Hanford council authorizes $60 million wastewater energy project, contingent on Prop 218 study

The Hanford City Council on May 19 authorized the city manager to execute a contract amendment with Aptera Energy Services for a combined solar photovoltaic and wastewater treatment facility energy-conservation project with a contract amount of $59,987,749 and directed staff to pursue a Prop 218 wastewater-rate study needed to support funding.

Council debated the item during a long study-session presentation by utilities staff and members of the Aptera/Alterra design-build team. Frank Centeno, the city's utilities engineering director, told the council the package includes six energy conservation measures and a wastewater facility rebuild that together would reduce the plant's electricity consumption from about 3.7 billion kilowatt-hours to roughly 1.2 billion kilowatt-hours annually; he said the solar portion already built at the site will produce about 1.3 million kWh per year. "The project final project cost is $59,987,749," Centeno said in the presentation.

Why it matters: City staff told council the project would cut energy bills at the wastewater plant by more than half and produce net savings over the life of the measures. Staff estimated the program would produce approximately $42 million in net savings over 35 years and argued the work will position the plant for future regulatory needs such as nitrogen removal.

What the contract covers: The scope described by staff includes construction of a new oxidation ditch, two new clarifiers, decommissioning an older trickling-filter facility and multiple equipment and pump retrofits. The price shown to council bundles energy-conservation measures and plant upgrades; staff said some solar work was completed under an earlier phase.

Key contract terms and project risk: Staff emphasized two contract provisions that shaped negotiations: an owner-controlled contingency of $2.5 million (transferred from the contractor's contingency and limited to specific uses such as design-development changes and pre-notice-to-proceed cost escalation) and a liquidated-damages structure capped at roughly $3.3 million with a daily rate of about $4,600 to address extended delays. Centeno explained the contingency was negotiated to reduce the base price and to limit what the contingency may be spent on.

Short-term actions and financing: Council authorized a limited notice to proceed for engineering to lock prices on long-lead items pending the Prop 218 rate study. Staff said the design period would run about nine months followed by a roughly two-year construction window. The city expects to adopt rate adjustments after a Prop 218 process this summer and then pursue bond financing to fund the work; staff estimated the amount to be financed near $68 million once contingencies, interest and related costs were included.

Team qualifications: Aptera/Alterra and their subcontractors (Ovivo as equipment provider, Clark Brothers as contractor and PACE/Corolla for engineering and owner's-rep services) reviewed their experience and past phases delivered for the city. The design-build team stressed the procurement approach reduced schedule risk and produced a lower per-million-gallon cost in comparison slides shown to the council.

Council questions and public accountability: Council members pressed on operations and monitoring, renewable-energy-credit treatment for the solar portion and long-term maintenance. Jason Rodriguez, the city's wastewater manager, said staff will oversee the facility and confirmed the team proposed a 20-year maintenance program. Rodriguez also said the new facility would reduce hazardous gaseous chlorine use by switching to sodium hypochlorite for disinfection, lowering a safety and liability exposure at the plant.

Vote and next steps: Following discussion, a council member moved to approve the contract amendment, authorize a limited notice to proceed for engineering, allow up to $2,000,000 in additional appropriations tied to the amendment and direct staff to return for a Prop 218 rate-fee study. The motion received a second; staff and the contractor team reacted positively on the dais. The formal vote tally for the motion was not read aloud in the study session transcript; staff celebrated the outcome and are proceeding to schedule the Prop 218 process and subsequent financing work.

Votes at a glance: the meeting also recorded several other formal actions: the council approved the FY 2026-27 CDBG annual action plan; adopted the 2024'2032 housing element (to be submitted to HCD for certification); approved the consent calendar (items A—rom the agenda) and a Centennial Drive ATP grant submittal; item L (an airport fuel project amendment) passed with a 4-0-1 vote (one abstention); four landscape-assessment ballot measures were tallied that evening and three failed to pass while one (Portofino) will be re-balloted because of a typographical error on the mailed ballot.

What to watch: Staff will return to council to run the Prop 218 rate process (staff indicated a June initiation and an August adoption target), and the city will pursue bonding once rate adoption and other funding steps are complete. Council and staff said they will also brief the community on the timeline and on opportunities for public input during the Prop 218 process.