REQUEST FOR PROPOSALS FOR PUBLIC-PRIVATE PARTNERSHIP DEVELOPMENT TEAM FOR IMPLEMENTATION OF ENERGY DELIVERY SYSTEM FOR MUNICIPAL ELECTRIC UTILITY NEW!

1. Introduction – Coachella Municipal Electric Utility

On July 31, 2019, the City Council of the City of Coachella (“City”) adopted Resolution No. 2019-62 authorizing the creation of a limited municipally owned utility for the purpose of providing electrical utility services. The Coachella City Council established the municipal utility to provide electric and gas service to certain new development and under-served development (i.e., “greenfield” areas) within the City’s municipal boundaries. The City has been exploring various options to ensure that its residents and businesses receive utility services that meet the current and future needs of the community at fair and reasonable rates. The City has also been exploring options to ensure that such services are cost-effective, meet federal and state standards, provide high-quality customer service, and provide long-term reliability to meet City energy needs.

On June 12, 2024, the Coachella City Council approved unanimously the issuance of a competitive solicitation process to start the new municipal electric utility.1 On October 22, 2024, the City issued a Request for Qualifications (“RFQ”) to solicit interest and qualifications from prospective project partners to “jump start” the municipal electric utility. Proposals were due December 6, 2024. The City reviewed and scored the three proposals pursuant to the RFQ criteria, seeking to identify qualified prospective partners, and determined that all three prospective partners satisfied the RFQ requirements and are qualified to proceed to the formal solicitation phase.

The City is now launching its electric service program and issuing this Request for Proposals (“RFP”) to identify and select a project partner to develop, design, finance, construct, and/or operate an electric generation, distribution, and/or transmission system through a public-private partnership pursuant to California Government Code section 5956.5 et seq. that would serve immediate development needs and be scaled to serve increasing development within the City service area. In addition, the City has also examined the possibility of wheeling electricity and capacity over adjacent transmission lines owned and operated by the Imperial Irrigation District (“IID”). The City will, as part of this RFP, consider proposals from prospective counter-parties that would sell all or a portion of the necessary electricity and capacity to the City through wholesale power purchase agreements or energy services agreements (“ESA”), in conjunction with, or through some combination of a generation, distribution, transmission, and ESA energy delivery system (collectively, the “energy delivery system.”)

The City is seeking a provider or team who will provide the energy delivery system through a turnkey agreement with no upfront cost to the City but that City payments for the energy delivery system, including any use of an ESA, be structured through long-term payments to the provider secured by City electric revenues and a lockbox structure. Proposals under this RFP must include formal proposals and cost information.

2. Background and Project Description of Municipal Utility Formation Coachella Development Area

The City of Coachella is located in the eastern Coachella Valley in Riverside County, California. The City is a California municipal corporation and general law city with a population of approximately 42,554 residents. It is one of the fastest growing cities in California and contains a number of large employers along with large-scale planned development in greenfield areas of the City.

Certain developed portions of the City, along with cities and unincorporated areas within eastern Coachella Valley, are currently being provided electric service by IID, an irrigation district formed under and governed by the California Water Code. As part of its powers as an irrigation district, IID provides electric service to ratepayers within its service territory of Imperial County. Due to historical factors, IID also provides electric service to certain areas outside of its territorial boundary, including eastern Riverside County where the City of Coachella is located.2 Substantial load growth is anticipated in the City and throughout the region. For a variety of reasons, IID has faced significant challenges to its ability to extend timely, cost-effective service to new and existing customers in the City. Due to projected economic development and associated load growth and IID challenges in serving the City, the City seeks to ensure development of an energy delivery system that supports expected economic growth over the near term and beyond.

