TITLE
Recommendation to authorize City Manager, or designee, to execute all documents necessary for a solar self-generation energy system interconnection agreement between the City of Long Beach, the City of Los Angeles Department of Water and Power, and California Resources Corporation. (Citywide)
DISCUSSION
Long Beach Energy Resources (ER) is proposing to add approximately one megawatt of solar power to its oil operating area. The only location with enough acreage for the solar photovoltaic panels is at Pier A West which resides within the City of Los Angeles Department of Water and Power (LADWP) operating region. The solar system will be installed behind the electrical meter. The proposed layout is shown in Attachment A. The oil operating area is within the Long Beach Harbor District, but on land controlled by the City of Long Beach (City). This is not a power purchase agreement, but a recommendation requesting to enter into the interconnection agreement between LADWP, California Resources Corporation (CRC) as the City’s contractor, and the City as property owner.
The solar photovoltaic system (system) will be purchased and installed by CRC. The one-time cost of purchasing and installing the solar photovoltaic system is estimated at $3 million, offset from oil field revenues. CRC will be responsible for the system operations and maintenance. The project has a five-year payout to be realized through reduced electricity costs and has a positive net present value of $1 million. In addition to ongoing reductions to electricity costs, the project will increase reliability of the power supply and reductions in emissions. More importantly, the system will reduce the environmental impact of oil operations by offsetting an estimated 377 metric tons of CO2e annually. The estimated CO2e reduction is based on a blended grid carbon intensity value reported by the California Environmental Protection Agency.
This matter was reviewed by Principal Deputy City Attorney Richard F. Anthony on October 26, 2022 and by Revenue Management Officer Geraldine Alejo on November 11, 2022.
TIMING CONSIDERATIONS
City Council action is requested on December 6, 2022, to allow the execution of the interconnection agreement with LADWP and CRC.
FISCAL IMPACT
There is no net fiscal impact to the City associated with this recommendation, including no impact to projected annual net oil revenues in the Tidelands Oil Revenue Fund Group. Expenditures will be directly paid for by CRC and is fully offset by oil revenues from operations. Expenditures include the initial one-time cost of $3 million to purchase and install the solar photovoltaic system, as well as the ongoing operating and maintenance costs. Following installation, the project is anticipated to result in reduced electricity costs to oil operations. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. There is no local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
ROBERT M. DOWELL
DIRECTOR OF ENERGY RESOURCES
APPROVED:
THOMAS B. MODICA
CITY MANAGER