HomeMy WebLinkAbout10/18/2000 - STAFF REPORTS (4) DATE: October 18, 2000
TO: City Council
FROM: Grants and Government Affairs Manager and Director of Facilities
RESOLUTION CERTIFYING POSSIBLE CALIFORNIA ENERGY COMMISSION LOAN
RECOMMENDATION:
That City Council approve a Resolution certifying a possible loan for up to $300,000 from the
California Energy Commission (CEC), via the Low- Interest "Energy Conservation Assistance
Account Loan Program". The terms of the loan are an annual interest rate of 5.4%, repayable for
up to eleven years. The CEC loan would be used to provide the City's matching funds for the
installation of a $650,000 Solar Absorption System at the existing Municipal Cogeneration Plant
adjacent to City Hall. The funding of the loan is "contingent" upon the City's successful approval
of applications to both the Environmental Protection Agency (EPA for $200,000) and the South
Coast Air Quality Management District (SCAQMD for $150,000). There is a June 30, 2001
deadline for the City to exercise the CEC loan, but the CEC requests a certifying Resolution at this
time to proceed with the State budgeting process. City Project No. 99-17.
BACKGROUND:
The existing natural gas-fired Cogeneration Plant at City Hall was built in 1985 and provides
energy and cooling forthe entire Municipal Complex(including City Hall,Airport, Fire Station No.2,
Police Department, and Riverside County Courthouse and Administrative Offices). The recent
Airport Terminal Expansion, however, has placed a significant additional load on the Muni
Cogeneration Plant(250 Tons Daily)and we now must purchase power from SCE as well as pay
an annual SCE surcharge ($60,000) for the "increased" power demands for the Airport facility.
In 1999 Sun Utility Network , Inc. and Bergquam Energy Co. proposed to the City that a Solar
Absorption System could be retrofitted to the existing Cogeneration Plant located behind City Hall.
The two energy consultants proposed that a solar array and 160-ton chiller and connector system
would be installed in the unused area north of the plant and when put on line would generate
about 222,000 tons of additional annual cooling to the facility.The consultants estimate an annual
electrical savings of 421,000 Kilowatt Hours of energy, with savings of$50,000 per year, plus an
additional savings of $60,000 in SCE surcharges annually for combined savings of $110,000
annually for the City. Proposed deregulation in year 2002 may remove the $60,000 in SCE
surcharges, so the ongoing energy savings after that date could remain $50,000 per year. The
proposed Solar Absorption System has a twenty (20) year ormore projected life and an annual
maintenance cost of about $6,000 according to preliminary estimates.
The engineering,design and installation is estimated to cost up to$650,000 forthe proposed Solar
Absorption System, however, $350,000 of the costs would be covered by the proposed EPA
(federal)and SCAQMD(state)Grants.The balance of costs could come from a 5.4%Low-Interest
Loan from the CEC for up to $300,000 that would only be exercised upon success with the two
outside funded grants. The CEC will require notification from the City prior to June 30, 2001 to
exercise the loan,with the City's "contingency' that the two grants be received prior to that date
to enable the City to proceed with the CEC Energy Conservation Assistance Account Program
loan. The debt service on an 11-year loan would be about $37,000 a year, but the projected
savings would be '$50,000 to $110,000 a year for the new Solar Absorption System, so the City
r
Council Report(10-18-00)-CEC Resolution-Page 2
would benefit from reduced energy costs that exceed the debt service. (This would occur with no
City General Fund expenditures).After the retirement of the CEC loan debt in 11 years (or less),
the City would then take full benefit of the entire$50,000 or more in energy savings annually.This
proposed Solar Absorption System would be less expensive to maintain than a conventional
cogeneration expansion due to the nature of the "free energy provided from the sun" in
comparison to purchasing additional natural gas to power the cogeneration generators. The two
proposed EPA&SCAQMD grants are possible due to the"sustainable" energy benefits that can
be duplicated throughout California and the USA.
