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Council authorizes long-term agreements for resource adequacy and long-duration storage; costs capped at about $25M/year
Summary
The council authorized city staff to execute long-term agreements with Middle River Power (MRP) Pacifica Marketing for a combined-cycle facility and a co-located long-duration storage battery. Staff said the contracts will start deliveries in 2027, reduce emissions and add reliability; the annual cost is capped at just over $25 million.
The San Jose City Council on April 8 authorized the director of the Energy Department to negotiate and execute long-term agreements to secure resource adequacy, mid-term reliability and energy from a co-located long-duration storage facility and an existing combined-cycle plant, staff said.
Assistant Energy Director Zach Scribe and Deputy Director Paul Anamorato presented the recommendation. "As we've constructed our portfolio, it's been important to take a diversified approach on a number of fronts," Scribe said, adding the proposed resources are geographically nearby and fit the city's portfolio modeling.
Nut graf: Staff described a package of fixed-price, long-term products that start delivering in 2027, extend 12 years for the combined-cycle facility and 14 years for the long-duration storage, and carry an annual cost cap of just over $25 million (lifetime not to exceed roughly $308 million), representing roughly 5 percent of the city's power supply budget.
Paul Anamorato said the products will meet state resource adequacy requirements and contribute to the state's midterm reliability mandates because long-duration storage is a required technology type. "The products will begin delivery in 2027 and last for 12 years for the combined cycle facility and 14 years from the long duration storage facility," Anamorato said. He also said because the battery will leverage existing infrastructure it can come online faster than many greenfield projects and will displace some operation of the combined-cycle unit, lowering emissions by roughly 12 percent; staff characterized that reduction as equivalent to removing approximately 50,000 gasoline-powered cars from the road for one year.
Staff estimated the annual cost will not exceed just over $25 million and the lifetime obligation will not exceed about $308 million; the price was described as fixed for the term of the agreements. Middle River Power (the developer) was described as having experience with hybridizing batteries and gas plants and having been recently acquired by Partners Group.
Council approved the staff recommendation by unanimous vote with one councilmember absent.
Ending: Staff will finalize agreements consistent with the council authorization and continue to coordinate with procurement and legal to execute the fixed-price contracts; details will be reported back as required.
