Guam § 7116 - Power Purchase Agreement to Purchase Solar Energy.

§ 7116. Power Purchase Agreement to Purchase Solar Energy.

(a) The Guam Department of Education (GDOE) may enter

into one (1) or more Power Purchase Agreements (PPA) to

purchase solar energy from qualified provider(s) which will be in

the best financial interests of the government of Guam for a period

up to and not exceeding twenty-five (25) years. Such qualified

PPA provider(s) shall be selected by a Multi-Step Bid conducted

by GDOE, in accordance with the procurement law and

regulations of the government of Guam. The qualified PPA

provider(s) will be responsible for providing a PPA to cover no

more than eighty percent (80%) of the school’s power needs, all

GDOE owned schools, and GDOE administrative and ancillary

buildings. For schools occupied under a lease agreement as of the

enactment of this Section, GDOE may amend its lease agreements

or otherwise directly enter into a PPA with a lessor for the

purchase of solar power produced with renewable energy directly

from the lessor and without application of the procurement law.

GDOE is encouraged to participate in energy efficiency programs

available through the Guam Power Authority, and shall make

every effort to secure federal funding opportunities to augment

any local appropriations authorized for Power Purchase

Agreements.

(b) The qualified PPA provider(s) shall be considered

responsive if accepted proposals have been deemed technically

acceptable and provide the best value to GDOE and the

government of Guam.

(c) The qualified PPA providers may submit a single

proposal without limitation or discrimination on all proposals

made in good faith. A qualified PPA provider(s) will be allowed

to submit a single proposal for one GDOE facility or multiple

GDOE facilities in good faith.

(d) The Guam Power Authority, under the direction of

GDOE, shall provide bid specifications for the implementation of

this Section, and shall provide technical assistance during the bid

selection process as overseen by GDOE. GDOE shall seek

technical consultation from the Guam Power Authority in

implementing this Section, and the Guam Power Authority shall

provide the technical consultation upon request at no cost to

GDOE for the life of the contract. Upon GDOE’s request, GPA

shall provide a cost-benefit analysis of a PPA to GDOE and to I

Liheslaturan Guåhan within ninety (90) days of said request.

GDOE may further seek technical consultation from the Guam

Energy Office, the Department of Public Works, the Guam

Renewable Energy Association, and/or a third party renewable

energy consultant in implementing this Section, and the

consultation shall be at no cost to GDOE. Any costs associated

with a third party consultant will be passed through in total to the

qualified PPA provider(s) equally and in full who is awarded the

Multi-Step Bid.

(e) In concert with GDOE, the selected qualified PPA

providers shall review historical power needs, such as the past

twelve (12) months of power consumption, of the selected schools

and provide the maximum sized photovoltaic safely allowed by

roof size, building orientation and location, and other physical

conditions which may affect the safe and effective size of the

photovoltaic system. In no case shall the system be sized to

produce power in excess of the needs of the specific building or

campus as recorded during the previous twelve (12) months,

exclusive of extraordinary circumstances, such as natural

disasters, that may result in power generation greater than

consumption for the period.

(f) The qualified PPA provider(s) shall pay for the design,

financing, permitting, insurance, installation, monitoring and

maintenance of the system, and shall own and operate the system

located on GDOE's facility for the life of the contract at no cost to

GDOE or the government of Guam.

(g) The qualified PPA provider(s) must possess a valid

Guam business license prior to the award of the contract.

(h) The qualified PPA provider(s) shall be experienced in

designing, implementing and installing solar energy systems, and

have a record of established projects, demonstrate technical,

operational, financial and managerial capabilities to design and

operate a solar energy system.

(i) The qualified PPA provider(s) shall warrant that the

solar energy paid by GDOE will not exceed eighty percent (80%)

of Guam Power Authority's current billing charges to GDOE

schools, GDOE administrative, and GDOE ancillary buildings, as

determined by the most recent utility invoices for that selected

building, school or campus. Escalation of rates for years two (2)

through twenty-five (25) shall be determined and set in advance.

At no time shall the qualified PPA providers produce power in

excess of the needs of the designated school/campus, based upon

annual consumption of the designated school/campus, exclusive

of extraordinary circumstances, such as natural disasters, that may

result in power generation greater than consumption for the

period.

(j) The qualified PPA provider(s) shall work with GDOE

concerning any existing school roofing warranties to ensure said

warranties are not voided with the installation and operation of the

solar energy systems.

(k) The qualified PPA provider(s) shall perform repairs to

any portion of the roof damaged during the installation and

operation of the solar energy systems, and shall maintain those

repairs for the duration of the warranty or the contract, whichever

is the shortest.

(l) Every year, on the anniversary of the date of the

commissioning of the solar energy system, the qualified PPA

provider(s) shall report to the GDOE on the production for the

previous year comparing rates charged by the qualified provider

against rates being charged by the utility detailing the savings for

the previous year. GDOE shall transmit a copy of this report to

the Speaker of I Liheslaturan Guåhan.

