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Vicinity Energy presents revised heating/cooling contracts; board requests edits and receives report
Summary
Vicinity Energy briefed the PBA on proposed contracts for steam and chilled-water service to the annex and criminal justice buildings, explaining capacity charges, a new water charge and a $24,000 annex credit; the board received the report and asked staff to return a revised contract this week.
Vicinity Energy representatives briefed the Public Building Authority on proposed contracts to provide chilled water and steam to the county’s annex and criminal justice buildings. Todd Lewis, a Vicinity representative, explained changes to pricing and contract terms and answered board questions; the board received the report and requested a revised contract.
"The cost of fuel is a pass through in these contracts," Todd Lewis said, describing how gas prices are fed into the billing formula. He told the board that usage is generally flat year to year and that fuel-price fluctuations drive most bill variation. Lewis said Vicinity also added a water charge to reflect rising water costs and that the combined changes amounted to less than a 10% increase in modeled costs.
Lewis said the service arrangement provides chilled water (the buildings do not have on-site chillers) and steam (condensed and returned to Vicinity) and described how capacity charges work. "It is the availability of chilled water and steam that is expected to be provided at any time...so we're being charged for that capacity," a county staff member explained while discussing termination/encumbrance language.
Contract details discussed included: a $24,000 credit in the annex contract spread over 24 months to reflect new load shifting into the ICB; a criminal-justice contract structured with an out at five years to align with plans for a new facility; and the parties' intent to include a fixed one-year capacity encumbrance in the termination language rather than an open-ended term. The contracts have been reviewed and Lewis said the only substantive review comments were to replace the term "public trust" with "government entity" and to clarify termination/encumbrance language. Lewis told the board the revised contracts incorporating those changes will be returned this week.
Board members asked for clarity on the effective length and termination mechanics of the criminal-justice contract; staff and Lewis said legal has differed on characterizing the term (5-year operational out vs. 10-year legal term) and that the reworked draft will attempt clearer language. The board also asked that the county's RDA review any contingency language tied to the new facility build-out.
A motion to receive the report was made and approved by voice vote. No contract was executed at the meeting; PBA staff will circulate a revised contract for review and final approval in a future action.
