HomeMy WebLinkAbout11-11 i,
Resolution No. 11-11
RESOLUTION
AUTHORIZING EXECUTION OF AN AGREEMENT
WITH ORENCO HYDROPOWER FOR
A HYDROPOWER FEASIBILITY STUDY
FOR THE KIMBALL STREET DAM
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that
Sean R. Stegall, City Manager, and Diane Robertson, City Clerk, be and are hereby authorized and
directed to execute an Agreement with ORENCO Hydropower on behalf of the City of Elgin for a
hydropower feasibility study for the Kimball Street dam, a copy of which is attached hereto and
made a part hereof by reference.
s/Ed Schock
Ed Schock, Mayor
Presented: January 12, 2011
Adopted: January 12, 2011
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/Diane Robertson
Diane Robertson, City Clerk
AGREEMENT
THIS AGREEMENT is made and entered into this 15th day of December, 2010, by and
between the CITY OF ELGIN,an Illinois municipal corporation(hereinafter referred to as"CITY")
and ORENCO Hydropower,a Delaware Corporation(hereinafter referred to as"CONSULTANT").
WHEREAS,the CITY desires to engage the CONSULTANT to furnish certain professional
services in connection with the feasibility study of incremental hydropower at the Kimball St.Dam
(hereinafter referred to as the"PROJECT");and
WHEREAS,the CONSULTANT represents that it is in compliance with Illinois Statutes
relating to professional registration of individuals and has the necessary expertise and experience to
furnish such services upon the terms and conditions set forth herein below.
NOW,THEREFORE,it is hereby agreed by and between the CITY and the CONSULTANT
that the CITY does hereby retain the CONSULTANT for and in consideration of the mutual
promises and covenants contained herein, the sufficiency of which is hereby acknowledged to
perform the services relating to the PROJECT as described herein,subject to the following terms and
conditions and stipulations,to-wit:
1. SCOPE OF SERVICES
A. All work hereunder shall be performed under the direction of the Water Director of
the CITY,herein after referred to as the"DIRECTOR".
B. The CONSULTANT shall provide the following services for the PROJECT pursuant
to this Agreement:
1. Develop the initial proposed project design.
2. Develop a preliminary estimate of the project capital cost for that design.
3. Evaluate the financial benefits costs of the project.
4. Verify with the FERC that there are no known major roadblocks to the
project.
5. Develop a financial risk analysis on the project.
6. Begin to identify the important issues and tradeoffs from key stakeholders
7. Provide a written report to the City Council summarizing the results of the
project.
C. A Scope of Services for the PROJECT is set forth in CONSULTANT'S letter of
October 4,2010,as revised,consisting of three(3)pages and is attached hereto and
made a part hereof as Exhibit A. In the event of any conflict in the terms of this
Agreement and the provisions in Exhibit A, the terms of this Agreement shall
supersede and control.
2. SCHEDULE
A. CONSULTANT shall complete the services to be provided pursuant to this
Agreement within sixty(60)days of the date the CONSULTANT is given a notice to
proceed by the CITY.
B. The CONSULTANT will submit to the DIRECTOR monthly a status report keyed to
the project schedule.A brief narrative will be provided identifying progress,findings
and outstanding issues.
3. WORK PRODUCT
A. All work product prepared by the CONSULTANT pursuant hereto including,but not
limited to,reports,plans,designs,calculations,work drawings,studies,photographs
and recommendations, except as outlined below in Section 3 Paragraphs B and C,
shall be the property of the CITY and shall be delivered to the CITY upon request of
the DIRECTOR;provided,however,that the CONSULTANT may retain copies of
such work product for its records. CONSULTANTS execution of this Agreement
shall constitute CONSULTANTS conveyance and assignment of all right,title and
interest,including but not limited to any copyright interest,by the CONSULTANT to
the CITY of all such work product prepared by the CONSULTANT pursuant to this
Agreement. The CITY shall have the right either on its own or through such other
consultants as determined by the CITY to utilize and/or amend such work product.
Any such amendment to such work product shall be at the sole risk of the CITY.
Such work product is not intended or represented to be suitable for reuse by the CITY
on any extension to the PROJECT or on any other project,and such reuse shall be at
the sole risk of the CITY without liability or legal exposure to the CONSULTANT.
B. Notwithstanding the above,CONSULTANT'S unique designs for intake structures
and turbine designs shall remain the sole property of CONSULTANT.
CONSULTANT grants the CITY a perpetual, nontransferable license to use the
designs for its own use;however,the model must not be sold or transferred outside of
the CITY's organization.
C. Notwithstanding the above, CONSULTANT'S proprietary software models shall
remain the sole property of CONSULTANT. CONSULTANT grants the CITY a
perpetual,nontransferable license to use and make derivative works of the software
model for its own use;however,the model must not be sold or transferred outside of
the CITY's organization. All CITY data incorporated into the software model
remains exclusive property of the CITY and will be treated as confidential
information by CONSULTANT.
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4. PAYMENTS TO THE CONSULTANT
A. For services provided the CONSULTANT shall be the total fee not to exceed
$25,000 regardless of the actual costs incurred by the CONSULTANT unless
substantial modifications to the scope of the work are authorized in writing by the
DIRECTOR.
B. Expenses related to travel and third party research and support will also be assessed
and shall not exceed$3,750.
C. Upon entry into this Agreement and CONSULTANT being given a notice to proceed,
CONSULTANT will submit an initial invoice of$10,000 as a deposit to be credited
against the final bill.