Due to the need for Coachella Valley governance and local control over electric service and aging and unavailable electrical infrastructure to serve existing and new development, among other reasons, the eastern Coachella Valley municipalities have been examining alternatives to their current electric service with IID.3 As part of those efforts, the City has determined that its residents and businesses are best served by a City owned and operated municipal utility due to the need for local control and self-governance, improved infrastructure to serve under-utilized and future development, and competitive rates and cost effectiveness while meeting state environmental goals. The municipal utility intends to serve new customers in undeveloped or under-served areas of the City in the form of a “spot utility,” and potentially some existing customers, which service will be in the largely undeveloped northeast portion of the City, as depicted on Attachment A of this RFP, attached hereto (the “Development Area”).

As part of the initial municipal utility service to the Development Area, the municipal utility will initially serve load in the M-W Wrecking Yard zone (also known as the “Auto Wrecking Zone”), and in the Industrial Zone. The Auto Wrecking Zone encompasses approximately 260 acres, and is generally bound by the Union Pacific Railroad tracks and Dillon Road to the west, Avenue 48 to the north, the Whitewater River to the east, and Avenue 50 to the south. The Industrial Zone encompasses approximately 670 acres and is generally bound by Avenue 52 to the north, State Highway 111 to the west, Avenue 55 to the south, and a flood control channel to the east. The Auto Wrecking Zone and Industrial Zone are collectively known as and referred to herein as the “Economic Development Zone” or “EDZ,” and are depicted on Attachment B, attached hereto.

Developed portions of the City are currently served by IID, which provides electric service outside of its territorial boundary of Imperial County. IID acquired a public utility in the 1940s that provided certain service in the Coachella Valley. IID also purports to serve the Coachella Valley through a water rights Compromise Agreement executed in 1934, between IID, the Coachella Valley Water District, and the federal government. IID provides certain retail electric service outside its territorial boundaries, is a transmission provider subject to Open Access Transmission Tariff regulations and other rules of the Federal Energy Regulatory Commission (“FERC”), and is the Balancing Authority for the region. The City does not, at this time, propose providing its municipal utility service to existing City residents and businesses served by IID, except in limited fashion where feasible, but to the undeveloped and under-served areas of the City as depicted in the City’s service territory.4

Energy Delivery System and Municipal Utility Load Estimates

The City has conducted a feasibility analysis of the municipal utility. The City’s projected load estimates for the Development Area are set forth at Attachment C and the City’s Feasibility Study for Municipal Electric Service to the Development Area, dated April 2024, and accompanying Staff Report that were presented to the Coachella City Council on June 12, 2024 are set forth at Attachment D, both attached hereto. The total anticipated load in the EDZ is approximately 63 MW based on future industrial uses, with an additional 11 MW in the remaining Development Area. It is anticipated that City load in the EDZ may increase to approximately 40 to 50 MW over a short-term period of three to five years and will be a mix of commercial, industrial, and agricultural (including cannabis) loads, and that new distribution and transmission facilities, including one or more substations, will be required to serve load growth in the EDZ and throughout the larger Development Area. It is further anticipated that load growth will continue within the Development Area beyond the EDZ up to approximately 100 MW. In order to accommodate the load projections, the City is examining the electricity that will be needed from either an ESA or newly constructed generation, or both, as well as implementation of distribution and transmission facilities.

IID offers point-to-point transmission service for IID facilities. IID also sells available transmission capacity through its Open Access Transmission Tariff (“OATT”) to other entities that need IID lines to transport energy. This type of service can be used for the transportation of capacity and energy into, out of, through or within IID’s system. The City has explored upgrades

4 The Coachella City Council has authorized the issuance of a valuation study for IID assets serving the City that will be conducted through a separate Request for Proposals outside of this RFP process.4

to existing IID facilities and wheeling over IID transmission. IID has publicly indicated that there is no available capacity on its existing transmission to serve new load in the Development Area. The City’s feasibility study, however, found that there may be up to 40 MW of capacity available. Therefore, the City believes that some form of ESA as part of the energy delivery system may be necessary or possible in the short-term. Due to the uncertainty of available capacity on IID transmission, required capacity upgrades, and the ability to utilize IID’s OATT to provide electricity and capacity to the City, prospective providers that desire to use an ESA as part of the energy delivery system should fully evaluate this issue.

