Will this California City Become a Shining Example for Microgrids or a Cautionary Tale?

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To David Bliss the proposed Carson solar project offers the best of what the microgrid industry offers: a way to help green the energy supply of a disadvantaged community, save it some money, and provide electric reliability.

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So the founder of Charge Bliss is bewildered by what he’s about to face today: a possible vote by the city council to reject the project that his development company has been working on for nearly two years with the southern California city.

See update to this story on Tuesday’s action by the city council.

The project — which includes solar, battery energy storage, control technology, electric vehicle (EV) chargers, LED lighting, and chillers — won $1.5 million in funding under a California Energy Commission (CEC) challenge to develop advanced energy communities over 18 months.

Working with the city and various industry vendors — among them Tesla, Dynapower, Sunpower and PlugShare — Charge Bliss developed a detailed renewable, net zero design for the downtown’s civic center, city hall and several parks.

The microgrid would serve 15 city facilities under a 20-year power purchase agreement with financing arranged by investment firm 127 Energy. Under the approach advocated by Charge Bliss, Carson would make no upfront capital investment and pay only for energy provided.

Microgrid would cut costs 50-75 percent

Bliss says the Carson microgrid would cut electricity supply costs 50-75 percent, using various common strategies, such as energy efficiency, load management, peak shaving and time shifting.

A private investor plans to put $4.8 million into the project, and PlugShare has offered $250,000 in donations for the EV chargers. The project also is in the running for an additional $10 million from the CEC through Phase II of the grant competition. The application is due in September.

“For them to make this giant leap forward and to be a green city is to put up a shining example for every other similar community…” — Bliss

“This is a cash-strapped, inner-city community with bad air quality based on the CalEnviroscreen,” Bliss said. “For them to make this giant leap forward and to be a green city is to put up a shining example for every other similar community in the entire state — and show that this model works not just because it is the right thing to do from from a climate change and energy standpoint, but also economically.”

Key vote today in Carson City

However, staff of the city council see it differently and are recommending that the city abandon the project. The council plans to take up the issue at a meeting scheduled today at 5 p.m. PST.

“We appreciated the time and effort that Charge Bliss and 127 Energy, along with the California Energy Commission staff, put into the project development. However, based on the grant deadlines the city would not have had time to complete the power purchase agreement in time to meet the deadlines,” said Kenneth Farfsing, city manager, in an email yesterday to Microgrid Knowledge.

Bliss, however, says that the PPA agreement has been in the city’s hands since December 2017.

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“All points of contention have been addressed with their attorney and compromises reached for each one, including the project developers and investors accepting risks that are generally held by the host sites,” he said. “For example, they would not agree to be financially responsible for defects in their own property such as pre-existing ground contamination. We agreed to cover such costs up to the limits of grant funding.”

But Farfsing says there are other issues too, such as the latest financing plan which has the city investing $3.8 million. Bliss says the upfront money was the city’s idea; it came into play only because of a request by the city to pay cash for LED lights and chillers, rather than take the more common PPA approach of wrapping equipment into financing.

“We not only did not suggest it but expressed our surprise at their wanting to pay cash,” Bliss said.

Unresolved issues?

Bliss also disputed Farfsing’s characterization that the project has several unresolved issues, including incomplete design plans and budget.

“Every other participant, including the California Energy Commission, CAISO [California Independent System Operator), SCE [Southern California Edison], SunPower, Tesla, and Trane have agreed the project is well-designed and virtually ready to build,” Bliss countered.

Bliss said that all that remains are soil tests, some civil engineering, permitting and interconnection. He described the project as “virtually shovel-ready.”

“All of these processes are funded in Phase II [of the grant] and, most importantly, the city is the permitting agency that can assure full project quality before permitting or inspecting,” Bliss said.

Battery replacement in dispute

And finally dispute exists between the two parties about the battery system.

The city said the replacement terms are unacceptable.