The CEC Low-Interest Loan is being applied for in advance of the EPA and SCAQMD Grant
deadlines to increase the successfulness of the two grants based on the stronger position
generated by receiving match funding from three different sources. The EPA Grant is entitled the
"US EPA Sustainable Development Challenge Grant Program".The maximum eligible per project
is$200,000 and the deadline to apply forthe EPA funds is October 31, 2000,which also therefore
prompts the efforts to obtain Council certification of the CEC Loan Resolution at this time.
The South Coast Air Quality Management District has identified $75,000 as support for the
proposed Solar Absorption Project in Palm Springs and are considering doubling that figure to
$150,000 if the City is successful with the Environmental Protection Agency grant. The SCAQMD
is interested in this particular project because it would be the first such Solar Absorption project
in Southern California,since the only other Solar Absorption sites(two)are in Northern California.
It has therefor been recommended that the City apply for the California Energy Commission
Energy Conservation Assistance Account Loan as a means to provide low-interest match funding,
but primarily to greatly increase the margin of success with the EPA and SCAQMD grants. The
CEC staff concurred ,with their knowledge of the EPA process,thatthe City's chances forsuccess
with EPA Grants would be enhanced by the proposed match-funding process.
It should be noted that the CEC loan is "contingent" upon full success with the two grants from
EPA and SCAQMD and there will be no loan costs to the City unless the City proceeds with the
CEC loan.The June 30, 2001 EPA deadline to proceed provides ample time for the City to obtain
grant funding approval and to have independent experts further validate the projected costs and
energy calculations and benefits of the proposed Solar Absorption Project. California Energy
Commission engineers will also validate project costs and energy calculations during this process.
Before the grants and loan are accepted, staff will verify that the cost estimates and energy
benefits are reasonable and acceptable to the City.
APPROVED: r
ROBERT L. MOHLER SCOT MIKESELL
Grants and Government Affairs Manager / Director of Facilities
APPRO ED: ��/ ��s
City Manage4 REVIEWED BY DEFT.OF FINANCE
Attachments:
1. C.E.C. Resolution and Proposed (Cogeneration) Solar Absorption Project Site Map
2. Application/ Letter to California Energy Commission dated 8/18/00 (13 pgs.)
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August 18, 2000
Mr. Daryl Mills
Nonresidential Buildings Office
California Energy Commission (CEC)
1516 9`h Street, MS-26
Sacramento, Ca. 95814
Subject: Application for 5.4 % Energy Efficient Financing
SOLAR ABSORPTION AIR CONDITIONING- Municipal Cogeneration Plant
Dear Mr. Mills:
Enclosed is an application for Energy Commission Financing for the engineering, design and
installation of a 100-ton solar driven absorption chiller at the Municipal Cogeneration Plant in
the City of Palm Springs. The Cogeneration Plant was built in 1985 and provides cogeneration
power to separate facilities at City Hall, Police Department, Fire Department, County Building
and the Palm Springs International Airport in the Civic Center area.
The proposed solar driven facility would provide about 222,000 tons of additional annual
cooling, with a projected electrical savings of about 421,000 Kilowatt Hours annually. The
consultant also estimates energy savings of over $50,000 per year and SCE surcharge savings of
about $60,000 (Total annual savings of$110,000). The technology is already proven as similar
smaller systems have been naming successfully in Sacramento for about 10 to 15 years without
problems.
The proposed facility would be the first in Southern California and the largest in California. The
sustainable energy benefits are great as the proposed facility would exhibit to the govermnent
and private sectors that the energy and financial benefits have a very quick payback period and
the solar aspects would further the "Clean Cities" concept of pollution free energy.
As I discussed with you on the phone today, the requested (5.4%Energy Commission Financing)
is contingent on Grants with EPA and SCAQMD, both in the application stage. If you have any
questions, please contact me at(760) 323-8250 or consultant Jim Bergquam at (916) 383-9425.