In addition to the potential for an ESA as part of the energy delivery system, the City envisions the construction of generation, distribution and transmission facilities to be used and/or owned by the municipal utility. A proposed new substation on or around Harrison Street will be needed to serve load in the Auto Wrecking Zone (northern most EDZ), with an anticipated load of 30 MW. Any substation at this location would be used to serve future development of retail electric service outside the Auto Wrecking Zone. The substation would be configured for two 40 mega volt amp (“MVA”) power transformers and twelve 12.5 kV feeders.

A second proposed new substation would also be located on or around Polk Street in the Industrial Zone of the EDZ serving approximately 30 MW of new commercial load and an additional retail load within the Development Area. The station would be configured for two 40 MVA power transformers and twelve 12.5 kV feeders.

It is assumed that the design of the two substations will meet an N-1 criterion (loss of any one system component and maintain electric service). The distribution feeders should also meet this N-1 criterion to the extent financially feasible.

To address challenges associated with forecasting load growth, any energy delivery system for the municipal utility must be easily scalable to timely meet demand growth in the Development Area. As the load requirements approach the limit of available transmission capacity from IID, or overall load reaches approximately 40 to 50 MW, the City anticipates obtaining a source at SCE’s 230 kV line at or near the Coachella Valley Substation. The 20-year projected load for the City is 70 MW and the expected capacity of a 92 kV transmission line would be about 150 MW. Therefore, a 230/92 kV substation would be constructed and 92 kV lines extended to the two new substations (Harrison and Polk). The estimated distance of single pole 92 kV transmission is 7.2 miles. Approximately 3.5 miles would have a single 92 kV circuit with space for two distribution circuits on the structures. The other 3.7 miles would be double circuit 92 kV with space for two distribution circuits on the structures. A typical width for a 92 kV transmission line is 100 feet. Therefore, the loop would likely require acquisition of roughly a 50-foot strip easement. The other 50 feet will be located within the road right-of-way based on the proposed routing of the line. If at the time of construction, the load within the utility boundary is expected to exceed 150 MW, then 230 kV transmission would be warranted. CAISO approval will be required for any connection to SCE transmission.

The City further anticipates necessary distribution lines to be constructed within City limits as part of the energy delivery system in order to properly serve customer premises. 5

Coachella Development Projections

The current population of the City is approximately 42,554; however, with current planning efforts, the City is expected to grow three-fold by 2035.5

1. Municipal Utility Objectives

The objectives of the energy delivery system include, but are not limited to, the following, and should be addressed by the proposal:

A. Development of local clean, reliable energy generation. This RFP does not require a specific technology. The City anticipates, however, that the construction of generation facilities could consist of a combination of natural gas, solar and battery energy storage up to approximately 49 MW. Generation must meet State of California renewable energy (“Renewables Portfolio Standard” or “RPS”) and resource adequacy capacity (“RA”) requirements.

B. The City anticipates that development needs could also be met in the short-term through wheeling arrangements over IID’s transmission system in accordance with IID’s OATT and an ESA or full services agreement between the City and the proposer, or a proposal with some combination of generation, distribution, transmission and/or an ESA.

C. Turnkey development and operation of local energy delivery infrastructure, including transmission and distribution facilities, substations, and control systems.

D. The energy delivery system should be capable of expansion to serve anticipated load growth in the Development Area.

E. The energy delivery system should be capable of interconnection to IID and SCE transmission systems, or have a long-term proposal to do so. If a standalone energy delivery system is proposed, consideration should be given to ancillary services.

F. The energy delivery system should be capable of delivering products and services at a high level of reliability, supporting commercial and industrial operations.

G. The generation component of the energy delivery system must comply with State of California RPS requirements, California and CAISO RA requirements, and regional air quality standards.

H. The energy delivery system must comply with all other federal and state regulatory requirements that apply.

I. The energy delivery system should facilitate delivery of products and services to municipal utility customers at competitive retail rates with a tariff structure and predictable pricing forecasts.

