HomeMy WebLinkAboutR-11549 making findings on energy savings and authorizing a Services Agreement with the Pacific Gas and Electric Company pursuant to California Government Code Section 4217R 11549
RESOLUTION NO. 11549 (2025 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, MAKING FINDINGS ON ENERGY SAVINGS
AND AUTHORIZING A SERVICES AGREEMENT WITH PACIFIC GAS
AND ELECTRIC COMPANY PURSUANT TO CALIFORNIA
GOVERNMENT CODE SECTION 4217
WHEREAS, it is the policy of the State of California and the intent of the State
Legislature to promote all feasible means of energy conservation and all feasible uses of
alternative energy supply sources; and
WHEREAS, the City of San Luis Obispo (“City”) desires to reduce energy costs at
its facilities; and
WHEREAS, the City has adopted policy in the Community Climate Action Plan for
Community Recovery and the Lead by Example Municipal Climate Action Plan that
provides direction to increase energy efficiency and eliminate the use of fossil fuels in City
facilities, and has subsequently completed the Carbon Neutral City Facilities Plan to
identify the highest priority implementation actions; and
WHEREAS, on February 4, 2025, the City Council adopted the Lead by Example
Work Program, which directs staff to “Complete priority electrification projects at the (1)
Swim Center, (2) Ludwick Community Center, (3) Corporation Yard, and (4) City Hall,
alongside the remaining energy saving lighting efficiency retrofits across all facilities
through the PG&E Sustainable Solutions Turnkey (SST) Program”; and
WHEREAS, Pacific Gas and Electric Company Power (“PG&E”) has developed
the Sustainable Solutions Turnkey Program (SST) to provide a turnkey, comprehensive
approach towards designing, building, managing, commissioning, monitoring and
validating energy conservation m easures analogous to the City’s priority Lead by
Example energy projects; and
WHEREAS, the State of California Government Code 4217 authorizes local
municipalities to enter into energy services and financing agreements outside of the
adopted procurement process, such agreements related to participation in the PG&E SST
Program, if the governing body finds that the project best serves the public agency and
can save the agency money; and
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WHEREAS, Government Code sections 4217.10 through 4217.18 specifically
authorizes the City Council to enter into one or more energy service contracts with any
person or entity without advertising for bids, pursuant to which that person or entity will
provide electrical or thermal energy or conservation services to the City, which may
comprise or include an energy conservation facility, if the anticipated cost to the City for
thermal or electrical energy or conservation services provided under the contract is less
than the anticipated marginal cost to the City of thermal, electrical, or other energy that
would have been consumed by the City in the absence of the energy service contract;
and
WHEREAS, the City proposes to enter into a Service Agreement and related
contract documents with PG&E, each in substantially the form presented at this meeting,
subject to such changes, insertions or omissions as the City Manager and City Attorney
reasonably deems necessary following the Council’s adoption of this Resolution; and
WHEREAS, pursuant to the execution of the aforementioned Service Agreement
PG&E would complete an Investment Grade Audit for the Priority Lead by Example
Energy Projects at the Swim Center, City Hall, and the Corporation Yard, as well as cost
savings measures related to lighting upgrades and battery storage energy systems at
various City facilities, hereinafter referred to as the “Priority LBE Energy Projects”; and
WHEREAS, PG&E and its subcontractor Willdan have provided the City with an
analysis showing the financial and other benefits of implementing the Priority LBE Energy
Projects, which analysis is attached hereto as Exhibit A and made part hereof by this
reference; and
WHEREAS, Exhibit A provides the anticipated costs of implementing and
operating Priority LBE Energy Projects over the lifetime of the proposed equipment and
upgrades, which is less than the, presented as evidence at the public hearing held the
date of this Resolution; and
WHEREAS, the analysis provided by PG&E in Exhibit A, along with other
information, analysis, and conclusions based on further due diligence by City staff,
demonstrates that the cost of the proposed contract for the energy and conservation
services is less than the anticipated marginal cost of thermal, electrical, or other energy
that would have been consumed by the City in the absence of those projects ; and
WHEREAS, pursuant to Government Code 4217, these findings have been made
at a regularly scheduled public hearing of the City Council, for which two weeks’ prior
notice was provided to the public, and following all other agenda and notification
requirements.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
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SECTION 1. Recitals. The recitals set forth above are hereby adopted as the
findings of the City in adopting the policies herein.
SECTION 2. Best Interests of the City. The City Council finds that the terms of the
Service Agreement and Investment Grade Audit Work Order are in the best interests of
the City. The project scope addresses the Priority Lead by Example Energy Projects as
adopted by City Council in the 2025-29 Lead by Example Work Program. The project will
further the carbon neutrality goals of the City’s adopted Climate Action Plan for
Community Recovery, and the project is consistent with the Genera l Plan as follows:
1. Land Use Element of the General Plan:
a. Policy 9.4 (Climate Action Plan) - The City shall maintain and
implement its Climate Action Plan to reduce community and
municipal GHG emissions consistent with State laws and objectives.