D. The CITY shall make periodic payments to the CONSULTANT based upon actual
progress within thirty(30)days after receipt and approval of invoice.
5. INVOICES
A. The CONSULTANT shall submit invoices in a format approved by the CITY.
Progress reports(2C above)will be included with all payment requests.
B. The CONSULTANT shall maintain records showing actual time devoted and cost
incurred. The CONSULTANT shall permit the authorized representative of the
CITY to inspect and audit all data and records of the CONSULTANT for work done
under this Agreement. The CONSULTANT shall make these records available at
reasonable times during the Agreement period and for one(1)year after termination
of this Agreement.
6. TERMINATION OF AGREEMENT
Notwithstanding any other provision hereof,the CITY may terminate this Agreement at any
time upon fifteen(15)days prior written notice to the CONSULTANT.In the event that this
Agreement is so terminated, the CONSULTANT shall be paid for services actually
performed and reimbursable expenses actually incurred prior to termination, except that
reimbursement shall not exceed the task amounts set forth under Paragraph 4 above.
7. TERM
This Agreement shall become effective as of the date the CONSULTANT is given a notice to
proceed and, unless terminated for cause or pursuant to Paragraph 6, shall be deemed
concluded on the date the CITY determines that all of the CONSULTANTS work under this
Agreement is completed. A determination of completion shall not constitute a waiver of any
rights or claims which the CITY may have or thereafter acquire with respect to any term or
provision of this Agreement.
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S. NOTICE OF CLAIM
If the CONSULTANT wishes to make a claim for additional compensation as a result of
action taken by the CITY,the CONSULTANT shall give written notice of his claim within
fifteen(15)days after occurrence of such action. No claim for additional compensation shall
be valid unless so made. Any changes in the CONSULTANT'S fee shall be valid only to the
extent that such changes are included in writing signed by the CITY and the
CONSULTANT. Regardless of the decision of the DIRECTOR relative to a claim submitted
by the CONSULTANT, all work required under this Agreement as determined by the
DIRECTOR shall proceed without interruption.
9. BREACH OF CONTRACT
If either party violates or breaches any term of this Agreement,such violation or breach shall
be deemed to constitute a default, and the other party has the right to seek such
administrative,contractual or legal remedies as may be suitable to the violation or breach;
and, in addition,if either party,by reason of any default,fails within fifteen(15)days after
notice thereof by the other party to comply with the conditions of the Agreement,the other
party may terminate this Agreement. Notwithstanding the foregoing,or anything else to the
contrary in this Agreement, with the sole exception of an action to recover the monies the
CITY has agreed to pay to the CONSULTANT pursuant to Paragraph 4 hereof, no action
shall be commenced by the CONSULTANT against the CITY for monetary damages.
10. INDEMNIFICATION
To the fullest extent permitted by law,CONSULTANT agrees to and shall indemnify,defend
and hold harmless the CITY,its officers,employees,agents,boards and commissions from
and against any and all claims, suits,judgments, costs, attorneys fees, damages or other
relief,including,but not limited to,workers compensation claims,in any way resulting from
or arising out of negligent actions or omissions of the CONSULTANT in connection
herewith,including negligence or omissions of employees or agents of the CONSULTANT
arising out of the performance of this Agreement. In the event of any action against the
CITY,its officers,employees,agents,boards or commissions,covered by the foregoing duty
to indemnify,defend and hold harmless such action shall be defended by legal counsel of the
CITY'S choosing. The provisions of this paragraph shall survive any expiration,completion
and/or termination of this Agreement.
11. NO PERSONAL LIABILITY
No official,director,officer,agent or employee of the CITY shall be charged personally or
held contractually liable under any term or provision of this Agreement or because of their
execution, approval or attempted execution of this Agreement.
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12. INSURANCE
A. Comprehensive Liability. The CONSULTANT shall provide,pay for and maintain
in effect, during the term of this Agreement, a policy of comprehensive general
liability insurance with limits of at least$1,000,000 aggregate for bodily injury and
$1,000,000 aggregate for property damage.
The CONSULTANT shall deliver to the DIRECTOR a Certification of Insurance
naming the CITY as additional insured. The policy shall not be modified or
terminated without thirty(30)days prior written notice to the DIRECTOR.
The Certificate of Insurance which shall include Contractual obligation assumed by
the CONSULTANT under Paragraph 10 entitled"Indemnification"shall be provided.
This insurance shall apply as primary insurance with respect to any other insurance or
self-insurance programs afforded to the CITY. There shall be no endorsement or
modification of this insurance to make it excess over other available insurance,
alternatively,if the insurance states that it is excess or prorated,it shall be endorsed
to be primary with respect to the CITY.
B. Comprehensive Automobile Liability. Comprehensive Automobile Liability
Insurance covering all owned,non-owned and hired motor vehicles with limits of not
less than$500,000 per occurrence for damage to property.
C. Combined Single Limit Policy. The requirements for insurance coverage for the
general liability and auto exposures may be met with a combined single limit of
$1,000,000 per occurrence subject to a$1,000,000 aggregate.
D. , Professional Lia ' ' . The CONSULTANT 1 carry CONSULWS
Professio ' ility Insurance Covering • s resulting from error,omissions or
negl' t acts with a combined • e limit of not less than;$-1,000,000 per 1:7r
4
currence. A Certificate of Insurance shall be submitted to-thie DIRECTOR as '
evidence of insurance refection. The policy shall not modified or terminated
without thirty(30)s prior written notice to the DIRECTOR .
