Ms. Lucky.
I hope you are doing well.
I am writing to inquire about some of the figures presented in Staff Report 21-241-CC as well as during the City Council meeting held on December 7, 2021.
Based on the assertion that there would be cost savings associated with the MPCC Solar Project, the Council voted to certify such savings and I am wondering what the basis for that assertion is.
In particular, the figure presented on page K-1.4.
Are there any documents detailing the calculation used to demonstrate the savings alleged?
If so, can I get a copy of them?
In any event, as I understand it, the figures are based, in part, on a 5 year maintenance agreement starting at $65,236/year increasing at 3% for five years.
But the chart shows savings starting in year 16 or 18.
What maintenance figure, if any, was used for years 6-30?
I note that pages K-1.53, 1.58, and 1.60 include provisions for negotiating future agreements in "good faith."
Every person who has attended one semester of law school knows that agreements to agree in the future (even in "good faith") are no enforceable.
In addition, various items in the project have limited warranty periods and I am wondering how, if at all, the costs associated with the expiration of the warranty periods was accounted for.
For example, the batteries appear to have a 20 year warranty from Tesla.
However, the chart shows savings from using the system after year 20.
Was it just assumed that the batteries would work 50% longer than their warranty and, therefore, that no additional costs were incurred?
If additional costs were included and reflected in the figure, what were they?
Other aspects have shorter warranty periods.
As a real world example, you can't say a Rolls Royce costs less than a KIA by assuming that the Rolls lasts forever and either has no maintenance costs or that the maintenance costs stay the same no matter how old it is.
Further, I note that the maintenance portions of the attached agreements only appear to cover labor and not the costs of parts and/or replacement of damaged or out of warranty equipment.
For example, page K-1.55 shows a variety of items that would need to be replaced at various times.
Again, how, if at all, were these costs accounted for in the costs savings calculations?
Simply as an example, the idea that an EV charging station will be in operation for 30 years without replacement (either because of sheer use or changes in EV charger connections) seems unlikely.
Finally, how was the cost of money itself accounted for in the calculations?
The proposal is to spend ~$5.2M in year 0 for the project, as opposed to either zero or a VERY low amount in plain electric.
Thus, the cost of the investment opportunity of the $5.2M foregone has to be factor in.
How, if at all, was this accounted for?
Hopefully, all of these items were reasonably accounted for in the calculations presented to the City Council.
Regards,
James Pistorino
