REPORT TO COUNCIL
SUBJECT
Title
Approve a Power Purchase Agreement with Staten Solar Corporation for Solar Array Installation for Lakewood Library (F25-011)
Report
REPORT IN BRIEF
Approval is requested for a Power Purchase Agreement with Staten Solar Corporation of San Jose, California, for the installation of solar arrays at the Lakewood Branch Library and Learning Center.
EXISTING POLICY
Pursuant to Chapter 2.08 of the Sunnyvale Municipal Code, contracts for this type of service are awarded pursuant to a Request for Proposals (RFP) best value process, unless otherwise exempt from the competitive bidding process. Additionally, City Council approval is required for the procurement of goods and/or services exceeding $250,000 in any one transaction.
Council Policy 3.5.1 - Energy: Support installation of cost-effective energy efficiency measures in municipally owned buildings and facilities
ENVIRONMENTAL REVIEW
With respect to the proposed solar installation on the roof of the new Lakewood Library and Learning Center, the project is exempt under CEQA Guidelines Section 15303, which applies to construction of new, small facilities or structures; installation of small new equipment and facilities in small structures; and the conversion of existing small structures from one use to another where only minor modifications are made in the exterior of the structure.
BACKGROUND AND DISCUSSION
The Lakewood Branch Library and Learning Center Project was created as a partnership between the City of Sunnyvale, the Sunnyvale Elementary School District, and the Fremont Union High School District. Through this agreement, the City is managing the design and construction of the project, and the two school district partners will each contribute a fixed amount of funding to the project, with the remaining costs covered by the City. The Learning Center portion of the new facility features program rooms for each school district's use. Once the facility is operational, the cost of utilities will be shared equally between the partners.
In alignment with Council Policy on Energy and the adopted Climate Action Plan, solar photovoltaic panels will be installed on the building to offset the purchase of electricity from Silicon Valley Clean Energy (SVCE) and to reduce greenhouse gas emissions. Rather than directly purchasing the solar system at significant upfront costs, a Power Purchase Agreement (PPA) approach was determined as the best value option for the City. The PPA ensures a continuous and uninterrupted energy supply. If the system does not perform according to the agreement, the PPA provider does not receive payment, and the City would continue to purchase energy directly from SVCE. Under the PPA, Staten Solar Corporation would be responsible for financing, constructing, operating, and maintaining the system, as well as guaranteeing output to the City throughout the contract duration. Additionally, Staten would be solely responsible for the maintenance and operation of the solar systems. The PPA also provides the City with a buy-out provision, allowing the City flexibility to take ownership of the panels and assume the responsibility for maintenance in the future, depending on staff resources and expertise.
The City contracted with Optony Inc., a global research and consulting firm specializing in solar projects, to develop a summary of the available roof area and other design criteria. A Request For Proposals to design a solar system based on the design area that would maximize the City’s benefit using normalized PPA rates was advertised on Demandstar and issued to qualified firms in September 2024. Three responsive proposals were received. The proposals were evaluated on cost, experience, system design, and long-term value. Staten Solar’s 25-year PPA proposal was ranked highest overall by Optony and City staff.
FISCAL IMPACT
Entering into a PPA has no immediate fiscal impact. Construction management and other consultant costs for the Lakewood Branch Library and Learning Center are accounted for under Project 830600.
The solar power system is expected to avoid approximately $832,000 in utility costs over the 25-year contract term.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Take the following actions:
- Approve a Power Purchase Agreement, in substantially the same form as Attachment 1 to the report with Staten Solar Corporation of San Jose for the installation, financing, operation, and maintenance of solar arrays at the Lakewood Branch Library and Learning Center; and
- Authorize the City Manager to execute the Agreement when all the necessary conditions have been met.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: David Battaglia, Purchasing Officer
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Chip Taylor, Director of Public Works
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Draft Power Purchase Agreement