Post Office Box 2743 0 Palm Springs, California 92263-2743 "
Sincerely,
Robert L. Mohler
Grants and Government Affairs Manager
Attacluuents: Original Application (11 pgs.)
cc: David H. Ready, City Manager
Al Smoot, Assistant City Manager-Special Projects
Scott Mikesell, Director of Facilities
Jan Anderson, Facilities Manager
Jim Bergquam, Bergquam Energy
H\CHCLoanApplication-SolarCogen 8-I9-00.D.Mills Itr.wpd
APPLICATION FOR ENERGY COMMISSION FINANCING
Applicant City of Palm Springs
Mailing Address PO BOX 2743 City Palm Springs Zip 92263
Street Address 3200 E. Tahquitz Canyon Way City Patin Springs Zip 92263
To the best of my knowledge and belief,data in this application are correct and complete.
Robert L. Mohler
Contact Person Signature
Title Grants and Government Affairs Manager Date August 21, 2000
Phone Number (760) 323-8250 Fax Number (760) 322-8360 E-Mail BobMAci.palm-springs.ca.us .
Total project costs(include all installation costs) $650,000
Amount requested from the Energy Commission $400,000
Tentative project start date Spring 2001
Tentative project completion date Summer 2001
Please include in yourapplication package:
1. A resolution from your governing board(see sample enclosed)
2. A feasibility study foryour project(see below)
3. IRS Letter of Determination(private nonprofit organizations,only)
4. A copy of most recent financial statement audit covering a
12-month period(private nonprofit organizations,only)
A Feasibility Study foryour Project must include:
1. A description of your energy project.
2 An estimate of annual savings(dollars and kilowatt-hours ortherms)
and include all assumptions used in your calculations.
3. A proposed budget detailing project costs.
4. For all power generation projects,describe the schedule and status of
any air quality permit requirements/applications.
5. Adiscussion of any costs associated with asbestos removal or
demolition and removal of existing equipment required before the
energy project can be installed.
SOLAR ABSORPTION AIR CONDITIONING
FOR THE
PALM SPRINGS MUNICIPAL COMPLEX
Feasibility Study
Prepared by
Jim Bergquam, Ph.D., P.E.
CA Licensed Professional Engineer M23563
CA Licensed General Contractor 9413320
For a
California Energy Commission
Energy Efficiency Financing Application
August 21, 2000
At *7
Description of Energy Project
This project is concerned with the engineering, design, and installation of a
100-ton solar driven absorption chiller at the Municipal Cogeneration plant
in Palm Springs, CA.
The Cogeneration Plant consists of two natural gas fired, 650 kW engines
and electrical generators. This combination produces a rated electrical
output of 1.3MW. The waste heat from the engines is used to drive a single-
effect 360 ton absorption chiller. When the electrical load of the Municipal
Complex is less than the output from the plant, the City sells electricity to
Southern California Edison. Conversely, when the cooling from the plant
does not satisfy the requirements of the Municipal Complex, the city has to
operate compression chillers with power from the grid.
There are several unique features about the way that the plant is designed to
use waste heat from the engines to drive the absorption chiller. The plant
and chiller run continuously. However, since the cooling load drops off at
night, it is necessary to have a way to store the cooling effect. This is done
by chilling a 400,000 gallon Thermal Energy Storage (TES) tank during the
night and on weekends, when the demand is low, and then using the chilled
water during the day to meet the cooling load. As a result of a recently
completed Airport expansion, the peak-cooling load increased from 850 tons
to 1100 tons.
Typical operation involves chilling the TES tank to about 40°F on Monday
morning. The chilled water then provides the entire air conditioning load.
However, during the hottest part of the year, the tank temperature increases
daily until, at the end of the week, there is not enough capacity to meet the
load. It would be very expensive, and probably unrealistic, to expand the
cogeneration plant.
