| ITEM #: 16. DATE: 08/26/2024 AI #:2229 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | AERIAL CROSSING LICENSE OVER SARIVAL AVENUE |
| STAFF PRESENTER(S): | Sarah Chilton, Deputy City Attorney |
SUMMARY
Request approval of a crossing license for an overhead electrical line across Sarival Avenue, generally located near the intersection of Sarival Avenue and Commerce Drive.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
Approve License Agreement for Sarival Avenue Crossing between the City of Goodyear and Pluto Energy Storage, LLC. (Sarah Chilton, Deputy City Attorney)
FISCAL IMPACT
This license will generate a one-time $2,500 fee and an annual fee based on the size of the license area. The license area is 6,527 feet and the initial annual fee is calculated at $2.80 per square foot, with regular increases based on increases in the average Consumer Price Index for the Phoenix Area. The annual fee for the first year would be $18,276.
BACKGROUND AND PREVIOUS ACTIONS
Pluto Energy Storage LLC (“Pluto Energy”) owns approximately 5.8 acres of land generally located at the southwest corner of Sarival Avenue and Commerce Drive upon which it intends to develop a 75 megawatt Battery Energy Storage System. Pluto Energy intends to construct a 69 kilovolt (kv) overhead line that connects its facilities to an Arizona Public Service (APS) substation across Sarival Avenue from Pluto Energy’s property. To do this, Pluto Energy requested an aerial crossing license allowing it to cross public right-of-way.
STAFF ANALYSIS
The term of the proposed license is twenty-five (25) years from September 26, 2024 to September 25, 2049. It may be renewed for two additional ten (10) year terms subject to mutual agreement of the parties. The rights under the proposed license allow Pluto Energy to install one overhead line. No other facilities are to be constructed within the easement area, and the license is not assignable and will automatically terminate if any other entity operates the overhead line.
Staff’s concerns over supporting the requested license are related to the safety of the public who traverse Sarival Avenue and city staff who maintain Sarival Avenue improvements, including the traffic signal at the intersection of Sarival Avenue and Commerce Drive. The parties have spent substantial time negotiating terms that address staff’s concerns. To that end, the proposed license includes the following terms:
· A minimum clearance of 30’ vertical clearance between the overhead line and Sarival Avenue and a minimum clearance of 25’ between the overhead line and its supporting poles and the traffic signal poles located at the corner of Sarival Avenue and Commerce Drive.
· Pluto Energy is responsible for all damages to city property caused by the operation and maintenance of the overhead line or the exercise of any rights under the License, and they are required to provide a bond of at least $5 million per occurrence to secure this obligation.
· The License includes a broad defense and indemnification clause in favor of the city and requires increased limits for insurance.
· Pluto Energy is required to have a Safety Representative available to the city 24 hours a day, 365 days a year.
· Pluto Energy is required to maintain a staffed maintenance facility within twenty miles of the overhead line and shall have a Maintenance Representative available to do routine maintenance and emergency repair work 24 hours a day, 365 days a year.
· Pluto Energy is required to monitor the overhead line remotely 24 hours a day, and to immediately shut down power to the overhead line in the event of a power or structural failure. The License will terminate upon the failure to comply with this provision.
· Upon the expiration or termination of the License, Pluto Energy is required to remove the overhead line and to post a $1 million bond to secure this obligation.
Based on the substantial protections incorporated into the License, staff recommends Council approval of the proposed license.
Staff’s concerns over supporting the requested license are related to the safety of the public who traverse Sarival Avenue and city staff who maintain Sarival Avenue improvements, including the traffic signal at the intersection of Sarival Avenue and Commerce Drive. The parties have spent substantial time negotiating terms that address staff’s concerns. To that end, the proposed license includes the following terms:
· A minimum clearance of 30’ vertical clearance between the overhead line and Sarival Avenue and a minimum clearance of 25’ between the overhead line and its supporting poles and the traffic signal poles located at the corner of Sarival Avenue and Commerce Drive.
· Pluto Energy is responsible for all damages to city property caused by the operation and maintenance of the overhead line or the exercise of any rights under the License, and they are required to provide a bond of at least $5 million per occurrence to secure this obligation.
· The License includes a broad defense and indemnification clause in favor of the city and requires increased limits for insurance.
· Pluto Energy is required to have a Safety Representative available to the city 24 hours a day, 365 days a year.
· Pluto Energy is required to maintain a staffed maintenance facility within twenty miles of the overhead line and shall have a Maintenance Representative available to do routine maintenance and emergency repair work 24 hours a day, 365 days a year.
· Pluto Energy is required to monitor the overhead line remotely 24 hours a day, and to immediately shut down power to the overhead line in the event of a power or structural failure. The License will terminate upon the failure to comply with this provision.
· Upon the expiration or termination of the License, Pluto Energy is required to remove the overhead line and to post a $1 million bond to secure this obligation.
Based on the substantial protections incorporated into the License, staff recommends Council approval of the proposed license.