13. CONSTRUCTION MEANS,METHODS,TECHNIQUES,SEQUENCES,
PROCEDURES AND SAFETY
The CONSULTANT shall not have control over or charge of and shall not be responsible for
construction means,methods,techniques,sequences or procedures,or for safety precautions
and programs in connection with the construction,unless specifically identified in the Scope
of Services.
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14. NONDISCRIMINATION
In all hiring or employment made possible or resulting from this Agreement,there shall be no
discrimination against any employee or applicant for employment because of sex,age,race,
color,creed,national origin,marital status,of the presence of any sensory,mental or physical
handicap, unless based upon a bona fide occupational qualification, and this requirement
shall apply to, but not be limited to, the following: employment advertising, layoff or
termination,rates of pay or other forms of compensation and selection for training,including
apprenticeship.
No person shall be denied or subjected to discrimination in receipt of the benefit of any
services or activities made possible by or resulting from this Agreement on the grounds of
sex,race,color,creed,national origin,age except minimum age and retirement provisions,
marital status or the presence of any sensory,mental or physical handicap. Any violation of
this provision shall be considered a violation of a material provision of this Agreement and
shall be grounds for cancellation, termination or suspension, in whole or in part, of the
Agreement by the CITY.
15. ASSIGNMENT AND SUCCESSORS
This Agreement and each and every portion thereof shall be binding upon the successors and
the assigns of the parties hereto; provided, however, that no assignment shall be made
without the prior written consent of the CITY.
16. DELEGATIONS AND SUBCONTRACTORS
Any assignment,delegation or subcontracting shall be subject to all the terms,conditions and
other provisions of this Agreement and the CONSULTANT shall remain liable to the CITY
with respect to each and every item,condition and other provision hereof to the same extent
that the CONSULTANT would have been obligated if it had done the work itself and no
assignment, delegation or subcontract had been made. Any proposed subcontractor shall
require the CITY'S advanced written approval.
17. NO CO-PARTNERSHIP OR AGENCY
This Agreement shall not be construed so as to create a partnership, joint venture,
employment or other agency relationship between the parties hereto.
18. SEVERABILITY
The parties intend and agreed that,if any paragraph,sub-paragraph,phrase,clause or other
provision of this Agreement, or any portion thereof, shall be held to be void or otherwise
unenforceable,all other portions of this Agreement shall remain in full force and effect.
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19. HEADINGS
The headings of the several paragraphs of this Agreement are inserted only as a matter of
convenience and for reference and in no way are they intended to define,limit or describe the
scope of intent of any provision of this Agreement,nor shall they be construed to affect in
any manner the terms and provisions hereof or the interpretation or construction thereof.
20. MODIFICATION OR AMENDMENT
This Agreement and its attachments constitutes the entire Agreement of the parties on the
subject matter hereof and may not be changed,modified,discharged or extended except by
written amendment duly executed by the parties. Each party agrees that no representations or
warranties shall be binding upon the other party unless expressed in writing herein or in a
duly executed amendment hereof,or change order as herein provided.
21. APPLICABLE LAW
This Agreement shall be deemed to have been made in,and shall be construed in accordance
with the laws of the State of Illinois. Venue for the resolution of any disputes or the
enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane
County,Illinois.
22. NEWS RELEASES
The CONSULTANT may not issue any news releases without prior approval from the
DIRECTOR, nor will the CONSULTANT make public proposals developed under this
Agreement without prior written approval from the DIRECTOR prior to said documentation
becoming matters of public record.
23. COOPERATION WITH OTHER CONSULTANTS
The CONSULTANT shall cooperate with any other consultants in the CITY'S employ or any
work associated with the PROJECT.
24. INTERFERENCE WITH PUBLIC CONTRACTING
The CONSULTANT certifies hereby that it is not barred from bidding on this contract as a
result of a violation of 720 ILCS 5/33E et seq.or any similar state or federal statute regarding
bid rigging.
25. SEXUAL HARASSMENT
As a condition of this contract, the CONSULTANT shall have written sexual harassment
policies that include,at a minimum,the following information:
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A. the illegality of sexual harassment;
B. the definition of sexual harassment under state law;
C. a description of sexual harassment,utilizing examples;
D. the vendor's internal complaint process including penalties;
E. the legal recourse,investigative and complaint process available through the Illinois
Department of Human Rights,and the lllinois Human Rights Commission;
F. directions on how to contact the department and commission;
G. protection against retaliation as provided by Section 6-101 of the Human Rights Act.
A copy of the policies shall be provided by CONSULTANT to the Department of Human
Rights upon request 775 ILCS 5/2-105.
26. INTENTIONALLY OMITTED.
27. WRITTEN COMMUNICATIONS
All recommendations and other communications by the CONSULTANT to the DIRECTOR
and to other participants which may affect cost or time of completion, shall be made or
confirmed in writing. The DIRECTOR may also require other recommendations and
communications by the CONSULTANT be made or confirmed in writing.
