REPORT TO COUNCIL
SUBJECT
Title
Action Authorizing the City Manager to Negotiate and Execute Agreements with Westlands Grape, LLC to Purchase Resource Adequacy Capacity up to $34 Million Annually from the Westlands Grape Battery Storage Project for Silicon Valley Power's Compliance Obligations
Report
COUNCIL PILLAR
Deliver and Enhance High-Quality Efficient Services and Infrastructure
Promote Sustainability and Environmental Protection
BACKGROUND
The City of Santa Clara's (City) Electric Department, Silicon Valley Power (SVP), is responsible for supporting the reliability of the grid through the demonstration of having sufficient resource adequacy capacity. Resource adequacy (RA) compliance ensures the safe and reliable operation of the grid in real-time providing sufficient resources when and where needed. Each utility or load serving entity is responsible for demonstrating it has sufficient RA either through the ownership of generation resources and/or procuring enough RA, measured in Mega Watt (MW).
As a California Independent System Operator (CAISO) market participant, SVP must follow the CAISO Tariff Requirements Section 40.2.1(b) to provide RA minimum of no less than 115% of its forecasted peak load. On April 25, 2006, the City Council, exercising their Local Regulatory Authority, adopted SVP's Integrated Energy Resource Policy (IERP) establishing SVP's Resource Adequacy guidelines to meet the minimums of the CAISO Tariff requirements. Without this authority, SVP would be subject to RA requirements set by the California Public Utilities Commission.
DISCUSSION
SVP's electric load has increased by more than 20% over the last decade and is expected to continue increasing over the next decade. Due to SVP's projected load growth, additional purchase of RA is warranted to meet the CAISO's RA requirement.
In late 2023, SVP was presented with an offer from Westlands Grape, LLC (Westlands) to purchase RA from a battery storage project (Grape) in Kings Cou...
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