Good afternoon again.

Mr.

Clark.

Madam Chair, the minutes to be approved are from the Monday, June 1st, 2026 Organizational Development Standing Committee meeting.

If there are no corrections or amendments, then the minutes will be approved as presented.

Those minutes have been approved.

Thank you, Mr.

Clark.

Let's proceed with the reports for today's OD meeting.

Don Olesky Energy Program Manager Office of Sustainability.

Good afternoon.

I'm Don Olexi, the Energy Program Manager from the Office of Sustainability, and I'm here to tell you about a no-cost opportunity to get solar panels on city-owned buildings so we can both mitigate the rising electric costs and get closer to our carbon reduction goals.

We have been looking at solar power purchase agreements for over 10 years, exploring ways that we can use this as a financing mechanism.

However, legal hurdles have prevented us from pursuing this until now.

We have extra motivation right now with the expiration of the federal tax credits with up to 50% of project costs that will make these projects more economically viable, meaning we can get cheaper electricity from our own rooftops rather than we would be paying Dominion.

Staff has been working collaboratively and creatively going above and beyond the past several months to find a solution that will work for Richmond.

So in terms of the project background, the community climate collaborative partnered with us to apply to the municipal investment fund, and we are one of 48 localities selected across the country to develop a clean energy pipeline that would drive the local economy toward an investment in our workforce, uncover financing opportunities, and identify clean energy projects in the commercial, residential, and municipal sectors.

So over that period of time, over 50 stakeholder interviews were held with financing partners, solar developers and installers, representatives from the housing sector, nonprofits and faith-based institutions, workforce development advocates and specialists, and multiple city departments and state agencies.

We really did our our homework here.

What was found is that here on the city-owned buildings, we have over 10 megawatts of solar potential.

But due to the short timeline with the expiring tax credits, we would have to find a cooperative procurement to ride.

So let me tell you a little more about what is a solar power purchase agreement.

This is when a third-party solar developer installs solar at no cost to the city on our buildings, and they continue to own the array through the contract, the 25-year contract term, and then during that time we use the power generated in our own buildings and pay a rate for that electricity to the developer.

This wouldn't be budgeted separately.

This slide shows you the pros and cons of third-party ownership versus direct ownership.

Obviously, the solar company owns and operates and maintains the panels.

There's no upfront cost to the city.

Contractual simplicity, we don't have to manage subcontractors and all of the complications that can come with multiple contracts.

Right now we have solar on TB Smith, that one building, and that that took a long time to do.

So direct ownership, on the other hand, there would be zero energy payments.

So TB Smith, we're just reaping the benefits of those solar panels without a contractual agreement.

And of course, direct ownership provides maximum flexibility, but it also requires a hundred percent upfront costs.

So this current opportunity, we looked at all the potential contracts in Virginia and selected Prince William County public schools because it allows for multiple sites, it allows for the five-year lease renewals that are required for the Municipal Lease Act.

It's an active contract and it has the cooperative language.

So what we learned about it is that they put their RFP to bid in 2022 and received 10 proposals, then they narrowed it to five for formal vetting and ultimately selected secure solar futures for their experience, extensive experience in Virginia, their competitive pricing, and their strong educational offerings.

We did our own research, of course, with Secure Solar Futures.

We learned that they co-founded the RVA solar grant program with Greater Richmond Community Foundation in 2018 and executed a power purchase agreement for 10 Richmond public school buildings in 2019.

They also did the first commercial solar installation in Virginia under a PPA with the University of Richmond, and they've installed the solar on Caritas, just to name a few.

They're a leader in state solar legislation.

They brought the power purchase agreement model to Virginia in 2004, and they're a B Corp, so a great track record.

In terms of the sites that we're talking about, we started with all city-owned buildings and we narrowed it down.

We looked at the age of the roof, shading potential of that rooftop, future plans of the building, the height of the building, potential roof obstructions, and the on-site energy usage.

Then we met with the department directors of the buildings that were viable and spoke with dozens of city staff to confirm the approvals of each site and address any potential barriers, all the way down to does this rooftop has have an antenna on it.

We ran preliminary site feasibility studies, mocked up the arrays, and calculated the solar potential throughout the year.

So as long as the financial modeling allowed for the pricing structure to offer electricity rates lower than we're paying Dominion, the buildings were kept on the list.

In terms of alignment with the five with these five pillars, we're talking about an efficient city hall that gets things done, affordability, sustainable infrastructure, community resilience, public health.

And because of this, we have and more, we have tremendous opportunities for community engagement as well as opportunities to educate Richmonders about solar panels, solar job trainings, resilience hubs, carbon reduction, and utility cost stability.

When we're talking about priority alignment specifically, solar workforce training is a specific strategy in RBA Green 2050.

We've been supporting that through several solar training programs, and we're really excited about this because it brings a catalyst opportunity for employment.

It aligns with the RBA Green 2050 greenhouse gas reduction goals and the renewable energy targets that we've set.

It's also a market building activity.

It creates an enabling environment to bring more solar to additional sectors.

So it's both a first step for us and a lead by example opportunity for the community.

Here's we can educate about the importance of clean energy as it relates to public health.

We can upgrade and protect our infrastructure at the same time.

The solar panels help with that, the UV penetration.

And then many will be designed for battery backup, which is the necessary first step as we plan for greater resiliency.

When we're talking numbers, last year we spent 18.7 million dollars in electricity expenses.

We just saw a rate increase of 23.5% as of July 1st, and that is with the new VEPCA contract, and that is now projected to be an additional increase of 11.5% next July.

So with this project that has been is being proposed is projected to see utility cost avoidance of more than 12 million dollars over the 25-year term.