Community Community Escondido

City OKs ‘no risk’ deal that would save almost $500,000

ESCONDIDO — Saving money is a good thing.

It is even better when it comes at no cost.

During their weekly meeting on Wednesday, the City Council unanimously approved a 10-year agreement with Green Charge Networks Energy Services LLC for installation and maintenance of battery-powered storage systems at seven sites.

The Santa Clara-based company, through negotiations, will receive approximately 70 percent of the savings, while the city will earn 30 percent. Over the 10-year period, projections show monetary savings for the city at $491,567.

Despite the savings, Mayor Sam Abed questioned GCN’s rate of return for investors and said he would like those numbers. Although the city agreed to the deal, it can still pull out without penalty before GCN begins installation.

Councilwoman Olga Diaz, though, said consistency is key in dealing with private businesses as the city does not request those rate returns from leasing cellphone towers.

Abed disagreed with the comparison, but voted in favor of the deal.

Many of Abed’s concerns, however, were eased by Maintenance Deputy Director of Public Works Rich O’Donnell’s presentation along with assurances from Public Works Director Edward Domingue. Both men agreed the deal comes at no risk to the city.

One of Abed’s pressing concerns was if the deal was right for the city and the 30 percent was the best option.

“These are good savings, but I don’t know if they are good enough,” Abed said. “I just want to make sure it’s a fair deal for the city.”

The city inquired with another business, but a 20-year agreement and lower net savings was the result. In addition, the city would have been required to carry the loans and pay for services even if no savings were earned.

A study by GCN, meanwhile, targeted 10 sites throughout the city using electric meters. Of the 10, seven are viable candidates for the new program.

They include City Hall, Police and Fire Headquarters, Main Library, Park Avenue Community Center, East Valley Community Center, Kit Carson Skate Park and the California Center of the Arts Escondido Central Plant.

O’Donnell estimated the savings for each site with the Police and Fire Headquarters leading the way at a 10-year total of $211,453. City Hall and East Valley Community Center are each more than $60,000, while Park Avenue Community Center ($49,985), Kit Carson Skate Park ($34,438), the library ($34,704) and CCAE ($24,552) round out the seven.

GCN proposes to reduce the demand charge at numerous sites using the battery system, which activate at peak demand (10 a.m. to 6 p.m.) and are recharged at night. Therefore, reducing the peak demand charge the city will save funds shared with the company.

In addition, the city will not owe GCN if there are no savings.

“We control the energy use through that period using the storage power and not the grid,” O’Donnell said.

GCN Director of Sales Sandy King broke down the plan saying a portion of the funds come from rebates, while investors cover the other costs. In addition, she said the company is committed to the city and creating the best deal possible for both sides.

“The utilities are really a partner by building a more energy charged system,” King added. “California is a very strong market because we are a very energy hungry state, but we also face some critical power delivery needs too.”

GCN, which was founded in 2009, is the country’s largest storage provider and has a strong presence in the county, she explained. The storage facilities bring value along with a commitment to cover all maintenance costs.

The company’s portfolio includes public entities such as the cities of Lancaster, Santa Clara and Redwood, Santa Barbara County, Ventura County Community College District, the Tulare School District and Cal State Fullerton. Private companies include 7 Eleven, Kaiser Permanente, UPS, Walgreens, Safeway and Kohl’s.

“We have an intelligent software that learns customers usage,” King said. “It’s understood across the board … it’s a nice value proposition, and the utilities understand that as well.”

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