State & Local Track, Number 906 Bill Curry, CPCM, Fellow General Services Director

2. Contracting for a Large Solar Energy Project State & Local Track, Number 906 Bill Curry, CPCM, Fellow General Services Director County of Butte, Oroville, California Tuesday, April 26th 2:45 – 3:45 p.m. NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

3. Overview • Energy Efficiency Background • Relaxed Contracting Rules for Energy Efficiency Systems • 2004 Solar Energy System • 2005 Solar Energy System • Recommendations • Questions NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

4. Energy Efficiency Background • 1995/1996 Upgrade HVAC*, Energy System Controls, Lighting Retrofits • 2003 Decision to Follow-Up 1995/1996 Effort • Evaluation of Proposals for 2004 Solar Energy System * Heating, Ventilation & Air Conditioning NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

5. Relaxed Contracting Rules for Energy Efficiency Systems • California Government Code §§ 4217.10 through 4217.18 “The provisions of this chapter shall be construed to provide the greatest possible flexibility to public agencies in structuring agreements entered into hereunder so that economic benefits may be maximized and financing and other costs associated with the design and construction of alternate energy projects may be minimized.” NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

6. 2004 Solar Energy SystemOpting for 100% Photovoltaic System • Proposals for Cogeneration Plants with Minimal Photovoltaics • Expanded Proposal • Visit to Facility with 100% Photovoltaic System • Maintenance & Environmental Factors NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

7. 2004 Solar Energy Project Proposal Evaluation • Compared Cogeneration/ Photovoltaic to 100% Photovoltaic System • Relied on Provisions of GC*§§ 4217.10 through 4217.18 • Lowest KW Cost to Date for Butte County Photovoltaic Systems * Government Code NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

8. 2004 Solar Energy ProjectFinancing • Total System Cost $8.4 Million • CPUC* Rebate $4.2 Million • CEC** Loan $3.2 Million • Butte County Investment Pool Loan $1 Million * California Public Utilities Commission ** California Energy Commission NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

9. 2004 Solar Energy Project Administration Building Array Along Department of Water Resources Canal NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

10. 2004 Solar Energy Project Administration Building Shaded Parking Array NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

11. 2004 Solar Energy Project West Jail Facility Array Adjacent to Highway 70 NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

12. 2004 Solar Energy Project Roof-Mounted East Jail Facility Array NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

13. 2004 Solar Energy Project Kiosk Located in Administration Building Atrium NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

14. 2004 Solar Energy Project Aerial View Showing all Four Arrays NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

15. 2004 Solar Energy ProjectAmerican Made Photovoltaic System • 6,360 Sharp 185-Watt Solar Panels Made in Memphis, Tennessee • Xantrex Inverters Made in California • Transformers Made in USA • Support Structures for Shaded Parking Fabricated in Butte County • Labor Pool Hiring from Butte County NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

16. 2004 Solar Energy Project Construction Management • Minimal Effort Required for Construction Management • Construction Required Approximately Eight Months • No Change Order to Increase Pricing • No Change Orders to Extend Schedule NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

17. 2005 Solar Energy ProjectRevised SGIP* Rules • Remove 50% Cap on Project Cost • Reduce 2004 $4.50 Per Watt Incentive to $3.50 Per Watt for Calendar Year 2005 • Reduce 2005 $3.50 Per Watt Incentive to $3.00 Per Watt for Calendar Year 2006 * Self Generation Incentive Program NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

18. 2005 Solar Energy ProjectProjected Costs • With Full & Open Competition Costs Per Watt for Ground-Mounted or Roof-Mounted Systems Should be $7.00/Watt • Shaded Parking Photovoltaic Arrays Will Likely Increase Cost to $8.50/Watt • Mixture of Ground-Mounted and/or Roof-Mounted Arrays With Shaded Parking May Make Some Shaded Parking Affordable • 2005 Rebate for Ground-Mounted & Roof-Mounted Arrays is Approximately 50% NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

19. Recommendations • Pursue the Acquisition of Solar Energy Systems for Cost Savings & Environmental Reasons • Use Full and Open Competition • Select Ground-Mounted and/or Roof-Mounted Arrays • Make Shaded Parking Affordable by Combining it with Ground-Mounted and/or Roof-Mounted Arrays • Use an RFP to Obtain Proposals Rather than and IFB to Obtain Bids • Be Prepared to Provide Extensive Information to Prospective Contractors NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

20. RecommendationsCost Savings • The Cost Savings for 2004 One Megawatt System is $317,000 per Year • Based on County’s Cost of $4.2 Million, Payback is 13.25 Years with Constant Energy Costs • If the System Life is 40 Years, Net Cost Savings After Repayment of Loans is $8.5 Million NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

21. RecommendationsEnvironmental Considerations A One Megawatt System • Avoids the Emission of 2,567,754 Pounds of Carbon Dioxide Annually as Compared to a Natural Gas Fueled Electricity Plant • Avoids the Emission of Carbon Dioxide Equivalent to 362 Acres of Trees • Avoids Emission of Significant Amounts of Sulfur Dioxide and Nitrogen Oxides • Can Power 400 Average Homes NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

22. RecommendationsUse Full and Open Competition Full & Open Competition Between Similar 100% Photovoltaic Systems Should Result in the Opportunity to Select a Technically Superior Solar Energy System at a Competitive Price. NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

23. RecommendationsSelect Ground-Mounted or Roof-Mounted Arrays • Ground-Mounted or Roof-Mounted Arrays Cost About $7.00 per Watt with Full & Open Competition • Shaded Parking Arrays Cost Approximately $8.50 per Watt • Shaded Parking is More Affordable if it is Mixed with Ground-Mounted & Roof-Mounted Arrays NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

24. RecommendationsUse an RFP Rather than an IFB • Unless You Have Employees Who are Photovoltaic Experts, Leave the Design to the Prospective Contractors • Since You Will Not Have Detailed Specifications, Contractor Selection will be Based on Price & Other Factors • Negotiation of Price & Other Factors will Likely be Required • Construction Management will Likely be Simplified NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

25. RecommendationsBe Prepared to Provide Extensive Information • Identify Facilities (Site Map) that will Likely Benefit from Solar Power & Where Space is Available for Solar Arrays • Electrical Utility Bills for One Year • Roof & Electrical Plans • Individual Pre-Proposal Meetings • Sixty Days to Prepare Proposals NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”

26. QUESTIONS? NCMA World Congress 2005 “Prime Time: Contract Management at the Core of the Enterprise”