J. The energy delivery system should allow for a project participation structure, financing, and revenue model that insulates the City from financial and regulatory risk with no upfront cost to the City. The City does not intend to provide any financial or capital contribution to the energy delivery system project but may consider such proposals to the extent they are financially feasible (e.g., bond issuance) and project risk remains with the developer.

K. The energy delivery system should be able to deliver energy products and services sufficient to serve up to approximately 25 MW of load to the City in the next few years and be able to readily expand to timely serve additional load growth thereafter, up to approximately 50 MW.

L. City municipal utility rates in the Development Area should be comparable to or less than rates charged by IID, along with a proposed system or model for City revenue sufficient to pay for energy delivery system and provide for low rates and stabilization.

M. The City may assist with the acquisition of necessary land or rights-of-way for any generation, distribution or transmission infrastructure through the exercise of its powers of eminent domain, which would be recoverable in the proposer’s financing.

1. Coachella Partnership Structure

The City desires that the energy services described in this RFP be accomplished through a public-private partnership that includes the City and one or more investment and development partners or that the partner provide electricity and capacity through an ESA with long-term implementation of generation, distribution and transmission based on the City’s load in the Development Area.

A. The City would leverage its role as a publicly owned utility and would own any facilities at the end of the term of an agreement (with buyout options).

B. The City would otherwise control the municipal utility and energy delivery system.

C. The partner(s) would take the risk of financing the energy delivery system, and where applicable, meeting all federal and state regulatory requirements.

D. The partner(s) would provide the site for any facilities, where applicable.

Proposals will ultimately include the financing, design, construction, and operation of one or more generating facilities, a distribution and transmission system, and/or a combination of an ESA.

5. Content of RFP Proposals

Proposals should address the following points and be presented largely in the outline format provided below. A submission must include a complete and detailed proposal regarding the proposer’s interest in the financing, design, construction, operation and maintenance of an energy delivery system.

5.1 Submission Outline

A. Executive Summary

1. Summarize the qualifications and interest in a narrative format.

B. City’s Objectives

1. Demonstrate that the provider understands the City’s objectives and the desired energy delivery system.

C. Development Team

1. Describe the development team and identify the consultants who would support the development team.

2. Describe the development team’s interest in this project.

3. Provide an organization chart for the development team. Provide resumes for each member of the proposed development team.

D. Experience

1. Describe the development team’s qualifications and experience in designing, financing, constructing, and operating generation, distribution and transmission systems, and selling electricity and capacity.

2. Describe the development team’s experience with working with publicly owned utilities and the formation and implementation of a municipal utility.

3. If the provider intends to sell electricity and/or capacity to the City through an ESA, describe the provider’s experience as an energy supplier.

4. Describe up to three examples of specific projects the team, or members of the team, have completed, including project name and address. Describe the team’s role in each project.

a. Include any experience with local projects, projects in California, projects in the Western Electricity Coordinating Council region, or in other areas of the United States.

b. Include experience working with IID, SCE, CAISO and any applicable federal or state regulatory agencies.

c. Include experience working in partnership with local governments and publicly owned utilities.

d. Include experience in land use, regulatory, entitlement, and permitting processes, including water quality, air quality and other environmental experience and with California Environmental Quality Act (“CEQA”) review.

e. Include experience in the financing of generation, distribution or transmission projects.

5. Describe the proposed contract structure between the development team and the City, including, but not limited to, cost (e.g., fixed fee, $/kWh, $/customer, total cost), term, financing, construction and operation and maintenance.

6. Describe the proposed collection and rate model the City would use to deliver services and collect rates sufficient to pay for the energy delivery system while maintaining customer rates comparable to or lower than IID.

7. Describe the financial strength of the company or development team. The provider must be willing to provide financial statements or other evidence of financial capability upon request of the City as part of the evaluation process should the company or development team not be a large entity or be a publically traded company.

8. Provide three references from related projects, including contact person and phone number, and brief project description.