This is where a 100-ton solar HVAC system could make a significant
contribution. The TES tank is located underground on the north side of the
cogeneration building. The building does not have adequate roof space for
the solar array. However, the collectors could be ground-mounted above the
TES tank. A fence or block wall would be built around the array for
aesthetics and security. The solar-driven chiller would be connected to the
2 111900 .
TES tank and used to assist in chilling the tank. In this way, the solar
system would supplement the existing absorption chiller.
A 100-ton solar driven absorption chiller, operating 8 hours per day with an
array of tube type solar collectors, will cool the 400,000-gallon tank almost
3°F per day. This would be enough to meet most of the current cooling load.
-- .
SOLAR HVAC SYSTEM
The main components of the solar HVAC system are:
• An array of tube type solar collectors. Array sizes of 5,500ft', 7'000ft2,
and 8,500ft2 have been evaluated;
• A 100-ton single effect, water fired absorption chiller to operate on hot
water from the collector array;
• An insulated, high temperature storage-tank. Storage sizes of 5,500 gal.,
7,OOOgal., and 8,500gal. have been evaluated;
• Pumps, Valves, heat exchangers and balance of plant as specified during
final design;
• Instrumentation and data acquisition equipment to monitor the operation
and determine the performances of the systems. The intention is to use
instrumentation that is compatible with the City's existing data
acquisition system.
This will be an installation where the collectors are ground-mounted. The
waste heat from the chiller will be dissipated, using the existing 1,000-ton
cooling-tower.
It is expected hat the financing for this project will involve a number of
organizations and companies. This may include the EPA, the California
Energy Commission, the South Coast Air Quality Management District, and
the City of Palms Springs.
PRELIMINARY DESIGN and ECONOMIC ANALYSIS
The rest of this report contains figures and graphs that illustrate the proposed
solar absorption air conditioning system. Computer models, with solar
radiation and temperature data for Palm Springs, have been used to evaluate
three different systems. The recommended system has a 7,000 ft2 collector
array and a 7,000 gallon insulated storage tank.
3 /�
The graphical results show the: y
• Useful heat output from the collector array, Q,,, and the cooling load
supplied by the absorption chiller, L., to TES;
• Chiller output and the storage tank temperature.
The economic analysis lists the:
• Total installed cost of the system;
• Simple payback;
• Potential financing sources
The recommendation is to proceed with the engineering analysis and final
design of a 7,000ft2 and 7,000ga1. solar absorption air conditioning system.
The CEC Energy Efficiency Financing funds are to be used for this system.
The economic analysis on the next page is based on an electricity rate of
$0.12/kVvH. At the present time, the City of Palm Springs is paying excess
capacity and standby charges that exceed $15,000 per month for June, July,
August and September. The solar HVAC system is sized to eliminate most
of these charges. This will result in additional savings of$60,000/year.
4
100 Ton Solar Absorption Economics
Palm Springs, CA
Budget
Collectors $245,000
100 Ton Chiller $130,000
Storage $25,000
Pumps $25,000
Labor $50,000
Engineering design profit & overhead $100,000
Total - Materials & Labor $575,000
Contingency $75,000
Total Project Cost $650,000
Potential Funding
CEC Energy Efficiency Financing $400,000
EPA, SCAQMD & City of Palm Springs $250,000
Anticipated Savings and Payback
Yearly Cooling (Ton -hr) 221,695
Energy Value (kW/Ton) 1.9
Yearly Electrical Savings (kW-hr) 421,221
Electrical Energy Rate $0 12
Yearly Energy Savings $50,546
Yearly Surcharge Savings $60,000
Total Yearly Savings $110,546
Simple Payback on Total Project Cost 5.4
(Years)
Simple Payback on CEC Funds (Years) 3.2
IJ411
S stem Specifications
Location Palm Spri s, CA
Collector Array Tube Type
Collector Area 7000ft2
Collector Tilt 10°
Collector Max Eff. 60%
Collector Daily Eff. 45%
Collector Max Output 1 ,344 mBtu
Chiller Type Single Effect Absorption Chiller
Nominal Chiller Size 100 Ton
Storage Medium Water
Storage Size 7,000 Gallons
Storage Energy 263 Ton-hrs
System Max Temp 240OF
System Min Temp 1850F
System Losses 10%
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Solar Absorption System Performance
(July 1990)
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Collector Area: 7000ft2
Storage Size : 7000gal.
