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CL-2465 Work Session   Item #: A.       
Meeting Date: 01/05/2021  
Subject:    Battery Energy Storage System Proposal
From: Jason Grey

COUNCIL ACTION
Work Session Meeting:     01/05/2021
SUMMARY
Danville Utilities has been evaluating various ways to lower electric demand during transmission and capacity peak hours.  Approximately 30% of the City's power supply costs are demand related and can be lowered by various types of peak shaving.  After extensive evaluation, staff recommends pursuing a 10.6 megawatt battery energy storage system that would be beneficial to the ratepayers of Danville Utilities.  This project will help reduce the City's rising transmission, capacity, and congestion charges.  Staff proposes entering into a 20-year capacity agreement with Delorean Power to construct, own, and operate a 10.6 megawatt lithium-ion battery storage system at our current warehouse property on Industrial Avenue.   The City would not be responsible for any of the upfront capital costs or the maintenance of the facility.
BACKGROUND
Staff evaluated approximately a dozen possible battery storage system proposals in 2019 in an effort to lower transmission and capacity costs.   No recommendations were made in 2019 and the price of the battery systems have dropped significantly because of additional manufacturing due to cell phones, tablets, electric vehicles, and growing deployment of battery storage systems.  Delorean Power's proposal is unique in that they bill based on the performance of the system during transmission and capacity peaks rather than the available capacity of the system.  Their battery storage proposal was the only response that offered this incentive.
RECOMMENDATION
Staff recommends Danville City Council authorizes the City Manager to enter into a capacity agreement for 10.6 megawatts of battery energy storage to be constructed within the Danville Utilities service territory as recommended by the Danville Utility Commission. 

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