28. NOTICES
All notices, reports and documents required under this Agreement shall be in writing and
shall be mailed by First Class Mail,postage prepaid,addressed as follows:
A. As to the CITY:
Kyla B.Jacobsen
Water Director
City of Elgin
150 Dexter Court
Elgin,Illinois 60120-5555
B. As to the CONSULTANT:
Mark Matousek
ORENCO Hydropower
745 Emerson St.
Palo Alto, CA 94301
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29. COMPLIANCE WITH LAWS
Notwithstanding any other provision of this AGREEMENT it is expressly agreed and
understood that in connection with the performance of this AGREEMENT that the
CONSULTANT shall comply with all applicable Federal,State,City and other requirements
of law,including,but not limited to,any applicable requirements regarding prevailing wages,
minimum wage, workplace safety and legal status of employees. Without limiting the
foregoing, CONSULTANT hereby certifies, represents and warrants to the CITY that all
CONSULTANTS employees and/or agents who will be providing products and/or services
with respect to this AGREEMENT shall be legal residents of the United States.
CONSULTANT shall also at its expense secure all permits and licenses,pay all charges and
fees and give all notices necessary and incident to the due and lawful prosecution of the
work, and/or the products and/or services to be provided for in this AGREEMENT. The
CITY shall have the right to audit any records in the possession or control of the
CONSULTANT to determine CONSULTANTS compliance with the provisions of this
paragraph. In the event the CITY proceeds with such an audit the CONSULTANT shall
make available to the CITY the CONSULTANTS relevant records at no cost to the CITY.
CONSULTANT shall pay any and all costs associated with any such audit.
IN WITNESS WHEREOF,the parties hereto have entered into and executed this agreement
effective as of the date and year first written above.
CITY OF ELGIN:
/ /
By: �/. G` /�✓,� .✓
S I Stegall,City Manager /
Attest:
City Clerk
CONSULTANT:
By: ZA/4- _ C ( s f t�2��. 1 2 1 1 1 110
Y�
Name/Print: arl Spetzler
Title: Chairman and CEO
F;V.egal DepMgreeanent\ORENCO Hydropower- lean-12-10-10.doc
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ARENCO
Nxiroc
745 Emerson.Palo Alto.CA 94301
www.oronoohydto.cwn
650-475-4467
October 4,2010
Mr. Sean Stegall
City Manager
Ms. Kyla Jacobsen
Water Director
City of Elgin
150 Dexter Ct.
Elgin,IL 60120
Dear Sean and Kyla:
It was a pleasure talking to you and discussing the opportunity to develop hydropower capabilities
at the Kimball Street Dam.We are excited by your commitment to proceed with the feasibility
study on the project.This revised proposal for that study reflects your request to include an initial
assessment of the important stakeholder issues that will need to be considered in the development
of the project.
Background
Hydropower is one of the most attractive forms of renewable energy available energy in the US. It
is usually much more attractive economically than wind or solar. There are currently 77,000 dams
in the US that do not currently have power generation capabilities. ORENCO Hydropower Inc. is
focused on bringing environmentally-friendly power generating capability to these dams and
capturing this otherwise wasted renewable energy. ORENCO Hydropower management has
designed and engineered 46 small hydro projects. I have attached a short summary of our
qualifications in Attachment 1.
Elgin's Kimball Street dam provides the City of Elgin a unique opportunity to be a leader in green
renewable energy development.The dam enables adding a 750kW hydropower turbine/generator
that will produce about 3,285 MWhs per year(about 1%of Elgin's residential customers'usage),
and reduce local carbon emissions by about 5.5 million pounds per year.
This proposal outlines the work that ORENCO Hydropower Inc. will do for the City of Elgin to
verify the feasibility and attractiveness of the opportunity. As we discussed,this feasibility study
will include the following.
1) Develop the initial proposed project design.
Exhibit A
ORNECO Hydropower Inc.will outline the 2-3 potential project design approaches,to
solicit the City's preferences on project design,location,and appearance. Based on the
City's preferences,we will develop a proposed project design that includes the project's
technical design(turbine,generation,control system, inlet/outlet structure,electrical
interconnection,etc.), location,size,and appearance.
2) Develop a preliminary estimate of the project capital cost for that design.
We will develop a revised preliminary cost estimate for the project based on the design
developed in Step 1. This will include a quote a preliminary quote on detailed engineering,
civil engineering,equipment procurement,construction and testing/start-up costs.
3) Evaluate the financial benefits costs of the project.
A hydropower project of this nature creates several sources of revenue. The primary one is
the energy created from the plant,but will likely also include other benefits that usually can
be sold to a local utility or energy service company,including:capacity, ancillary services
(voltage support,reactive power, spinning reserve),renewable energy credits, CO2 offsets,
etc. ORENCO Hydropower Inc.will work with our partner Strategic Decisions Group
(SDG--experts in power markets and generation asset valuation,and who are highly
familiar with how Exelon/Commonwealth Edison/PJM prices these services)to estimate
the projects future revenues from all sources.
In addition,the project is likely to create other benefits that we will estimate in the
analysis,such as reduction in the City's annual maintenance cost of the dam,due to a
reduction in the cavitation damage caused by the smaller amount of water that will be
flowing over the dam.
ORENCO and SDG will combine these projected revenues,cost savings and the project
operating and maintenance costs to produce an overall analysis of the annual project
benefits.
In addition,we will work with you to assess any other intangible costs and benefits. An
example of this is the reduction in risk to swimmers and boaters,which will result from
reducing the dangerous conditions behind the dam due again to the smaller amount of
water that will be flowing over the dam. This reduces the turbulence which decreases the
likelihood of a swimmer or a boat being caught in the turbulence.Another is the impact on
fish caused by the turbine.Fish impacts are usually relatively minor given the fish screens
stop large fish entering the turbine and small fish are capable of swimming through the
relatively slow moving turbine blades.