6. Certification

A duly authorized officer or agent of the provider must sign the submission. Proposals that are unsigned will not be considered. In the case where multiple team members or firms desire to submit, a signature by a duly authorized officer or agent of each entity is required, though one entity should be designated the lead entity. The lead entity will ultimately be the contracting entity and will be responsible for subcontracting with its partners.

7. Compliance With Laws

The selected provider will be required to attest to and demonstrate that it can and will comply with the following federal and state requirements:

7.1 Government Claims Act . Pursuant to Government Code section 5956.8, the Project will be deemed to be public property for purposes of identification, maintenance, enforcement of laws and for purposes of the Government Claims Act (Gov. Code § 810 et seq.).

7.2 Labor Code . The Project will be constructed as and deemed to be “public works” as governed by the California Labor Code and will comply with the provisions thereof (Labor Code § 1720 et seq.).

7.3 Renewables Portfolio Standard . As a California municipal utility, the City will need to comply with State of California RPS requirements as governed and enforced by the California Energy Commission.

7.4 Resource Adequacy . As a California load serving entity, the City will be required with State of California Resource Adequacy Capacity requirements.

7.5 Balancing Authority Requirements . IID is the balancing authority in the eastern Coachella Valley and the City may be subject to certain regulations. In addition, energy purchased through an ESA by the proposer should also be familiar with CAISO requirements, where applicable.

7.6 Federal Energy Regulatory Commission . The transmission component of the energy delivery system will be subject to FERC or other balancing authority regulations.

7.7 California Environmental Quality Act . The City will be the lead agency under CEQA for the energy delivery system project. The provider, however, will be expected to prepare all required environmental documents for the City’s review and certification.

7.8 Resource Agencies. The provider will comply with all applicable federal and state resource agency requirements, including, but not limited to, South Coast Air Quality Management District, Colorado River Basin Regional Water Control Board, federal and state Fish & Wildlife, and U.S. Army Corps of Engineers.

8. Conflict of Interest

In accordance with Government Code section 5956.5, this RFQ/RFP process specifically prohibits practices that may result in unlawful activity, including, but not limited to, rebates, kickbacks, or other unlawful consideration as well as prohibits City officials and employees from participating in the selection process when those employees have a relationship with a person or business entity seeking a contract through the City’s solicitation process that would subject the City officials or employees to the prohibition of Government Code section 87100. 10

Any person or entity submitting interest and qualifications hereunder must attest, under penalty of perjury, that no official or employee of the City, nor any business entity in which an official of the City has an interest, has been employed or retained to solicit or aid in the procuring of any contract that may result from this RFQ/RFP process, nor that any such person will be employed in the performance of such a contract without immediate written disclosure of such fact to and consent by the City at its sole discretion.

In addition, proposals must disclose any existing financial or other interests that they may have in the Development Area. The failure to comply with this Conflict of Interest section is immediate grounds for the City’s rejection of a proposal and termination of pre-qualifications or a future contract thereby.

9. Evaluation Criteria

All proposals will be screened by the City and its selection team based on the criteria in this Section 9, which criteria are listed in no particular order. The selection process will include an interview of one or more candidates, and the terms of any deal resulting from this process will be memorialized in writing in a legal instrument.

A. Quality of response.

B. Experience of project team.

C. Familiarity with electric service issues in the City.

D. References.

E. Financial strength of provider.

F. Costs to City.

G. Customer rate model.

10. Submission

Proposals must be submitted to the City no later than March 3, 2025, 5:00 p.m. Pacific Prevailing Time. Proposals are limited to those firms that participated in the Request for Qualifications, dated October 22, 2024, and that has been pre-qualified and selected by the City to proceed to the RFP stage.

Proposals received after the deadline may not be considered in the sole discretion of the City. One complete electronic version is required. Faxed proposals will not be accepted. Proposers assume the risk of the methods of dispatch or delivery chosen.

