MEETING OF THE CAPITAL OUTLAY COMMITTEE OF THE BOARD OF TRUSTEES SHASTA-TEHAMA-TRINITY JOINT COMMUNITY COLLEGE DISTRICT WEDNESDAY, NOVEMBER 12, 2008

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1 COMMITTEE OF THE BOARD OF TRUSTEES SHASTA-TEHAMA-TRINITY JOINT COMMUNITY COLLEGE DISTRICT WEDNESDAY, NOVEMBER 12, 2008 MINUTES The Board of Trustees Capital Outlay Committee of the Shasta-Tehama-Trinity Joint Community College District met on Wednesday, November 12, 2008, in the Board Room of the Shasta College Administration Building. 1. CALL TO ORDER The meeting was called to order by Mr. Harold Lucas, Capital Outlay Committee Chairperson, at 6:30 p.m. 2. ROLL CALL Roll Call indicated the following: Trustees Present Mrs. Judi D. Beck Mrs. Patricia A. Hunn Mr. Harold J. Lucas Ms. Missy P. McArthur Mr. Kendall S. Pierson Mrs. Rayola B. Pratt Mr. Scott J. Swendiman Trustees Absent Ms. Vienna Montague, Student Trustee Mr. Joe Wyse, Vice President of Administrative Services, said there have been discussions regarding solar power for the college since he first starting working here. Since then he has had many discussions with other school officials and companies that offer solar power alternatives. Mr. Wyse said he has come to the conclusion that it is time. He asked Mr. Matthew Giannini, Project Development Manager, of SunPower Corporation/Systems to give a presentation to the Board because of what s on the regular Board Agenda. Mr. Giannini gave a PowerPoint presentation. A portion of the presentation included information as follows:

2 COMMITTEE OF THE BOARD OF TRUSTEES NOVEMBER 12, 2008 Definitions: Kilowatt-peak (kwp): system size; capacity Kilowatt hours(kwh): energy produced/hour Energy Yield (kwh/kwp): energy produced/kilowatt System Efficiency Energy Density (kwh/sq ft) Land Use Efficiency Levelized Cost of Energy net cost of solar energy (cents/kwh) Renewable Energy Credits (RECs), or Green Tags Tradeable environmental certificates CA RPS 20% renewable by 2010 Today s value = 1 cents/kwh Tomorrow s value SunPower can help broker REC sales Fulfillment of Shasta College Objectives: Shasta College Objectives Maximize Energy Hedge Break-even to Positive Cash Flow Leverage Most Efficient Technology Environmental Benefits Realize Ancillary Benefits Overview of Systems: SPWR Fulfillment Shasta campus hedge = 40-50% Tehama campus hedge = 90% Muni lease requires zero capital outlay Cumulative positive cash flow 19.7% SunPower PV module efficiency SunPower trackers 30% higher yield CO2 Emission Offset (gallons of oil):?both systems? PR - visibility from Highway 299 Tie to education programs Key Metrics Shasta Campus Tehama Campus System Size 1 MW 200 kw Year 1 Energy Production (kwh) 2,300, ,000 Levelized Cost of Energy (LCOE)* 8 cents/kwh 8.5 cents/kwh Gross Price (before incentives)** $8-10 million $1-1.5 million 30-Year Savings*** $7-14 million $1 2 million *LCOE = [Net price NPV(Depreciation) + NPV(Annual Costs)] /

3 COMMITTEE OF THE BOARD OF TRUSTEES NOVEMBER 12, 2008 NPV (System output) **Full turn-key price. Not to exceed price is available. Assumes Board approval on December 10th. ***Utility Rates: - Shasta Campus: 13.7 cents/kwh - Tehama Campus (expected): 15 cents/kwh Proposed Schedule: Action Completion Date T qu SunPower site audit Complete SunPower submits system layout Complete and lease pricing Submit PG&E rebate applications and deposits Nov 14, 08 Publish RFQ RFQ responses received Receive firm lease pricing Dec 1, 08 Confirm conditional reservation from PG&E Board Approval Dec 10, 08 Execute Contract Dec 19, 08 System Design, Permitting Jan May 09 5 Construction (Constellation contract up for renewal Nov, 09) June Nov 09 6 Mrs. Pratt asked who the District would borrow from. Mr. Giannini said they checked with Bank of America and the rates depend on the day. It has held consistent at about 5.5%. Mr. Lucas asked if the District can borrow from Bank of America in that manner. Mr. Wyse said it would be a municipal lease for a public agency; it is not a private loan. Mr. Swendiman asked if there were any hazardous materials. Mr. Giannini said no. Mr. Giannini said the design life is 30 years. The equipment designed 50 years ago is still working. The system comes with a 10-year full-system warranty. Beyond that, there is very little maintenance on the tracker systems. They have hundreds of systems out there. The system is