4) Verify with the FERC that there are no known major roadblocks to the project.
We will also have direct discussions with the Federal Energy Regulatory Agency(FERC —
the agency that will need to license the project)to identify if there are major issues that can
significantly impact the project's cost or significantly delay the licensing process.
We will also clarify the likely requirements and timing of the FERC licensing process,
which includes a number of studies and environmental reviews and public hearings that
will have to be performed before FERC issues a license for the project.
•
5) Develop a financial risk analysis on the project.
ORENCO and SDG will also perform an evaluation of the key uncertainties that can
influence both projects costs and benefits,and develop a financial risk analysis of the
project, including those identified in the other steps of this engagement.
6) Begin to identify the important issues and tradeoffs from key stakeholders
In order to clarify the key issues from various stakeholders,we propose to first interview
experts within the City to identify who are the key stakeholders in the region. These
discussions should also begin to identify the issues that these experts expect the
stakeholders to have regarding the project.These discussions should also help to clarify the
key value metrics that should be considered in assessing the project(e.g.,project
development costs,appearance,cost of renewable energy,change in safety risks at the
dam, maintenance cost of the dam,enhanced fish passage,water quality,etc.).
Given this background,we would propose to facilitate a meeting of selected stakeholders
to assess which issues they see as important as well as identifying the value metrics to be
considered in developing the project. The goal is not to resolve to the issues,but only to
clarify those that will likely influence the project design,cost and benefits,as well as to
begin to understand the value tradeoffs that will need to be considered.
7) Provide the findings of the Study to the City Staff and the City Council.
Terms and Conditions
The professional fees for this feasibility analysis are $25,000,and will be performed over about 4
weeks.
Expenses for air travel, subsistence,transportation.,communication,third-party research, and
support are additional and will be invoiced to you as incurred. These expenses are estimated to be
approximately 15%of the professional fees. ORENCO Hydropower Inc.will make every effort to
jointly manage the effort as cost-effectively as possible.
At your discretion,you may terminate any part of this agreement at any time,and we would
invoice you for the professional fees accrued to the time of termination. We will bill you every
four weeks and payment is due upon receipt. Upon receipt, ORENCO Hydropower Inc.will
submit an initial invoice of$10,000 as deposit to be credited against the final bill.4111111MMT ViVit
We look forward to working with you and your colleagues in making Elgin a leader in developing
an attractive source of renewable energy in an environmentally friendly manner.
Sincerely,
Mark Matousek
Vice Chairman
ORENCO Hydropower Inc.
475 Emerson St.
Palo Alto, CA 94301
Attachment 1
Statement of ORENCO Hydropower Inc.Qualifications
ORENCO Hydropower Inc.was formed this year,but ORENCO Hydropower Inc. has been in
existence for 31 years,and has designed and engineered 46 small hydropower projects that have
been completed. Most of these projects are in the US,with additional projects in China and Latin
America.
ORENCO has exclusive distribution arrangements with Chinese hydro engineering/manufacturing
firms whose costs have been about 40%less than US,Canadian or European vendors,and whose
reliability has have been demonstrated over ORENCO's 40-year history.
The size of ORENCO projects range from 0.01MW to over 30MW
•
ORENCO Projects by Size
30
25
I
20
15 —
10-
5.
III ins----•___
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BeIke CA CA CA CO OR D CA CA 1) CA CA CA CA CA?
NM NM CA WA WA CA CA CO CO CO D UT UT CA WI CA
Location
Project Types
• Development of new dams
• Addition of hydropower capability to existing dams
• Retrofit/refurbishment of existing hydropower facilities
• Addition of hydropower to municipal water treatment systems
Project Team Qualifications
• Mr. Mark Matousek is the Founder and Vice Chairman at ORENCO Hydropower Inc. He
was Managing Director of Strategic Decisions Group's Energy and Environment Practice,
President of Power Management Associates, Vice President of Marketing and Business
Development at Energy Systems Engineers(developers of 10-30MW standby power systems),
Technical Supervisor at Bell Laboratories in new venture management, and a Stanford Fellow
at the US Senate Commerce Committee (developing legislation to maximize the benefits of
Federally funded research). During the decade he spent as managing director of energy and
environment practice at one of the leading corporate strategy consulting firms he worked with
electric
utilities on generation strategy, asset valuation, market price forecasting, and optimizing
capital investments across their businesses. He also founded a highly successful joint venture
in Japan with Mizuho Securities providing strategy consulting to Japanese utilities. ORENCO
Hydropower Inc. is a renewable energy development company, committed to bring low-cost
renewable power generation capability to many of the 77,000 dams in the US that have do not
have generating capability.
• Dr. Alexander Tseng is the president of ORENCO, a division of Tseng Enterprise Inc, Palo
Alto,California USA. He is also a founder and head of engineering of ORENCO Hydropower
Inc. For the past 30 years ORENCO has engineered and helped develop 46 small and medium
hydro electric power plants in USA, Central America and China. Most stations are equipped
with US made SCADA systems and selected Chinese made hydro turbine-generator units for
non-attendant operation. Dr. Tseng was the Chief Electrical Engineer at Stanford Linear
Accelerator Center, Stanford University for nearly two decades. He lectured at the University
of California, Berkeley and the University of Guatemala on how to develop, build and operate
small hydro electric plants. He served as Consulting Engineer for large energy converting and
generation plants in USA, Canada, Korea, Philippine, China, Brazil, Belize and Guatemala.