Proposals must be electronically submitted through Best Best & Krieger LLP’s Collaborate site for the “City of Coachella Electric Utility RFP” (“Collaborate Site”). For access to the Collaborate Site, please send an email to Richard.Martinez@bbklaw.com and Timothy.Lyons@bbklaw.com with (1) your name, (2) the firm you represent, and (3) a request for access to the Collaborate Site. You will thereafter receive an email invitation to register, if you have not already done so, and to join the Collaborate Site. You must upload your proposal to the Collaborate Site using the “Upload” feature and all electronic files must be submitted in 11 editable format to facilitate evaluation and planning. Word, Excel, GIS and PDF formats are acceptable.

11. Administrative Issues Availability of the RFP and Amendments

11.1 Availability of the RFP and Amendments

This RFP is available on the City’s website at https://www.coachella.org/services/proposals-bids. Any addendums or amendments supersede prior provisions and are effective upon posting, and each potential provider is responsible for checking these sources to learn of any amendments.

11.2 Questions about the RFP

All general correspondence and any questions about this RFP must be submitted to the Project Manager. The last date for questions will be on February 19, 2025 5:00 PPT. All questions will be considered to be public and released with an answer as expeditiously as possible. The identity of the person or company posing the question will not be disclosed. Providers should not contact the City Council or City staff about this RFP. Any attempts to contact the City regarding this RFP other than through the process described herein may be grounds for the City to reject a proposal.

12. Clarification of Proposals

Notwithstanding any other provision of this RFP, the City reserves the right to:

A. Conduct discussions with any or all potential providers for the purpose of clarification of the RFP;

B. Request supplemental information regarding any submission as part of the evaluation process;

C. Waive, or decline to waive, any defect in any submission;

D. Cancel or amend this RFP or issue other requests for qualifications or proposals; or

E. Select no proposals at all.

13. Commencement of Work

Any proposals in response to this RFP, and the subsequent evaluation of that response by the City, does not constitute a contract or any type of agreement between the City and any provider for the commencement of work or the performance of any obligation. Only a written contract with the City will authorize the commencement of work or obligate the City on this Project.12

14. Use of Subcontractors

Proposals may include use of sub-contractors or sub-consultants to fulfill any obligations in connection with the energy delivery system project. Use of sub-contractors or sub-consultants shall be subject to all applicable state and federal laws. A selected provider shall remain liable for fulfilling all its obligations on the energy delivery system project, and for any claims or damages arising from the sub-contractor’s or sub-consultant’s work.

15. Submission Costs

Providers that provide proposals in response to this RFP are responsible for all expenses incurred in preparing and submitting a proposal, or in contract negotiations with the City. Even if the City elects to reject all proposals, the City will not be liable for any costs or damages incurred by any provider in submitting hereunder or preparing and submitting a proposal or negotiating a contract.

16. Errors and Omissions in a Submission

A provider is responsible for all errors and omissions in its proposal. If it discovers an error and wishes to withdraw its proposal, the provider should notify the City immediately.

17. Errors and Omissions in the RFP

If the City becomes aware of an error or omission in the RFP, it will post a notice on the project website. If it discovers an error or omission after proposals are submitted, it may in its discretion proceed or reissue the RFP. Even if it elects to re-issue the RFP, the City will not be liable for any costs or damages incurred by any entity in preparing and submitting the original statement of interest and qualifications.

18. No Waiver of RFP Provisions

The City may, but is under no obligation to, waive any provision in this RFP at the request of a potential provider. Any such waiver shall apply to all potential providers, and no waiver shall constitute a waiver of any provision not specifically referenced therein.

19. Ownership and Confidentiality of Proposals

The City will not pay for any information requested herein, and all proposals become the property of the City. Proposals will not be returned and may be subject to disclosure pursuant to the California Public Records Act. The City may receive information that may be confidential as part of your proposal. If you believe that any portion of your submission includes proprietary or other confidential information, please clearly mark it as such and state the basis for your claim to confidential treatment. Unless otherwise required by law, the City will treat the information as confidential and will not disclose it to a third party without your permission. Information that is an integral part of the submission will likely not be considered confidential after an award of contract has been made.

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