REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager to amend and execute the existing Electric Service Agreement with Intel Corporation
Report
BACKGROUND
On October 24, 2017 the City Council approved an Electric Service Agreement ("Agreement" - Attachment 1) with Intel Corporation ("Intel") for the purchase of electricity on a long-term basis in exchange for certain discounted rates. At that time, Intel had on-site distributed generation which included 1 MW of solar photovoltaics and 1 MW of natural gas fuel cells which operated in parallel with Silicon Valley Power (SVP) generation.
As part of the agreement Intel was permitted to self-generate an additional 5 MW of energy immediately with an additional 5 MW after certain usage thresholds had been met. This generation would operate in parallel to SVP generation and for which SVP provides back-up resources. Intel has installed the first 5 MW using natural gas fuel cells.
The City Council, on May 7, 2019, adopted a resolution amending Silicon Valley Power's Rule and Regulations to require that new and modified customer-owned self-generation units interconnecting with SVP's system utilize renewable generation or fuel sources. The amended Rules and Regulations become effective June 1, 2019. The City made a commitment that any existing agreements or applications completed prior to the June 1 date would be grandfathered and thus not subject to the amended Rules and Regulations requiring all customer-owned self-generation units interconnecting with SVP's system be a renewable electrical generation facility, as defined in California Public Resources Code section 25741.
Staff had initially requested Council to delegate authority to the City Manager to amend the Intel Agreement on May 7, but it was deferred to May 21, 2019 to provide the City Council more information about the action and ensure proper compliance with the Ralph M. Brown Act.
DISCUSSION
Staff has worked with Intel as part of the new requi...
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