City of Santa Monica

Staff Report

Grant for Santa Monica City Yards Advanced Energy District


Department:Public Works, Office of Sustainability & EnvironmentSponsors:
Category:03. Consent Calendar


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Recommended Action

Recommended Action

Staff recommends that the City Council:

1.     Authorize the City Manager to accept a grant award in the amount of $1,487,609 from the California Energy Commission: Accelerating the Deployment of Advanced Energy Communities for the Santa Monica Advanced Energy District project at the City Yards, and to accept all grant renewals.

2.     Authorize the City Manager to execute all necessary documents to accept the grant and all grant renewals.

3.     Authorize budget changes as outlined in the Financial Impacts & Budget Actions section of this report.


Staff Report Body

Executive Summary

On March 25, 2016, the Office of Sustainability and the Environment (OSE) received a grant award of approximately $1.5M from the California Energy Commission for its Santa Monica Advanced Energy District project proposal. The intent of the project is to integrate a small, localized energy grid (microgrid) consisting of onsite renewable generation and energy storage based at the City Yards and Bergamot Arts Center. This microgrid would provide efficient, reliable, and cost-effective energy that has a low environmental and carbon impact. It could also store energy, allowing the City Yards and surrounding businesses to continue critical operations in case of a major power outage. Grant funding for Phase 1 would be used to develop and finalize the Santa Monica Advanced Energy District prior to the commencement of construction.



On November 24, 2015, the California Energy Commission (CEC) released a grant funding opportunity entitled “The EPIC Challenge: Accelerating the Deployment of Advanced Energy Communities.” The submission was due to the CEC February 17, 2016. The solicitation called for applicants to propose measures to plan, design and permit communities that:

·         Minimize need for new energy infrastructure costs, such as transmission and distribution upgrades.

·         Provide energy savings by achieving and maintaining zero net energy community status (accounting for behavior and increasing loads from vehicle and appliance electrification).

·         Support grid reliability and resiliency by incorporating technologies such as energy storage.

·         Are financially attractive from a market standpoint (developers, home buyers, renters).

·         Provide affordable access to renewable energy generation, energy efficiency upgrades, and water efficiency and reuse technologies that reduce electricity consumption for all electric ratepayers within the community.

·         Makes use of smart-grid technologies throughout the community.

Santa Monica was awarded a Phase I grant of approximately $1.5M to plan, design and permit a small, localized energy grid (microgrid) consisting of onsite renewable generation and energy storage based at the City Yards and Bergamot Arts Center. A Phase II grant opportunity would become available in early 2018, which would fund $8M for construction of such a project.




The traditional electrical grid functions in a one-way system, in which energy is generated from a massive power plant and transmitted one-way over hundreds of miles of transmission lines and substations to its customers. However, as the needs of customers have changed with electric vehicle charging, mobile and electronic device plug loads, on-site solar and energy storage, there is a need for the grid to evolve into a decentralized system that allows for local generation, building-to-grid or vehicle-to-grid electricity flow and grid independence.


Microgrids provide the link between decentralized local energy generation and storage capabilities and the larger regional grid. Generally, a microgrid consists of at least one generation system, like solar, batteries and controls. This controlled energy system allows for buildings or campuses to disconnect from the larger utility grid in times of outages or emergencies. Microgrids also allow for greater optimization of onsite energy generation, by capturing unused energy in batteries and deploying the energy when it is needed.


When the grant was announced, staff from the Office of Sustainability and the Environment, the Public Works Department and the Planning and Community Development Department identified the City Yards as a prime area of opportunity. This area is ideal for several reasons:

·                     It is City owned and operated.

·         It has reached the end of its useful life and is undergoing a complete reconfiguration through a City-led master plan effort which will coincide with the implementation of this EPIC challenge grant.

·         It has aggressive sustainability goals for zero net energy, non-potable water use and greater community integration.

·         It is relatively low rise, with a fairly low energy density which means that the addition of renewable energy such as photovoltaics will likely have a surplus that could be used in adjoining parcels.

·         It contains alternative fuel vehicle charging, including electric vehicles, which offers a unique energy storage opportunity.

·         It may be designated as an “Essential Services Facility, acting as an operations center for public works and first responders, thus, further necessitating local energy sources and control.


The project concept would not be limited to the City Yards, but would seek to include adjoining properties under City control, such as the Bergamot Arts Center. This area would comprise the initial Santa Monica Advanced Energy District. By providing local renewable energy, storage and electric vehicle charging and other grid services, the Advanced Energy District can play an important and valuable role in promoting sustainable development of the surrounding area. As an anchor to the microgrid and major stakeholder in local redevelopment, the City can utilize policy levers and incentives to expand the microgrid to multiple users. These policies and tools would be explored in the grant activities.


The project would utilize four strategies to establish a multiuser microgrid. First, the City would own and operate its own microgrid, serving the City Yards facility. Second, the City would work with Worthe Development Group at the City-owned Bergamot Arts Center, to develop appropriate regulations and incentives through the entitlement and development agreement process and establish a unique partnership model. Thirdly, a master plan over this area would be developed to delineate the integration and interconnection between the City, the public and the utility. And finally, the City would explore the utility of its role as a Community Choice Aggregator to incentivize, construct and generate retail power supply.


The grant activities are being led by the Office of Sustainability and the Environment (OSE), in close collaboration with the Public Works Department, Housing and Economic Development Department, Planning and Community Development Department.

·         The Office of Sustainability and the Environment will serve as the grant administrator, manage the primary contractors and convene the various municipal departments, utilities, and other stakeholders.

·         The Architecture Services Division will lead the City Yards Design Team to ensure the required microgrid components are integrated into the redevelopment project.

·         The Economic Development Division and the Planning and Community Development Department will be the main points of contact and advisors to the real estate transactions and redevelopment negotiation with the private developer of Bergamot Arts Center.


The activities conducted under the Phase I grant award would support robust planning of advanced energy systems. A Phase II grant opportunity would become available in early 2018, which would fund $8M for construction of such a project. Accepting the Phase I grant funds does not commit the City to fund the construction.


Staff will present the City Yards feasibility study to Council later this year and request authorization to proceed with a guaranteed maximum price for design-build from Hathaway Dinwiddie, the existing City Yards design-build contractor. If approved, funds from the grant would be used to support the additional scope of work of microgrid design.


Staff will return to Council with a request to authorize awarding a contract to a firm to develop a master plan for and design the microgrid at the City Yards. 


Financial Impacts and Budget Actions


Award of a $1,487,609 grant from the California Energy Commission: Accelerating the Deployment of Advanced Energy Communities requires the following FY 2015-16 budget changes:

1. Establish revenue budget at account 20226.410360 in the amount of     $1,487,609.


2. Appropriate $1,487,609 to account C209195.589000 for expenditures related to the City Yards Microgrid Project grant.


If renewals are awarded, budget changes would be included in subsequent year budgets, contingent on Council budget approval.



Meeting History

May 24, 2016 5:30 PM  City Council Regular and Special Joint Meeting
draft Draft