To: Honorable Mayor and Members of City Council
From: Joy Eldredge, Utilities Director
Prepared By: Mark Holderbein, Management Analyst II
TITLE:
Title
Solar Array Maintenance, Repair, and Active Monitoring Agreement
LABEL
RECOMMENDED ACTION:
Recommendation
1) Approve and authorize the Utilities Director to execute an agreement with McDonell Electric Inc. in an amount not to exceed $300,000 for Equipment Maintenance, Repair, Annual Active Monitoring and Reporting for the Hennessey Solar Array System; 2) adopt findings per Government Code section 4217.10 the agreement for energy services supports a positive savings-to-investment ratio; and 3) determine the actions authorized by this item are exempt from CEQA.
Body
DISCUSSION:
The Utilities Department installed a solar array system at the Lake Hennessey intake pump station in 2006 to offset intensive energy costs to pump water 191 vertical feet from the base of Conn Dam to the water treatment plant. Critical components, including the inverters, have failed and staff seeks to bring the solar array system back online and ensure its long-term functionality. The project will replace failed components to restore the solar array to working order and obtain ongoing maintenance to provide for five years of continued maintenance, monitoring, annual inspections, and testing of the array, trackers, and inverters. The contractor will also be responsible for regularly cleaning the solar panels in addition to setting up a monitoring website so staff can track system performance and receive alerts about any new issues.
The City issued a Request for Proposals (RFP) via OpenGov Procurement on June 12, 2025 for an On-Call Solar Array Preventative Maintenance Service and Annual Active Monitoring Services. On June 30, 2025, the City received three proposals from qualified firms, all of whom met the minimum qualifications presented in the Request for Proposals.
A selection committee comprised of Utilities Department staff evaluated and scored each of the submitted proposals. Each firm was evaluated based on the following criteria: firm and staff qualification, experience; understanding of and approach to the scope of work; commitment; references; and pricing. After thorough review and deliberation, the selection committee recommended that a contract be approved for McDonell Electric Inc. The contract includes a rate schedule for labor and materials, a scope of services for solar array operations and maintenance and related services as well as initial system upgrade work to replace failed inverters and components that are out of warranty and beyond their useful life.
As noted above, the system is currently not operational and in need of reinvestment to reinstate energy production. During the first full year of production (2006-07) the solar array system produced 661,856 kWh of power. Conservatively assuming that with age the repaired solar array system would run at 90% of its original production, this project would yield annual production of 595,670 kWh beginning 2026-27. Based on 2025 rates, the solar power produced would result in a reduction in the City’s PG&E bill of $92,329.00. The payback period for the initial investment estimated at $215,000 to reinstate the system would be less than 3 years.
The maintenance and monitoring are estimated at approximately $17,000 per year and will ensure the system operates at maximum efficiency over the 5-year contract period. Therefore, the energy cost savings resulting from reinstating the solar array are greater than the cost to repair and service the system. Staff requests City Council adopt findings that this project is not subject to additional competitive bidding for the construction portion of the work per Government Code section 4217.10 since the energy service contract will have a positive savings-to-investment ratio.
FINANCIAL IMPACTS:
The Agreement provides a not to exceed expenditure for five years from date of execution. The Utilities Department will issue individual task orders through the
project manager for requested repair services and annual monitoring. Based on conservative estimates with no rate escalation, the solar power produced will save an estimated $92,329 per year at current PG&E rates resulting in over $460,000 savings, which far exceeds the investment in services provided of up to $300,000 over a five-year period. Funds are available in account 53060110-53320 to cover the costs associated with this Agreement.
CEQA:
City staff recommends that the City Council determine that the Recommended Action is exempt from CEQA pursuant to CEQA Guidelines Section 15301(a) (Existing Facilities) which exempts operation, repair, maintenance or minor alteration of existing public or private structures, facilities, mechanical equipment or topographic features involving no expansion of use beyond that previously existing.
DOCUMENTS ATTACHED:
ATCH 1 - McDonell Solar Array O & M Service and Repair Agreement
NOTIFICATION:
None.