California School District Releases Terms, Pricing on Solar Microgrid Contracts with Engie

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The Santa Barbara, California, school district this week approved entering into power purchase and performance service contracts with Engie Services US for 14 solar facilities, including six solar microgrids.

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At a January 12 meeting, the Santa Barbara Unified School District board gave the green light to power purchase agreements (PPAs) for each solar site. The 28-year contracts provide a fixed price of 13.55 cents/kWh plus an annual capacity payment that falls gradually from $41,951 to $36,641.

The board also approved a performance services agreement that includes guaranteed costs savings from the solar and energy storage facilities.

Engie will design, build, own and operate the solar facilities and microgrids, which total close to 5 MW of solar and 5 MWh of battery storage. The facilities are expected to be operating by the end of the year.

$7.1 million in expected savings for Santa Barbara schools

The school district expects to save about $7.1 million in electricity costs over the life of the contracts, which will cover 90% of the district’s electricity use, Steve Vizzolini, the school district’s director of facilities and modernization said during the board meeting.

The district will pay $887,000 in upfront costs, which will be covered by bonds.

The pending contracts with Engie grew out of a request for proposals that drew eight qualified bids. 

The school board in 2019 hired the Clean Coalition and Sage Energy Consultants, which conducted a feasibility study for the project. The Clean Coalition helped run the solicitation and consulted on the PPA.

Besides reducing the school district’s electricity costs, the Clean Coalition, a California nonprofit, expects the project will produce $6.5 million in resiliency benefits. The organization has developed a standardized value of resilience methodology, which the group contends can help potential customers understand the value of microgrids.

The 28-year contracts provide a fixed price of 13.55 cents/kWh.

The innovative performance contract between the school district and Engie includes guaranteed electric bill savings from solar+storage and guaranteed resilience performance associated with the solar microgrids, according to the Clean Coalition. 

“These needed innovations led to complex contract negotiations, and, in the end, resulted in standardized performance guarantees in terms of guaranteed bill savings and resilience performance,” said Craig Lewis, the Clean Coalition’s executive director.

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Blueprint for other organizations

The Santa Barbara Unified School District contracts provide a blueprint for standardizing solar microgrid PPAs to ease the process for other school districts and entities that want PPA-facilitated solar microgrids, the group said.

Santa Barbara is in one of the most grid-vulnerable regions in California — the Goleta load pocket — a 70-mile stretch of coastline north of Los Angeles. The area gets most of its power from a set of transmission lines that run through 40 miles of mountainous terrain that is highly prone to wildfires, mudslides and earthquakes, according to the Clean Coalition.

The group said the Santa Barbara school district’s solar microgrid provides a building block for the Clean Coalition’s proposed Goleta Load Pocket Community Microgrid.

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