Dr,Tseng is registered professional engineers in seven states of USA.
• Mr. Naoki Shimoda leads the Energy & Environment Practice at SDG. He has extensive
experience in strategy development for electric power and gas utilities, and is an industry
expert in the valuation of generation assets, risk management, and environmental strategy. Mr.
Shimoda has been the project leader on many large, complex projects with 10-40 person teams
from many organizations. In addition, Mr. Shimoda has experience in all aspects of the power
generation business,as well as environmental strategy, R&D strategy,portfolio evaluation, and
business strategy development in a variety of industries, including pharmaceutical,oil and gas,
electronics, and automotive. Mr. Shimoda also was SDG's leader of their successful joint
venture in Japan with Mizuho Securities that amongst other projects developed the market
price forecasting capabilities for most of the large Japanese utilities. Before joining SDG, Mr.
Shimoda was a systems engineer at Nippon Telegraph and Telephone Corporation (NTT). Mr.
Shimoda received a BS in electronics and telecommunications from Waseda University in
Tokyo and an MS in Engineering-Economic Systems from Stanford University.
•
lb h
Report to Mayor& Members of City Council E LG I N
- THE CITY IN THE SUBURBS
MEETING DATE: December 1, 2010
INITIATIVE D: Feasibility Study for Hydropower at Kimball Street Dam
COMMUNITY GOAL
• River As A Resource: Maximizing the potential of the Fox River
OBJECTIVE
• To authorize ORENCO Hydropower to conduct an assessment of the Kimball
Street Dam and its hydroelectric capabilities and the associated revenue
generating potential to the city
PURPOSE
• To evaluate the viability of providing a safer dam, protecting the dam's long
term stability, generating electricity and create a revenue stream
rik RECOMMENDATION
• Authorize staff to execute an agreement with ORENCO Hydropower for the
services necessary to conduct a hydropower feasibility study for the Kimball
Street Dam
BACKGROUND
Hydropower is considered by many to be one of the most attractive forms of renewable energy
available in the United States. There are currently 77,000 dams in the U.S. that do not currently
have power generation capabilities. Elgin's Kimball Street dam may provide the city with a
unique opportunity to be a leader in green renewable energy development. According to a
preliminary study completed in 2006 by engineering students at the Illinois Institute of
Technology (IIT), the dam could accommodate adding a 750kW hydropower turbine/generator
that has the potential to produce about 3,285 MWhs per year (about 1 percent of Elgin's
residential customers' usage) and reduce local carbon emissions by about 5.5 million pounds
per year..
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OPERATIONAL ANALYSIS
ORENCO Hydropower proposes a comprehensive approach for analyzing the dam's potential.
First, it will develop the initial proposed project plan to solicit the city's preferences on project
design, location and appearance. ORENCO will then develop preliminary cost of construction for
such a project and determine the long-term energy savings. The potential for energy savings
will be evaluated against the estimated construction costs to install a hydropower
turbine/generator. ORENCO Hydropower will also work closely with the regulatory agencies to
explore any potential obstacles.
INTERESTED PERSONS CONTACTED
The Alternative Energy Working Group of the Elgin Sustainable Master Plan has been reviewing
the work done by the IIT students and recommends that the feasibility of constructing a
hydropower facility at the Kimball Street Dam be further studied. As part of the study, ORENCO
will contact major stakeholders including, but not limited to, the Illinois Department of Natural
Resources (IDNR), the Fox River Study Group (FRSG), Friends of the Fox River (FOFR), the Fox
River Ecosystem Partnership (FREP) and the Army Corps of Engineers.
FINANCIAL ANALYSIS
The base cost for this feasibility analysis is $25,000. Expenses related to travel and third party
research and support will also be assessed and are estimated to be 15 percent of professional
fees or $3,750. Sufficient funds have been appropriated in the proposed 2011 Water Fund
budget, account number 401-4002-771.30-99, "miscellaneous professional services" to award
this contract to ORENCO Hydropower. A hydropower project of this nature creates several
sources of revenue. The primary source of revenue is the energy created from the plant. The
energy can be used by the city or sold back to the local utility. Other revenues are the
renewable energy credits, which also can be sold to local utility company and the greenhouse
gas emission reduction credits.
BUDGET IMPACT
FUND(S) ACCOUNT(S) PROJECT#(S) AMOUNT AMOUNT
BUDGETED AVAILABLE
Water Fund 401-4002-771.30-99 N/A $31,100 28,770
LEGAL IMPACT
None.
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e""' ALTERNATIVE COURSES OF ACTION
The city council may choose not to authorize staff to execute an agreement with ORENCO
Hydropower for the services necessary to conduct a hydropower feasibility study for the
Kimball Street Dam
NEXT STEPS
1. Execute engineering services agreement
2. Complete design and cost estimates
3. Engage local stakeholders
4. Present findings to city council
Prepared by: Kyla B.Jacobsen, Water Director
Reviewed by: Colleen Lavery, Chief Financial Officer
rReviewed by: William A. Cogley, Corporation Counsel/Chief Development Officer
Final Review by: Richard G. Kozal,Assistant City Manager/Chief Operating Officer
Approved by:
1,4fifd.tegall, City M iger
ATTACHMENTS
A: Letter from ORENCO Hydropower on scope of work
B: Statement of qualifications of ORENCO Hydropower
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October 4,2010
Mr. Sean Stegall
City Manager
Ms. Kyla Jacobsen
Water Director
City of Elgin
150 Dexter Ct.
Elgin, IL 60120
Dear Sean and Kyla:
It was a pleasure talking to you and discussing the opportunity to develop hydropower capabilities
at the Kimball Street Dam.We are excited by your commitment to proceed with the feasibility
study on the project.This revised proposal for that study reflects your request to include an initial
assessment of the important stakeholder issues that will need to be considered in the development
411)
of the project.