4 COMMITTEE OF THE BOARD OF TRUSTEES NOVEMBER 12, 2008 solid state engineered and very low maintenance. It has a proven track record. A maintenance allocation after year 11 could be put in. Mr. Wyse said they added in $30,000 a year for maintenance after that. We consume 5.6 megawatts and this system will give about 3 megawatts. The first year of operation would be Mr. Pierson said every time he has looked at these systems, the payback is years, it depends on the incentives. Mr. Giannini said if he ran a cash performer payback, it would be 5-6 years. Without the incentive, the college wouldn t want to do solar. This system puts out a lot of power and you get a lot of rebates. Mr. Pierson asked if they use PV pipe. Mr. Giannini said they use thin film. Mr. Lucas said he read about that in Popular Science. Mr. Giannini said they are 19% efficient on the module level and thin film is about 10%. Mr. Pierson asked if they are the manufacturer. Mr. Giannini said their firm in Manila, Philippines, builds the modules, which are shipped to Richmond and then manufactured. Mr. Swendiman said a friend of his was told that the manufacturing is too toxic to be done in the U.S. and it can only be done in China. He asked if it is just the process or whether there is a residual toxic issue that the owner is left with. Mr. Giannini said it is his understanding that it is the labor rates in the Philippines not any toxic issues but he said he would be glad to research it. Mr. Giannini showed pictures of the array layout. It can be moved. The preliminary design is about 8 acres. Joe Wyse added that they can connect into the 500 building. Another possible Phase 2 is the Tehama Campus. They scoped out a potential location on that campus. First they need to see what the usage at the campus is and then size it out. Mr. Wyse said he will be taking Matt Giannini to the Tehama site. Ms. McArthur said she would question putting the array where it can be seen. Mr. Lewis said the college would want the public to see it. Mr. Wyse said each row has the

5 COMMITTEE OF THE BOARD OF TRUSTEES NOVEMBER 12, 2008 panels turn and follow the sun; you must have a long east/west pathway, which limits where you put it. Mr. Pierson said in this climate, with an 8-acre footprint, perhaps they could grow something under them. He asked if anyone is doing that. Mr. Giannini said yes they are. He said the motors are in the center of the row. They are ½ HP electric motors, with direct drive, and they are all GPS based. The District could install a smaller system like 5 acres but this system gives the most output. Mrs. Pratt asked where they would put the field for the rest of the campus since this is only 50%. Mr. Giannini said the staff would just find another area. Mr. Pierson noted that it isn t cost effective because this is the maximum size for rebates. Rayola Pratt said she was thinking of plans for the future. Mr. Wyse noted that the array is moveable; they are not affixed permanently to the ground. Rayola Pratt asked what the cost of our total utilities is with PG&E. Mr. Wyse said the cost for electricity is approximately $800,000 per year. Half of that would be eliminated with solar but we would roll the savings into the loan payments. Mrs. Beck asked what kind of effect there would be if this area is annexed into the city of Redding. Mr. Lewis said he did not see annexation happening for quite a while. There is a gap from where we are and the city is. It could have an impact because the rates for utilities for the City of Redding are less. Mr. Pierson said Redding utility rates are about 10 cents. Mr. Lewis said he didn t predict it happening in the next five years. Mr. Giannini said, in addition, the utility rates are going up. Scott Swendiman asked if the climate here takes a greater toll on the equipment. Mr. Giannini said that is a good point because rain cleans the panels. Most of their trackers are in Germany and there are many in New Jersey. They are the second biggest market in the U.S. and they have snow and still get good results. Mr. Pierson asked if it is glass and whether it is coated with the self-cleaning coating. Mr. Giannini said he did

6 COMMITTEE OF THE BOARD OF TRUSTEES NOVEMBER 12, 2008 not know about the coating but he would find out. Mr. Giannini showed pictures, explaining that the panels are tilted 20 degrees to the south and they rotate during the day. The GPS is timed for the season and year. This system produces as much as any system out there. Mrs. Pratt asked about the wind. Mr. Giannini said their arrays in Florida and New Jersey have had wind storms of up to 100 miles per hour without damage. Mrs. Hunn asked about fire. Mr. Giannini said the District would need to insure these; it would go under your insurance. Scott Swendiman asked if the CEQA permit is part of this entire cost. Mr. Giannini said yes, and they estimate that it would take at least six months. Mr. Wyse said he talked to people in Napa Valley and Chico who have this system. Tomorrow he is going to see the system in Lake County. Mr. Giannini thanked the Board for their time. He said he would research their questions and get back to Mr. Wyse with the answers. 5. ADJOURN It was moved by Mrs. Hunn, seconded by Ms. McArthur, and carried TO ADJOURN THE MEETING. Mr. Lucas adjourned the meeting at 7:05 p.m. Respectfully submitted, Susan Vanderwerf Recorder