To: Honorable Mayor and Members of City Council
From: Steve Potter, City Manager
Prepared By: Deborah Elliott, Management Analyst II
TITLE:
Title
Facilities Energy Efficiency and Solar Project
LABEL
RECOMMENDED ACTION:
Recommendation
Receive a presentation on a potential Facilities Energy Efficiency and Solar Project and give direction to staff to move forward with financing to be approved by Council at a subsequent date.
Body
DISCUSSION:
The City Council has identified climate action as a focus area for their 2025-2027 budget cycle. With that in mind, staff from the City Manager’s Office, Public Works, and Utilities have been evaluating opportunities to reduce energy consumption, greenhouse gas emissions, and utility costs across City owned facilities. Staff have been in discussions with OPTERRA Energy Services since November 2024 working on a Facilities Energy Efficiency and Solar project and have identified a number of significant opportunities for improvements within City owned facilities. OPTERRA has recently completed facility assessments and preliminary analyses of potential Energy Conservation Measures (ECMs), including solar photovoltaic (PV) systems, battery energy storage, LED lighting upgrades, and mechanical (HVAC and water heating) improvements.
The project scope is still being refined, but the initial review shows that opportunities exist at many City sites to accomplish multiple goals including:
• Reduce energy use
• Reduce utility costs
• Replace or upgrade end-of-life equipment, reducing maintenance costs
• Generate on site energy through solar PV installation
• Evaluate opportunities for battery storage
• Reduce greenhouse gas emissions
City staff have coordinated with OPTERRA to develop this Project. Over the past 15 months, OPTERRA has:
• Analyzed the City’s utility data
• Conducted a preliminary assessment of potential energy savings opportunities
• Identified Federal incentives and target dates
OPTERRA has preliminarily identified up to 11 City owned facilities where upgrades may occur. Upgrades may include:
• Led lighting (interior and exterior), updated switches and sensors
• Mechanical upgrades (heating and cooling equipment and water heaters)
• Solar PV (canopy, rooftop, floating)
• Battery Energy Storage Systems (BESS)
The proposed project also includes an evaluation of opportunities for upgrades at the Hennessey Water Treatment Plant.
This project represents an opportunity to make energy efficiency upgrades to City facilities, while further reducing the City’s utility bill through solar generation and more efficient equipment. There is an opportunity to take advantage of Federal incentives that expire on July 4, 2026 and this project provides an opportunity to address the climate action Council Focus Areas.
Similar projects have been implemented at nearby agencies including the County of Solano, City of Suisun City, and City of American Canyon.
FINANCIAL IMPACTS:
OPTERRA’s assessment identifies improvements that will reduce energy costs to the City and project costs will be offset by the utility savings generated by the project. City staff are working with the City’s Municipal Advisors, NHA, to explore funding the upgrades through a tax-exempt lease purchase (TELP) financing. Prior to returning to Council, staff will review the OPTERRA provided final scope and project cost, and the City will work with NHA to run a Financing Request for Proposal (RFP), identify interested financiers, finalize financial terms, and prepare loan agreements. The City is expected to qualify for Federal Inflation Reduction Act (IRA) funding which will be distributed as a credit to the City after the solar PV systems are operational and the City files for the credit with the IRS. The City will evaluate the finances of a potential Utilities project at the Hennessey Water Treatment Plant separately from the facilities upgrades.
CEQA:
The City Manager has determined that the Recommended Action described in this Staff report is not subject to CEQA, pursuant to CEQA Guidelines Section 15060 (c).
DOCUMENTS ATTACHED:
None.
NOTIFICATION:
None.