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Home My WebLink About9/16/2025 Item 6d, Floyd, Maidrand and Read - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: September 16, 2025 TO: Mayor and Council FROM: Aaron Floyd, Interim Public Works Director Prepared By: Noah Maidrand, Engineer II Chris Read, Sustainability Manager VIA: Whitney McDonald, City Manager SUBJECT: ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT ASSIGNMENT Staff received the following questions, regarding Item 6d. to authorize the contract assignment of the City’s Solar Power Purchase Agreements (PPA’s). The questions are below with staff’s response shown in italics: 1) Will the solar array at the SLO Swim Center/Sinsheimer Park cover the full lot, or only a portion? Would covering the full lot provide more offset savings? Only a portion of the parking lot can be covered with a solar array under this project. The allowable system size is limited to that specified in the 2023 Net Energy Metering (NEM) application, which was determined by the capacity of the existing electrical panel. Any significant change in size (+/- 10%) would result in losing NEM 2.0 status. Ultimately, this limits solar generation to 110% of the existing load, which will be generated by solar panels covering the area shown for the system in Attachment C of the Agenda Item. 2) Will the array at the SLO Swim Center/Sinsheimer result in any loss of parking spaces? Would the location of the project limit potential future expansion of the pool facilities? The array will be canopy mounted with the support columns installed in the existing median planters of the parking lot. The structure will not eliminate any existing parking spaces. Several new accessible parking spaces will be installed under the canopy to meet ADA requirements. As a result, two parking spaces will be converted into accessible landing spaces and paths of travel. Staff took into consideration any future expansion of the swim center during the solar array design phase. Solar arrays are placed in the western portion of the parking lot to allow facility expansion into the south and east. Expanding in this direction would have the least impact on parking and the facility itself. ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT ASSIGNMENT Page 2 3) Page 99 of the Agenda Packet shows the estimated Net Energy Metering (NEM) rate savings over one year and 20 years compared between NEM 2.0 and NEM 3.0. Can you please clarify that the red text in the column indicating “year one savings” indicates negative numbers, meaning a cost to the City rather than savings? Will the Cultural Arts District Parking Structure be the only facility with actual cost savings in year one? Will all facilities have cost savings over the 20 years of the system? The red text in the year one savings column indicates a cost (ie higher electrical bills), rather than savings. The PPA rate the City pays for solar electricity is the same in year 1 as in year 20. While grid electricity costs increase each year, the City’s PPA stays the same. That means that value of the solar increases through the life of the PPA. A simplified version of the table included in Page 99 of the Agenda Packet is included below for reference ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT ASSIGNMENT Page 3 Site Specific Savings Comparison: NEM 2.0 vs. NEM 3.0 NEM 2.0 Scenario Site Y1 Production (kWh) % Energy Offset Pre-Solar Utility Bill Year 1 Savings 20 Year Savings Bus Yard 521,623 11% $1,146,030 ($18,150) $532,083 Sinsheimer 455,286 113% $128,449 ($27,112) $572,412 Fire House 224,406 63% $108,165 ($27,910) $38,710 CAD Parking Structure 354,968 92% $157,819 $33,122 $1,590,066 NEM 3.0 Scenario Site Y1 Production (kWh) % Energy Offset Pre-Solar Utility Bill Year 1 Savings 20 Year Savings Bus Yard 521,623 11% $1,146,030 ($18,159) $531,849 Sinsheimer 455,286 113% $128,449 ($96,636) ($1,519,714) Fire House 224,406 63% $108,165 ($43,508) ($457,927) CAD Parking Structure 354,968 92% $157,819 ($30,054) ($56,632) All projects except the parking structure will cost more to operate compared to grid electricity initially, but the City will start to see savings based on the fixed price PPA as the contract matures over 20 years. The timeline for when positive cashflow is anticipated varies for each site based on a variety of factors, including the total percent of existing electrical load that is offset. Positive cashflow is anticipated to begin between years 5 and 9 based on each site. Net positive savings at the end of the 20 year agreement is shown in Table 2 of the Council Agenda Report and is copied below for reference. Site Year 20 Cumulative Savings Fund Source CAD Parking $532,083 Parking Fund SLO Swim Center $572,412 General Fund – LRM Fire Station 1 $38,710 General Fund – LRM Transit Yard $1,590,066 Transit Fund Total $2,733,271 ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT ASSIGNMENT Page 4 4) Is the City confident the Cultural Arts District Parking Structure will be open by March 2026? The CADPS project is still tracking for opening by late February/early March 2026, weather permitting. The contractor has installed a majority of the primary steel for the photovoltaic system on the 5th floor of the structure and will soon be ready for panel installation. The solar contractor must complete installation of the solar system by April of 2026, which will not impact the opening of the CADPS.