Approve a Change Acknowledgment amending the Energy Services Agreement (Yolo County Agreement No. 22-222) with FFP BTM Solar LLC (ForeFront) regarding the Landfill Borrow Site Solar Project to increase the power purchase rate and revise the project milestone dates due to unanticipated distribution upgrade requirements and other cost changes; authorize the Director of the Division of Integrated Waste Management or the Director's designee to sign and administer the Change Acknowledgment in substantially the form provided; and acknowledge the termination of the Energy Services Agreement for the Community Services Department site at 292 W. Beamer Street (Yolo County Agreement No. 22-225). (No general fund impact) (Lindbo/Juhler)

On September 13, 2022, the Board of Supervisors approved three power purchase and energy storage agreements with FFP BTM Solar, LLC (ForeFront) through the School Project for Utility Rate Reduction (SPURR) Renewable Energy Aggregate Procurement (REAP) program, an aggregated solar procurement program that works to secure pre-negotiated project pricing and terms for California public agencies and non-profit educational organizations. The three County locations selected for these solar projects were: 1.) Landfill Borrow Site, 2.) Beamer Campus Parking Lot, and 3.) Landfill Composting Facility. In 2023, ForeFront began site survey field work and geotechnical evaluations. In early 2024, ForeFront notified the County of increased project costs, primarily distribution upgrades required by PG&E, which temporarily put the projects on hold.

On April 11, 2024, the Division of Integrated Waste Management staff and the Department of Community Services Chief Fiscal Admin Officer conferred with SPURR to review the industry calculator provided by ForeFront, which provided justification for the primary cost increase categories which were being presented across the solar industry.  Additional review was needed since project finance costs increased by double-digit percentages due to the geotechnical findings and the assessed PG&E upgrade costs. This led to a per kWh price increase from $0.1647 to $0.2697 at the Landfill Borrow Site and from $0.1716 to $0.2895 at the Beamer Campus. After negotiation and analysis, County staff determined that it was best to proceed with only the Landfill Borrow Site project at the new rate of $0.2697 per kWh (see PPA savings projections in Attachment C).  With ForeFront funding the infrastructure over the 20-year term outlined in the original agreement, it is still anticipated that the Landfill will save money and this partnership locks us into a stable rate, so that if PG&E rates further increase as expected, the Division of Integrated Waste will still maintain the rate established in the proposed amendment (Change Acknowledgment) and be self-sufficient for its energy consumption needs.

Because the kWh per hour rate increase exceeded the Maximum Cost Change authorized in Agreement No. 22-222 (Attachment B), an amendment is required using the Change Acknowledgment form the parties agreed to in the original agreement. Any further unanticipated distribution upgrades or cost changes would be subject to the maximum per kWh increases set forth in the Change Acknowledgment with a maximum aggregate cost change increase of $0.0107 per kWh.

Approval of this Change Acknowledgment (Attachment A) will set in motion an updated construction schedule under Agreement No. 22-222, whereby PG&E would be distributed payment by ForeFront on or before October 15, 2024 to start the transformer upgrade design work.   It is anticipated that this will be completed by March of 2025 allowing ForeFront time to procure the necessary equipment to deploy the solar project at the Landfill Borrow Site.  Groundbreaking is estimated for May 2025 with construction completion in Fall 2025, ahead of the April 15, 2026 Net Energy Metering (NEM) 2.0 deadline. The Change Acknowledgment also reflects these changes to the Guaranteed Construction Start Date (May 5, 2025) and Guaranteed Commercial Operation Date (later of October 9, 2025 or 60 days from date PG&E authorizes operation).  The Change Acknowledgment allows for day-to-day extensions of the Guaranteed Construction Start Date due to PG&E-related delays but only until June 30, 2025 at which time the contract will terminate. 

Because of the significant costs increases to the Community Services Department site project with a PPA rate that exceeds the maximum cost change authorized per the Energy Services Agreement (Yolo County Agreement No. 22-225), Forefront is authorized to terminate the agreement with no further liability to the County. The parties have discussed and confirmed that the County cannot agree to the increased PPA rate of $0.2895 per kWh for that site and that Forefront has opted not to proceed with that project.  

The third Compost Facility site has been put on hold pending resolution of the Landfill and Community Services Department sites and the parties anticipate discussing that agreement in the near future.

Staff worked with Forefront Solar, SPURR and County Counsel to complete this item.