TO: Mayor Richard C. Irvin
FROM: Ian Wade, Capital Projects Manager
DATE: October 23, 2018
SUBJECT:
A Resolution authorizing the execution of a Project Development Agreement with Ameresco, Inc., 111 Speen Street, Suite 410, Framingham, MA, 01710 for the development and construction of one or more solar photovoltaic generation facilities.
PURPOSE:
To enter into a Project Development Agreement for the installation of solar photovoltaic generation facilities at City-owned properties.
BACKGROUND:
In an effort to implement clean energy initiatives and take advantage of state renewable energy credit (REC’s) programs, the City issued a Request for Proposals to provide site evaluation, design and construction of one or more solar photovoltaic generation facilities (commonly known as “solar farms”) on City-owned properties.
Following a review of qualifications and proposals submitted by seven firms, the City and the City’s airport consultant CMT, selected Ameresco, Inc. based on their well stated understanding of the project and necessary financials, extensive experience working on very similar projects (including at landfills and airports (including Rockford International Airport)), and thoroughness of response to the specific items requested in the City’s RFP.
The selection resulted in the authorization of Ameresco to initiate an evaluation of City-owned parcels (generally larger than 2 acres) to be leased to Ameresco and host these facilities. This evaluation was performed at no cost to the City and confirmed that the Aurora Municipal Airport and the landfill located at the northeast corner of Sullivan Road and Illinois Route 25 are feasible locations. Now that the proposed sites have been identified, Ameresco plans to, upon execution of the subject Project Development Agreement (Exhibit A), initiate the remaining services necessary to secure renewable energy credits, design, and eventually construct and manage these solar farms at no cost to the City.
Ameresco will then recoup the cost of this investment by selling the power generated by these solar farms directly back to the City at a reduced rate (compared to the rates currently paid by the City to ComEd and/or Constellation). The terms of this energy purchase will be established through the execution of a Power Purchase Agreement or “PPA”, which will include a term of 20 years and is anticipated to result in a total cost savings to the City of approximately $1M (including land lease revenue).
To date Ameresco has invested a considerable amount of good faith capital to complete the site evaluations. Now that it has been confirmed that the two sites mentioned above are feasible for the construction of solar farms, Ameresco is asking the City to sign this Project Development Agreement which includes the earmarking of several existing City electrical accounts (currently supplied by ComEd and/or Constellation) to be dedicated to receiving power from Ameresco. While this dedication, as well as the execution of the Project Development Agreement as a whole, will result in no cost to or financial commitment by the City, it will ensure that these accounts will be available to purchase the power generated by the solar farms and will not be included in any other programs the City may enter into with other companies for the purchase of power (such as City-wide aggregation). Further, the commitment of these accounts shall only continue through the “option period” of 18 months, which is the anticipated time from the date of execution of this agreement through the development and execution of the PPA.
To reiterate, under this Project Development Agreement, the City will not be required to reimburse Ameresco in any manner. This agreement simply renders the accounts identified to purchase the power generated by the solar farms as ineligible for reassignment and/or aggregation for the 18 months it will take for Ameresco to finalize the PPA.
This appears to be a win-win for the City, as the parcels proposed are not otherwise usable by the City and will generate continuous revenue through reduced energy purchase rates. Additionally, we join other communities nationwide in initiating green energy initiatives.
DISCUSSION:
Proposals for the solar photovoltaic generation facilities were received from seven contractors (Exhibit B). The selected respondent was Ameresco, Inc., 111 Speen Street, Suite 410, Framingham, MA, 01710. The execution of this Project Development Agreement does not obligate the City to reimburse Ameresco in any manner.
IMPACT STATEMENT:
To ensure the City is able to purchase the power generated by the proposed solar farms, this agreement renders the existing electrical accounts identified to purchase the power as ineligible for reassignment and/or aggregation for the 18 months necessary for Ameresco to finalize the PPA.
RECOMMENDATIONS:
Please forward this resolution to the Finance Committee for their review and recommendation for approval.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A resolution to enter into a Project Development Agreement with Ameresco, Inc., 111 Speen Street, Suite 410, Framingham, MA, 01710 for the development and construction of one or more Solar Photovoltaic Generation Facilities.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, Seven proposals to Identify, Plan, Manage, Design, Construct one or more Solar Photovoltaic Generation Facilities were received (Exhibit A); and
WHEREAS, Ameresco, Inc., 111 Speen Street, Suite 410, Framingham, MA, 01710 was selected; and
WHEREAS, funding is not required unless the Project Development Agreement is breached by the City; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the Director of Purchasing is authorized to enter into a Project Development Agreement with Ameresco, Inc., 111 Speen Street, Suite 410, Framingham, MA, 01710 for the development and construction of one or more Solar Photovoltaic Generation Facilities.