Request for Committee Action

In October of 2017, the City Council approved a resolution requiring that all the electricity used in the City's municipal operations be 100% renewable electricity by the end of 2022 and that 100% of all electricity used by the community be renewably generated by 2030. Since then, the City has been participating in Xcel Energy's Renewable*Connect program which guarantees that the subscribed electricity is renewably generated, and the Renewable Energy Credits are assigned to the City. As of today, 68% of the electricity consumed by the City is being purchased through this program, at an extra cost of $500,000 annually in addition to regular electric charges (representing a 6% cost premium). To reduce this extra cost, Property Services released a Request for Information (RFI) in September of 2019 requesting developers to submit concepts of how the City could find a different renewable resource at less cost. Sixteen responses with numerous concepts were received, and a review committee consisting of staff from Property Services, the Sustainability Division, Councilmember aides, and the Mayor’s office used the ideas to develop two Request for Proposals (RFP) for the 2023 and beyond renewable electric resource:

1. An RFP requesting 90% of the City’s municipal operations needs to be met by a large generation source located outside the City limits.
2. An RFP requesting 10% of the City’s municipal operations needs to be met by one or more generation sources located within City limits.

This RCA is only going to address the within city limits proposals. The RFP laid out the following City objectives in which each of the proposals were reviewed against:

1. Additionality – A new renewable energy development that would place resources onto the electric grid in excess of the Minnesota state mandated Renewable Portfolio Standard.
2. Cost – Renewable electricity that can be purchased at a price below the premium cost of the Xcel Energy Renewable*Connect program and hopefully at a price that is cost neutral when compared the Xcel Energy retail price of electricity.
3. Length of contract – The City is willing to enter into a contract for a period of five to twenty years.
4. Job Creation – The City will give preference to developers who use local labor to the maximum extent possible in the planning, construction, and operation of new resources.
5. Prevailing Wage – All labor for the construction of the resource should be at or above the prevailing wage.
6. Minority and Women business and labor participation – Responses where the project could meet set percentage goals for the Developer to meet on the overall project and on construction labor with the goal of advancing diversity in ownership and workforce. These goals will be set once the total project construction cost is known.
7. Pollinator Habitat – Developers must plant pollinator and native habitat to maximum extent possible in support of resolution 2015R-357

A total of seven proposals were received for the RFP requesting 8 million annual kWh from renewable resources located inside the City limits, ranging from outright purchase of solar arrays on City buildings, REC contracts, and Power Purchase Agreements (PPA) for electricity generated by solar arrays located on City owned buildings. After reviewing the proposals with the Finance Department, the decision was made to not pursue outright ownership of arrays which would require an upfront capital expenditure by the City when there were PPA proposals that would save money for the City and require no City capital expenditures. After careful review of the three PPA proposals, the proposal from Sundial Solar was selected to best meet the city objectives. This PPA will place arrays on up to 35 facilities for a total of 5.1 million annual kWh at a cost of $0.105/kWh. At this price, the arrays would save the City $34,000 - $70,000 annually in electricity costs over 20 years. 

The City has also expressed its interest in local generation, local job creation, the provision of prevailing wage for project workers, and to include Small and Underutilized Business Participation (SUBP). As a Twin Cities based company, Sundial Energy shares these goals. In addition to utilizing local labor, our entire operation is based in St. Louis Park, MN, so that project management, oversite, and all revenue proceeds also stay in the local area. Sundial’s proposal will:

• Generate all electricity within city limits
• Achieve 100% local job creation including project management, engineering, and skilled electricians
• Meet or exceed SUBP goals through MBE and WBE contractors with whom we already have established relationships and proven workmanship
• Meet or exceed all prevailing wage requirements

Sundial is currently developing multiple building projects for:

• Hopkins School District (2 sites, 1.35 MWDC)
• St. Louis Park School District (9 sites, 2.5 MW DC)
• YMCA of the Twin Cities (13 sites, 3.5 MW DC)

In 2020 Sundial completed the largest rooftop array in Minnesota at the Wagner SprayTech building in Plymouth (1.36 MW DC). Sundial’s proposal features established relationships with local MBE/WBE subcontractors who have been vetted by Sundial and subcontracted with us on other projects. Our MBE/WBE subcontractors include:

• EVS: An MBE providing electrical and structural engineering services, with its base in Eden Prairie, MN.
• Blue Sky Electric: An MBE PV solar installer based in Shoreview, MN and operating throughout the Metropolitan area
• Wonder Woman Construction: A WBE with 10+ crew and extensive solar installation experience

The City will include contract language that requires Sundial to work with City workforce agencies to hire Minneapolis residents that have participated in these green job training programs

The City has expressed an interest in developing solar on City owned buildings located in the Green Zones and to work with the City’s workforce training programs.

Based on Sundial’s responses and staff review of all applications, this RCA is requesting permission for Property Services staff to execute a contract with Sundial Solar for the arrays to be built on City owned facilities for total of 5.1 million annual kWh at a cost of $0.105/kWh and inclusive of provisions to meet the City RFP objectives listed above