Background
Hydropower is one of the most attractive forms of renewable energy available energy in the US. It
is usually much more attractive economically than wind or solar. There are currently 77,000 dams
in the US that do not currently have power generation capabilities. ORENCO Hydropower Inc. is
focused on bringing environmentally-friendly power generating capability to these dams and
capturing this otherwise wasted renewable energy. ORENCO Hydropower management has
designed and engineered 46 small hydro projects. I have attached a short summary of our
qualifications in Attachment 1.
Elgin's Kimball Street dam provides the City of Elgin a unique opportunity to be a leader in green
renewable energy development.The dam enables adding a 750kW hydropower turbine/generator
that will produce about 3,285 MWhs per year(about 1%of Elgin's residential customers'usage),
and reduce local carbon emissions by about 5.5 million pounds per year.
This proposal outlines the work that ORENCO Hydropower Inc. will do for the City of Elgin to
verify the feasibility and attractiveness of the opportunity. As we discussed,this feasibility study
will include the following.
1) Develop the initial proposed project design.
ORNECO Hydropower Inc.will outline the 2-3 potential project design approaches,to
solicit the City's preferences on project design, location,and appearance. Based on the
City's preferences,we will develop a proposed project design that includes the project's
technical design (turbine, generation, control system, inlet/outlet structure, electrical
interconnection, etc.), location, size, and appearance.
2) Develop a preliminary estimate of the project capital cost for that design.
We will develop a revised preliminary cost estimate for the project based on the design
developed in Step 1. This will include a quote a preliminary quote on detailed engineering,
civil engineering, equipment procurement, construction and testing/start-up costs.
3) Evaluate the financial benefits costs of the project.
A hydropower project of this nature creates several sources of revenue. The primary one is
the energy created from the plant, but will likely also include other benefits that usually can
be sold to a local utility or energy service company, including: capacity, ancillary services
(voltage support,reactive power, spinning reserve),renewable energy credits, CO2 offsets,
etc. ORENCO Hydropower Inc.will work with our partner Strategic Decisions Group
(SDG --experts in power markets and generation asset valuation, and who are highly
familiar with how Exelon/Commonwealth EdisonfPJM prices these services)to estimate
the projects future revenues from all sources.
In addition,the project is likely to create other benefits that we will estimate in the
analysis, such as reduction in the City's annual maintenance cost of the dam, due to a
reduction in the cavitation damage caused by the smaller amount of water that will be
flowing over the dam.
ORENCO and SDG will combine these projected revenues, cost savings and the project
operating and maintenance costs to produce an overall analysis of the annual project
benefits.
In addition, we will work with you to assess any other intangible costs and benefits. An
example of this is the reduction in risk to swimmers and boaters, which will result from
reducing the dangerous conditions behind the dam due again to the smaller amount of
water that will be flowing over the dam. This reduces the turbulence which decreases the
likelihood of a swimmer or a boat being caught in the turbulence.Another is the impact on
fish caused by the turbine. Fish impacts are usually relatively minor given the fish screens
stop large fish entering the turbine and small fish are capable of swimming through the
relatively slow moving turbine blades.
4) Verify with the FERC that there are no known major roadblocks to the project.
We will also have direct discussions with the Federal Energy Regulatory Agency(FERC —
the agency that will need to license the project)to identify if there are major issues that can
significantly impact the project's cost or significantly delay the licensing process.
We will also clarify the likely requirements and timing of the FERC licensing process,
which includes a number of studies and environmental reviews and public hearings that
will have to be performed before FERC issues a license for the project.
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5) Develop a financial risk analysis on the project.
ORENCO and SDG will also perform an evaluation of the key uncertainties that can
influence both projects costs and benefits,and develop a financial risk analysis of the
project, including those identified in the other steps of this engagement.
6) Begin to identify the important issues and tradeoffs from key stakeholders
In order to clarify the key issues from various stakeholders,we propose to first interview
experts within the City to identify who are the key stakeholders in the region. These
discussions should also begin to identify the issues that these experts expect the
stakeholders to have regarding the project.These discussions should also help to clarify the
key value metrics that should be considered in assessing the project(e.g.,project
development costs, appearance, cost of renewable energy, change in safety risks at the
dam,maintenance cost of the dam, enhanced fish passage,water quality, etc.).
Given this background,we would propose to facilitate a meeting of selected stakeholders
to assess which issues they see as important as well as identifying the value metrics to be
considered in developing the project. The goal is not to resolve to the issues,but only to
clarify those that will likely influence the project design, cost and benefits, as well as to
begin to understand the value tradeoffs that will need to be considered.
7) Provide the findings of the Study to the City Staff and the City Council.
Terms and Conditions
The professional fees for this feasibility analysis are $25,000,and will be performed over about 4
weeks.