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RESOLUTION NO.
OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CALIFORNIA, CERTIFYING A POSSIBLE LOW INTEREST LOAN FROM
THE CALIFORNIA ENERGY COMMISSION (CEC) FOR UP TO$300,000
AT A 5.4% INTEREST RATE FOR UP TO ELEVEN (11)YEARS VIA THE
CEC'S "ENERGY CONSERVATION ASSISTANCE ACCOUNT LOAN
PROGRAM".THE LOAN WOULD ASSIST WITH THE COSTS TO DESIGN
AND CONSTRUCT A "SOLAR ABSORPTION SYSTEM INSTALLATION
AT THE CITY'S MUNICIPAL COGENERATION PLANT LOCATED
ADJACENT TO PALM SPRINGS CITY HALL. CITY PROJECT NO. 99-17
WHEREAS, the California Energy Commission (CEC) provides loans to schools, hospitals, local
governments, special districts and public care institutions to finance energy efficiency improvements under
the CEC's "Energy Conservation Assistance Account Loan Program"; and
WHEREAS, the City of Palm Springs is experiencing substantially increased energy, cooling and heating
costs at the Civic Center facilities, especially due to the recent Terminal Building Expansion at the Palm
Springs International Airport, which is heated and cooled primarily by the Municipal Cogeneration Plant
located adjacent to the Palm Springs City Hall; and
WHEREAS, the City of Palm Springs desires to install a "Solar Absorption System" at the City's Municipal
Cogeneration Plant located adjacent to City Hall in Palm Springs to provide the following:
SOLAR ABSORPTION COLLECTOR PANELS
160 TON CHILLER
RECIRCULATION PUMP SYSTEM
Which will be designed to produce the following results:
PROVIDE 222,000 TONS OF ADDITIONAL ANNUAL COOLING
GENERATE 421,000 KILOWATT HOURS OF ANNUAL ELECTRICAL SAVINGS
COST SAVI NGS OF$110,000 ANNUALLY($50,000 ELECTRICAL,$60,000 IN SURCHARGES);and
WHEREAS, the City of Palm Springs is in the process of applying for at least two grants: 1.An Environmental
Protection Agency (EPA) Federal Grant under the "US EPA Sustainable Development Challenge Grant
Program" in the amount of$200.000 and 2.A South Coast Air Quality Management District(SCAQMD)State
Funded Grant for up to $150,000 to assist in the installation of the proposed Solar Absorption System;
(Conditional Requirement: That both grants must be successful to proceed with the CEC Loan).
NOW THEREFORE BE IT RESOLVED that the City Council of the City of Palm Springs authorizes City staff
to apply for an energy efficiency loan from the California Energy Commission to implement energy efficiency
measures.
BE IT ALSO RESOLVED, that if recommended for funding by the California Energy Commission, the City
Council authorizes the City of Palm Springs to accept a loan for up to$300,000. (June 30, 2001 is deadline
to exercise possible CEC loan).
BE IT ALSO RESOLVED, that the amount of the loan will be paid in full, plus interest, under the terms and
conditions of the Loan Agreement and Promissory Note of the California Energy Commission.
BE IT FURTHER RESOLVED, that City Manager David H. Ready is hereby authorized and empowered to
execute in the name of the City of Palm Springs all necessary documents to implement and carry out the
purpose of this resolution, and to undertake all actions necessary to complete the energy efficiency project.
I
CEC Loan Resolution(Cogeneration Solar Absorption System)-Page 2
Adopted this day of 2000.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
by
City Clerk City Manager
REVIEWED &APPROVED AS TO FORM
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