In October 2015, the State of California enacted bill SB 350, also known as The Clean Energy Act. The Act established new clean energy, clean air, and greenhouse gas reduction goals for the state.
Specifically, the Act requires that all load-serving entities enter into long-term renewable energy contracts. The ultimate goal of the Act is to reduce emissions for larger entities: local government falling under that goal. In order to meet this requirement, California Choice Energy Authority or CalChoice, on behalf of San Jacinto Power, issued a Request for Proposals (RFP) for Renewable Energy Projects in December 2018.
CalChoice received over 100 proposals and after much consideration, its legal and technical team has negotiated and finalized commercial and contract terms on behalf of its member agencies with Terra-Gen, LLC for its Tehachapi Plains Wind project. The Tehachapi Plains Wind project is a 28.2 MW project located in southern Kern County, with a commercial delivery date of January 2021. San Jacinto Power will receive approximately 14% of the wind project’s generation. With the execution of this contract, which fulfills approximately 22% of SJP’s long-term requirement, SJP will have contracted for a total of 40% of its state mandated obligation.
Unlike the many expenses that the city pays for through pre-prepared funds, the requirements the city has to meet are mandated by the Federal government and are paid out-of-pocket by the city. The expected cost for this project is $672,079 annually for twelve years beginning in fiscal year 2021. There will be sufficient revenues generated to cover operating expenses, including power procurement, and dollars to fund reserves to provide financial and rate stability to the program.
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