Energy Generation Energy Generation Project Project Board Meeting September 7, 2010 Prepared by: Mr. Douglas Barge Mr. Art Hand ess Services\Financial Modeling\Construction Planning\QECB\Presentation B09-07-10 Qualified Energy Qualified Energy Construction Bonds Construction Bonds
Energy Generation Project. Qualified Energy Construction Bonds. Board Meeting September 7, 2010. Prepared by: Mr. Douglas Barge Mr. Art Hand. Y: Business Services\Financial Modeling\Construction Planning\QECB\Presentation B09-07-10. i. Table of Contents. Opening Comments Process - PowerPoint PPT Presentation
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Energy Generation Energy Generation ProjectProject
Board MeetingSeptember 7, 2010
Prepared by: Mr. Douglas Barge Mr. Art HandY: Business Services\Financial Modeling\Construction Planning\QECB\Presentation B09-07-10
Qualified Energy Qualified Energy Construction Bonds Construction Bonds
Table of ContentsTable of Contents
A. Opening CommentsB. ProcessC. Financing PlanD. RecommendationE. Appendix
i
12 - 5
6 - 1112
DESCRIPTION PAGE NUMBER
Opening CommentsOpening Comments
The District has the opportunity to construct a solar power generation facility at no cost to the District
Financing will be subsidized by the Federal government Income cost savings from the project will provide
sufficient resources to pay off the debt Project should generate a net reduction in utilities costs
to the District
This project will be located at a number of District locations
1
ProcessProcess
ii
Project ScopeProject Scope The target photovoltaic (solar) system sizes are:
Approximately 1.95 Megawatts (MW) total from installations at McNair HS, Bear Creek HS and Christa McAuliffe MS in the PG&E service territory
150 kW for sites (District Office) located in the Lodi Electric service territory.
The respective sizing was based upon various factors
For the Lodi Electric territory, the system was sized based upon the maximum allowable rebate value ($375,000 one-time apportionment per application)
For the PG&E served sites, sizing was based upon available rebate monies ($0.15 per kilowatt), as well as feedback from District administration and the Board's Energy Subcommittee.
2
Contractor Selection Contractor Selection ProcessProcess Staff identified the largest and most experienced
photovoltaic contractors and integrators in California. These companies - along with all companies that had previously contacted the District regarding PV installations - were invited to participate in the Request For Proposal (RFP) process
RFP’s were issued to fifteen (15) companies. Ten attended the mandatory job walk
District received five responses, some of which included multiple companies joining together in their response. The five companies that responded were:
Cupertino Electric, SunPower, Sun Edison/SPG, SPP/DRI, and Diede Construction/SPI
Each company provided a comprehensive response that met the requirements of the RFP.
All respondents had significant experience in designing, developing, installing and financing medium to large PV projects.
3
Pricing DetailsPricing Details Each of the respondents were asked to provide
pricing in one or all of the three formats
Lump sum purchase price Power purchase agreement (PPA) with a fixed escalator PPA with a discount to utility tariff
Of the five respondents only Cupertino Electric provided all three pricing methodologies
Based on the pricing information received and the District’s desire to purchase the photovoltaic system outright, Cupertino Electric was the apparent best responder
Analysis AssumptionsAnalysis Assumptions1. 2011 is a partial year with savings projected to begin in mid May
2. Power generation estimates are based upon the installation of a 2,089 kW PV array with a .5% annual degradation
3. PG&E cost are escalated at 3.75%/year
4. Lease payment is based upon a financed amount of $9,915,000
5. Financed amount includes all soft costs including loan issuance, consulting fees, DSA inspection and the cost of an inverter replacement at year 10
6. Lease payment is based upon a Qualified Energy Conservation Bond (QECB) at a net rate of 2.31% for a 16.5 year term
7. California Solar Initiative (CSI) is a performance based rebate estimated at $.15/kWh for 5 years, is based upon the current Step 8 of the tiered program
8. REC revenue is calculated at $0.015/kWh of produced kWh and escalated at 5%/year
9. Insurance cost is escalated at 1%/year
10. Net Present Value calculated using a 4.0% discount rateA
Income SourcesIncome Sources
B
kWh CSI REC TotalYear $/kWh Generated Income Incentive Revenue Sources