“…the project’s energy saving were based in a good part on battery storage assisting the city in minimizing peak demand rates.” — Farfsing

From a technical standpoint and critical to the financing, the project’s energy savings were based in a good part on battery storage assisting the city in minimizing peak demand rates for electricity,” Farfsing said. “The project developers would only commit to replacing the batteries in ten years. Staff felt that the city needed the certainty that the batteries would function at a minimum of 80 percent efficiency during the ten year period of time prior to their replacement.”

Bliss said that the city’s battery concerns have been addressed multiple times in writing.

“The industry standard is to maintain battery capacity at or above 80 percent of initial capacity by whatever means is required. This has been agreed to without limitation. The investor has budgeted to replace the batteries at 10 years as this is the projected lifespan given by Tesla. Regardless, the investor is contractually obligated to maintain the batteries in proper working order,” Bliss said.

Bliss also noted that a contingency in the contract allows the city to cancel if it does not win the final $10 million grant from the CEC.

The microgrid project would add 40 Level 2 EV chargers and four ultra-fast DC chargers, donated by PlugShare. It also features a 2.3 MW in distributed solar, using SunPower canopy design, about 4 MWh of battery, and controls.

Bliss worries that the city does not understand the value it is getting from the project or how hard it is for struggling communities to attract green energy development. He noted, for example, the dearth of EV charging stations in Carson City despite the strong push for the technology elsewhere in California. Carson City is a “black hole” in the midst of charging stations all around, he said.

What if it goes down in flames?

Bliss is hoping microgrid advocates will attend the city council meeting today or write in support of the project. He says the council vote could have broad industry ramifications and affect decisions by other developers considering community microgrid projects.

“There is a real tragedy here because communities like Carson are overlooked when it comes to clean energy infrastructure.” — Bliss

“If this goes down in flames because we’ve been quibbling about small differences in say PPA prices, then unfortunately the message to the CEC and other funders is that cities like Carson may not be the right target, and the money and interest will turn elsewhere,” Bliss said. “There is a real tragedy here because communities like Carson are overlooked when it comes to clean energy infrastructure.”

A personal mission

A surgeon by profession, an EV driver since 2011, a home solar user, a vegan, Bliss feels strongly about bringing microgrid technology to under-served communities. Bliss Charge already has developed a microgrid at the Kaiser Permanente medical center, located in Richmond, California, another disadvantaged community.

To him what happens at today’s city council meeting is personal. “I’m in love with this process of greening this world, and in particular doing it for otherwise disregarded communities,” he said.

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. Elisa,
    We need to connect. See my info below.
    Much of my work has been about Agile Energy
    Systems (my first book after Gov Davis was
    recalled, since I was one of his Energy Advisors,
    maybe we met then) in 2004 and now updated
    last year from Elsevier Press, 2017. Woody

  2. Jeff Harding says:

    As a member of the design team, I would like to thank you for bringing this subject to light. It will be unfortunate if the project falls through. If it does, hopefully the lessons learned will help other developers overcome similar obstacles

  3. Mark Hewitt says:

    This is a classic issue of politics overtaking the right thing to do for the community. I know as I have served on a City Council and as Chairman of our Utility board in the past.

    Today, the solution for this type of shift in energy planning, and frankly merely achieving sustainability requires the private sector working together with towns and regulators to produce a “Solution Based” approach, not just the sale of battery plants and technology that will be outdated in a year or two.

    I would recommend that the visionary’s work create a developer, willing to take on the business of establishing the MicroGrid, and all that accompanies that. Broadband, CHP plants, and beyond. By then working with financing plans the town’s policymakers and stakeholders are held to keep to a proper fiscal management plan, while the Developer delivers on the solution.

    This then promotes new development, housing, commercial, industrial which has more than 20~40% increase in value and creates new jobs and economic sustainability in the process.

  4. Steven B Smith says:

    This experiment was already done in Spain from 2008-2012, it was an economic job killing disaster, given the CA exodus of business the same result will happen in CA and the rest of nation unless stopped.
    http://therightscoop.com/spains-green-disaster-a-lesson-for-america/
    Liberals in America have less than flat learning curve.

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