirements, the Department of Energy has been designated as the funding administrator for this CPF funding. Staff is requesting that Council authorize the City Manager to execute all agreements and documents related to accepting federal funding for the Fire Station Microgrid project at Fire Station #2. SVP is anticipated to receive a $500,000 Federal Funding Award.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that it solely facilitates the procurement of grant funding and is therefore a fiscal activity that does not involve the commitment to a specific project which may result in a potentially significant physical impact on the environment. The construction of the Fire Station Microgrid project will require separate City Council action and therefore further CEQA analysis.
FISCAL IMPACT
The federal funding of $500,000 requires a minimum local match of 20% ($100,000). This project is budgeted in the Electric Utility Capital Fund in the Renewable Energy Microgrid project (CIP 2446) and sufficient funds are included in that budget for the required local match. The federal funding will cover a portion of material costs as SVP has seen increased material costs over the last two years. Material costs are estimated to be $3.2 million with the remaining project costs for design, engineering, and construction.
After funding is received, SVP will coordinate with the Finance Department for any budget actions needed to appropriate funds.
COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Accept Federal Funding Under the Community Project Funding (Grant Funding) administered by the Department of Energy for an estimated amount of $500,000 for the Fire Station Microgrid Project (Project);
2. Authorize the City Manager or designee to execute any agreements, amendments, and documents associated with the Grant Funding and to take any necessary actions in connection with that funding; provided that any agreements and amendments shall be subject to the review and approval as to form by the City Attorney; and
3. Approve FY 2023/24 budget amendment in the Electric Utility Capital Fund to increase the Other Agencies Revenue estimate to recognize Grant Funding in the amount of $500,000 and increase the Project (CIP 2446) in the same amount the to bring the total project budget to $4,651,773.89 (five affirmative Council votes required to appropriate additional revenue).
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Pending Award No. DE-EE0010775 Letter, dated June 8, 2023
2. Pending Award No. DE-EE0010775 Follow-Up Letter, dated July 12, 2023