2. Conservation and Open Space Element of the General Plan :
a. Policy 2.2.1 (Atmospheric Change) - City actions shall seek to
minimize undesirable climate changes and deterioration of the
atmosphere’s protective functions that result from the release of
carbon dioxide and other substances.
b. Policy 2.2.5 (Model City) – The City will be a model of pollution
control efforts. It will manage its own operations to be as pollution
free as possible. The City will work with other agencies and
organizations to help educate citizens in ways to prevent air pollution
SECTION 3. Findings. In accordance with Government Code section 4217.12, and
based on data and analysis provided by Exhibit A, attached hereto and incorporated by
reference, the Council finds that the anticipated costs of implementing and operating the
Priority LBE Energy Projects will be less than the anticipated marginal cost to the City of
thermal, electrical, or other energy that would have been consumed by the City in the
absence of those projects. Based on these findings, the City has determined to forgo
standard procurement processes in favor of the alternative procurement process for
“energy services contracts” and “energy financing contracts” set forth in Government
Code section 4217.10 et al. for the City projects identified in Exhibit A, as it finds it best
serves the City’s interest.
SECTION 4. Execution of Agreements. The City Manager and City Attorney are
hereby authorized and directed to negotiate any further changes, insertions and
omissions to the Service Agreement and Investment Grade Audit Work Order as they
reasonably deem necessary following the Council’s adoption of this Resolution. The City
Manager is further authorized and directed to execute and deliver any and all papers,
instruments, opinions, certificates, affidavits and other documents and to do or cause to
be done any and all other acts and things necessary or proper for carrying out this
Resolution and said Agreements.
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SECTION 5. Environmental Review. The California Environmental Quality Act
(CEQA) does not apply to the execution of the Services Agreement with PG&E or
adoption of this Resolution because this action does not constitute a “Project” under
CEQA Guidelines Sec. 15378. Participation in the Investment Grade Audit is exempt from
environmental review as a Statutory Exemption under Section 15262, Feasibility and
Planning Studies. Projects identified in the Investment Grade Audit will need future
authorization and environmental review prior to actual project funding and construction.
Upon motion of Council Member Francis, seconded by Council Member Marx, and
on the following roll call vote:
AYES: Council Member Boswell, Francis, Marx, Vice Mayor Shoresman,
and Mayor Stewart
NOES: None
ABSENT: None
The foregoing resolution was adopted this 4th day of March 2025.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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EXHIBIT A
ANALYSIS ON PRIORITY LEAD BY EXAMPLE PROJECTS
PERFORMED BY WILLDAN ON BEHALF OF THE CITY OF SAN LUIS OBISPO
Description
Electricity
Savings
(kWh)
Electricity
Cost
Savings
Natural
Gas.
Savings
(therms)
Natural
Gas Cost
Savings
Water &
Sewer
Cost
Savings
O&M Cost
Savings
Total Cost
Savings Incentives* Installed
Cost
Simple
Payback
(years)
Swim Center
Decarbonization (36,922) $(7,983) 46,019 $60,662 $52,678 $62,084 $1,736,118 31.8
City Hall Boiler
Replacement (6,219) $(1,587) 4,444 $8,000 $6,413 $79,900 $930,000 132.6
Corp Yard
HVAC Elect. (28,398) $(6,709) 7,226 $11,799 $2,532 $7,621 $39,848 $400,000 47.3
DER - PV Only 343,105 $64,948 $64,948 $592,086 $1,973,618 21.3
Lighting 93,660 $27,404 $2,365 $29,768 $20,000 $472,901 15.2
Transformers* 16,356 $4,478 $4,478 $78,063 17.4
Onsite Pool
Chlorination* $41,000 $115,000 $156,000 $1,045,570 6.7
Total 381,583 $80,550 57,689 $80,461 $41,000 $119,896 $321,907 $799,918 $6,636,270 18.1
*The estimated incentives from PG&E GK12 are dependent on close collaboration between SLO, Willdan, and PG&E to meet
program requirements. Additional incentives may be available and some incentives may have conflicting requirements. Willdan w ill
support SLO from start to finish to maximize project incentives.
** Transformers and Onsite Pool Chlorination are proposed scopes in addition to scope of work outlined in the RFP.
If the Priority Lead by Example Energy Projects are implemented through the SST
program, the projected annual utility cost savings are $202,011, and the estimated annual
maintenance savings are $119,896. The total cost for the project (including capital costs,
oversight and contingencies, staff financing administration and oversight, anticipated
operation and maintenance cost impacts, and one annual lease payment) is $6,636,270.
Taken together, these projects are estimated to generate a n 18.1-year simple payback
period, after which point the City would generate cost savings. Given that the projected
lifespan the suite of proposed projects is longer than the 18.1-year simple payback period,
the finding may be made that these projects will generate cost savings for the City of San
Luis Obispo.
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