Expenses for air travel,subsistence,transportation,communication,third-party research,and
support are additional and will be invoiced to you as incurred. These expenses are estimated to be
approximately 15%of the professional fees. ORENCO Hydropower Inc. will make every effort to
jointly manage the effort as cost-effectively as possible.
At your discretion, you may terminate any part of this agreement at any time, and we would
invoice you for the professional fees accrued to the time of termination. We will bill you every
four weeks and payment is due upon receipt. Upon receipt, ORENCO Hydropower Inc. will
submit an initial invoice of$1 0,000 as deposit to be credited against the final bill.A monthly
interest charge of 1 Y2 percent will be accrued on balances overdue by more than 30 days.
We look forward to working with you and your colleagues in making Elgin a leader in developing
an attractive source of renewable energy in an environmentally friendly manner.
Sincerely,
Mark Matousek
Vice Chairman
ORENCO Hydropower Inc.
475 Emerson St.
Palo Alto, CA 94301
Attachment 1
[ Statement of ORENCO Hydropower Inc. Qualifications
ORENCO Hydropower Inc. was formed this year,but ORENCO Hydropower Inc.has been in
existence for 31 years, and has designed and engineered 46 small hydropower projects that have
been completed. Most of these projects are in the US,with additional projects in China and Latin
America.
ORENCO has exclusive distribution arrangements with Chinese hydro engineering/manufacturing
firms whose costs have been about 40% less than US, Canadian or European vendors, and whose
reliability has have been demonstrated over ORENCO's 40-year history.
The size of ORENCO projects range from 0.01MW to over 30MW
ORENCO Projects by Size
35
30
25
20— -
10
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Belize CA CA CA CO OR ID CA CA ID CA CA CA CA CA?
NM NM CA WA WA CA CA CO CO CO ID UT UT CA W CA
Location
Project Types
• Development of new dams
• Addition of hydropower capability to existing dams
• Retrofit/refurbishment of existing hydropower facilities
• Addition of hydropower to municipal water treatment systems
Project Team Qualifications
• Mr. Mark Matousek is the Founder and Vice Chairman at ORENCO Hydropower Inc. He
was Managing Director of Strategic Decisions Group's Energy and Environment Practice,
President of Power Management Associates, Vice President of Marketing and Business
Development at Energy Systems Engineers (developers of 10-30MW standby power systems),
Technical Supervisor at Bell Laboratories in new venture management, and a Stanford Fellow
at the US Senate Commerce Committee (developing legislation to maximize the benefits of
Federally funded research). During the decade he spent as managing director of energy and
environment practice at one of the leading corporate strategy consulting firms he worked with
electric
utilities on generation strategy, asset valuation, market price forecasting, and optimizing
capital investments across their businesses. He also founded a highly successful joint venture
in Japan with Mizuho Securities providing strategy consulting to Japanese utilities. ORENCO
Hydropower Inc. is a renewable energy development company, committed to bring low-cost
renewable power generation capability to many of the 77,000 dams in the US that have do not
have generating capability.
• Dr. Alexander Tseng is the president of ORENCO, a division of Tseng Enterprise Inc, Palo
Alto, California USA. He is also a founder and head of engineering of ORENCO Hydropower
Inc. For the past 30 years ORENCO has engineered and helped develop 46 small and medium
hydro electric power plants in USA, Central America and China. Most stations are equipped
with US made SCADA systems and selected Chinese made hydro turbine-generator units for
non-attendant operation. Dr. Tseng was the Chief Electrical Engineer at Stanford Linear
Accelerator Center, Stanford University for nearly two decades. He lectured at the University
of California, Berkeley and the University of Guatemala on how to develop, build and operate
small hydro electric plants. He served as Consulting Engineer for large energy converting and
generation plants in USA, Canada, Korea, Philippine, China, Brazil, Belize and Guatemala.
Dr,Tseng is registered professional engineers in seven states of USA.
• Mr. Naoki Shimoda leads the Energy & Environment Practice at SDG He has extensive
experience in strategy development for electric power and gas utilities, and is an industry
expert in the valuation of generation assets, risk management, and environmental strategy. Mr.
Shimoda has been the project leader on many large, complex projects with 10-40 person teams
from many organizations. In addition, Mr. Shimoda has experience in all aspects of the power
generation business, as well as environmental strategy, R&D strategy,portfolio evaluation, and
business strategy development in a variety of industries, including pharmaceutical, oil and gas,
electronics, and automotive. Mr. Shimoda also was SDG's leader of their successful joint
venture in Japan with Mizuho Securities that amongst other projects developed the market
price forecasting capabilities for most of the large Japanese utilities. Before joining SDG Mr.
Shimoda was a systems engineer at Nippon Telegraph and Telephone Corporation (NTT). Mr.
Shimoda received a BS in electronics and telecommunications from Waseda University in
Tokyo and an MS in Engineering-Economic Systems from Stanford University.
A,
ELGIN
THE CITY IN THE SUBURBS-
DATE: January 27, 2011
TO: Kyla Jacobsen, Water System Superintendent
FROM: Jennifer Quinton, Deputy City Clerk
SUBJECT: Resolution No. 11-11, Adopted at the January 12, 2011, Council Meeting
Enclosed you will find the agreement listed below. Please distribute this agreement to the other
party and keep a copy for your records if you wish. If you have any questions please feel free to
contact our office 847-931-5660 and we will do our best to assist you. Thank you.
• Agreement with Orenco Hydropower for a Hydropower Feasibility Study for the Kimball
Street Dam