Explanation
BACKGROUND: This legislation authorizes the Director of Public Utilities to negotiate a renewable energy purchase agreement and interconnection agreement for the Division of Power with Columbus Solar Park LLC, an affiliate of BQ Energy Development, LLC.; authorizes the Director of Finance to enter into license or lease agreements as necessary related to this interconnection agreement; authorizes the Director of Public Utilities to enter into a benefits sharing agreement with AEP Energy Partners, Inc. (AEPEP); and waives the competitive bidding provisions of Columbus City Code relating to award of contracts through the RFP process.
The Columbus Solar Park is a development by SWACO and BQ Energy on a 173-acre SWACO-owned property that once served as Franklin County’s sanitary landfill and is located between Jackson Pike and I-71 in Grove City. This project is expected to be completed in late 2022 and will connect the new solar array to the electric power grid through the City’s Division of Power. AEP Energy Partners (AEPEP) will be the initial off-taker of 100 percent of the output of the 50-MW solar park that BQ Energy Development LLC will build. After approximately three years of operation of the facility, the City will be the off-taker of 50 percent of the output. After approximately eight years of operation, the City will be the off-taker of 100 percent of the output. Purchase power agreements and interconnection agreements will be entered into to facilitate this development.
A benefits sharing agreement between the City and AEP Energy Partners (AEPEP) will outline the terms and conditions for the sharing of transmission benefits, capacity benefits, and ancillary services revenue, less any cost and benefit reductions, between the City and AEPEP. AEPEP’s Sharing Percentage shall be equal to ninety percent (90%) and City’s Sharing Percentage shall be equal to ten percent (10%).
The Department of Public Utilities seeks to waive the competitive bidding provisions of City Code relating to award of contracts to allow the Department to negotiate a renewable energy purchase agreement and interconnection agreement with Columbus Solar Park LLC, an affiliate of BQ Energy Development, LLC, and to negotiate a benefits sharing agreement with AEP Energy Partners (AEPEP), so the most beneficial purchase power price, capital costs, and other savings can be realized between the parties and for the benefit of its customers.
CONTRACT COMPLIANCE #:
Columbus Solar Park LLC, an affiliate of BQ Energy Development, LLC. | Tax ID#: 84-4618154 | Vendor CC#: 040120,
AEP Energy Partners, Inc., FID #77-0690681, DAX #010283, Expires November 27, 2020.
FISCAL IMPACT:
There is an expenditure of $1.00 associated with this ordinance to allow the Director of Public Utilities the authority to enter into a renewable energy purchase agreement, interconnection agreement and benefits sharing agreement. Ordinances will be submitted yearly as necessary to fund the agreements.
EMERGENCY DESIGNATION:
This ordinance is requested to be an emergency measure to allow negotiations to begin and be completed at the earliest possible date.
Title
To authorize the Director of Public Utilities to negotiate and enter into a renewable energy purchase agreement, interconnection agreement, and benefits sharing agreement for the Division of Power; to waive the competitive bidding provisions of Columbus City Code for those agreements; to authorize the Director of Finance to enter into license or lease agreements as necessary related to the interconnection agreement; to authorize the expenditure of $1.00 from the Electricity Operating Fund for each agreement; and to declare an emergency. (AMENDED BY ORDINANCE 3265-2022 PASSED 12/5/21) BA
Body
WHEREAS, the City of Columbus, Department of Public Utilities is committed to taking steps to mitigate and adapt to our community’s changing climate; and
WHEREAS, Mayor Ginther announced the City’s goal to reduce greenhouse gas emissions from municipal operations by 40% by the year 2030 from year 2005 baseline levels and to explore a 100% renewable energy portfolio for municipal operations; and
WHEREAS, renewable energy procurement from solar power installations at the Columbus Solar Park being developed by SWACO and Columbus Solar Park LLC, an affiliate of BQ Energy, will help to achieve this goal while also reducing greenhouse gas emissions, creating local public health benefits, and providing economic opportunity to the Columbus community; and
WHEREAS, it is in the best interest of the City to authorize the Director of Public Utilities to negotiate a renewable energy purchase agreement and interconnection agreement with Columbus Solar Park LLC, an affiliate of BQ Energy for terms of up to thirty years to support the development of the Columbus Solar Park; and
WHEREAS, it is in the best interest of the City to authorize the Director of Public Utilities to negotiate a benefits sharing agreements with AEP Energy Partners to support the development of the Columbus Solar Park; and
WHEREAS, it is necessary to waive the competitive bidding provisions of Columbus City Code relating to entering into the renewable energy purchase agreement, interconnection agreement, and benefits sharing agreement; and
WHEREAS, it is necessary to authorize the Director of Finance to enter into license or lease agreements as may be necessary related to the interconnection agreement; and
WHEREAS, an emergency exists in the usual daily operation of the Division of Power, of the Department of Public Utilities, in that it is immediately necessary to authorize the Director to negotiate and enter into agreements for the renewable energy purchase agreement, interconnection agreement, and benefits sharing agreement to complete negotiations at the earliest possible date, for the immediate preservation of the public health, peace, property, and safety, now, therefore:
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Director of Public Utilities is hereby authorized to negotiate and enter into a renewable energy purchase agreement and interconnection agreement with Columbus Solar Park LLC, an affiliate of BQ Energy, for the Division of Power, in the amount of one dollar ($1.00).
SECTION 2. That the Director of Public Utilities is hereby authorized to negotiate and enter into a benefits sharing agreements with AEP Energy Partners to support the development of the Columbus Solar Park.
SECTION 3. That this Council finds it is in the best interest of the City to waive, and does hereby waive, the competitive bidding provisions of Chapter 329 of the Columbus City Codes relating to the actions in Sections 1 and 2.
SECTION 4. That the Director of Finance is hereby authorized to negotiate and enter into license or leases agreements as necessary related to the interconnection agreement.
SECTION 5. That this ordinance does not require the Director of Public Utilities to execute a contract if the negotiation process does not produce pricing/terms and conditions that serve the best interest of the City.
SECTION 6. That the expenditure of $1.00, or so much thereof as may be needed, is hereby authorized in Fund 6300 Electricity Operating Fund, in object class 02 Supplies & Materials per the accounting code in the attachment to this ordinance.
SECTION 7. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after the passage if the Mayor neither approves nor vetoes the same.