(m) The qualified PPA provider(s) shall not extinguish its

obligations under the agreement by assigning it to another

company that has met the requirements set forth in this Section

without the approval of the Guam Board of Education, which will

not be unreasonably withheld.

(n) Upon the expiration of the PPA, GDOE may have the

option to purchase the solar energy system at an agreed upon Fair

Market Value (FMV). FMV will be determined collaboratively by

the PPA provider(s), GDOE, and a third party Subject Matter

Expert (SME). GDOE also reserves the right to purchase the

system at any time after the 7th year of the PPA at a determined

FMV, and recognizes that a qualified PPA provider(s) would face

negative impact tax implications if bought out prior to the stated

timeframe.

(o) The agreement shall include a provision which will

impose a monetary fine per day for each day beyond the agreed

date that the qualified provider(s) promises to implement the solar

energy system. The provisions in this Section shall not apply in

the case of force majeure to the extent of delays caused by such

force majeure. The provisions of this Subsection cannot be

waived. Said monetary fines shall be deposited into Y Kuentan

Salåppe’ Prinsepåt Fund, and shall be used for the school where

the implementation of the solar energy system or any other

renewable energy sources is delayed.

(p) Qualified PPA provider(s) may be allowed to locate and

or co-locate the solar energy system on private or government

property at another site for the purposes of achieving renewable

energy power generation to satisfy the power consumption under

this Section. GPA, who has also recognized the benefit of “off

site” power generation, will recognize an offsite net metering for

a qualified PPA providers, as long as the qualified PPA provider

of solar energy system is in compliance with the current cap set

forth for residential and commercial net metering, 25KW and

100KW per meter respectively. The following conditions must be

met:

(1) If the qualified PPA providers, doing its due

diligence, identifies that the rooftop of any GDOE owned

schools, GDOE administrative, and GDOE ancillary

buildings and for schools occupied under a lease agreement

may not be financially feasible due to the age or quality of

the building’s rooftop.

(2) In the event that the utility grid is unable to receive

the renewable energy source for the respective school,

GDOE administrative, and GDOE ancillary buildings, and

for schools occupied under a lease agreement, being

interconnected with GPA’s utility grid.

(3) In the event that there is no room to install the

photovoltaic solar energy system due to limited access of

rooftops and real property of all GDOE owned schools,

GDOE administrative, and GDOE ancillary buildings, and

for schools occupied under a lease agreement.

(4) The qualified PPA provider(s) shall apply for a

meter, at their own expense, to record the flow of power into

the existing grid.

(5) If co-located, that each individual system be

metered for each specific qualified PPA provider(s).

(6) The location of the off-site power generation has

met all other building code and requirements.

(7) The qualified PPA provider(s) has submitted proof

of land ownership and/or legal lease of land used for the

purposes of solar power generation.

(8) The qualified PPA provider(s) will provide an

interconnection study that validates the ability of a

photovoltaic system prior to construction; if that photovoltaic

system(s) is expected to exceed 100KW due to co-location.

(9) An interconnection study that dictates an

improvement or an upgrade is required in order for a

customer generator’s power to be accepted by GPA at grid

connection will be the responsibility of the qualified PPA

provider(s).

(q) Throughout the qualified PPA provider’s management

duration of any solar energy system procured and installed under

this Act, the qualified PPA provider shall, at no cost in excess of

the management agreement, remove and reinstall any such solar

energy system at the request of the Superintendent of Education,

if the facility that such system is installed upon undergoes

renovation or demolition that may affect the usefulness of the

solar energy system.

(r) Each participating school will have access to fifty

percent (50%) of the energy savings yielded from the PPA and

GDOE for the respective schools. The savings shall be transferred

from the utility pool and deposited into Y Kuentan Salåppe’

Prinsepåt Fund for each respective school from the energy savings

produced from the lower cost of energy provided by PPA. The

funds will be available within thirty (30) days from the close of

each quarter.

(s) Each participating school will have access to the

remaining fifty percent (50%) of the energy savings yielded from

the PPA for the respective schools. The savings shall be

transferred to Maintenance Division for the maintenance and

repair of all DOE schools from the utility pool and deposited into

the Energy Efficient Fund for each respective school from the

energy savings produced from the lower cost of energy provided

by PPA. The funds will be available within thirty (30) days from

the close of each quarter.

(t) GDOE will have access to the annual utility

appropriation set forth in its GDOE budget for Power Purchase

Payment commitments to its Qualified Power Purchase

Agreement provider(s). In addition, GDOE will still be obligated

from its utility appropriation to pay for the utility from Guam

Power Authority which is not part of the Power Purchase

Agreement.

(u) Pursuant to its authority under 17 GCA § 7116, the

Guam Department of Education shall submit a report on the status

of its progress to enter into power purchase agreements to the

Speaker of I Liheslatura within thirty (30) days of enactment of

this Act.