DATE: September 13, 2022
SUBJECT:
Title
PARTICIPATION IN THE STATE'S LOW CARBON FUEL STANDARD PROGRAM:
A. RESOLUTION AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO EXECUTE A LOCAL GOVERNMENT SERVICE AGREEMENT BETWEEN THE DISTRICT AND THE DEPARTMENT OF THE NAVY; AND
B. RESOLUTION AUTHORIZING THE CHIEF EXECUTIVE OFFICER TO EXECUTE AMENDMENT NO. 1 TO AGREEMENT WITH BLUE SOURCE, LLC, FOR MARKETING CONSULTANT FOR LCFS CREDITS REDUCING THE FEE, EXTENDING TERM FROM DECEMBER, 31 2024 TO DECEMBER, 31 2030, AND CONSENTING TO THE ASSIGNMENT FROM BLUE SOURCE, LLC, TO ANEW EV, LLC.
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EXECUTIVE SUMMARY:
The District was the first port in California to join the Low Carbon Fuel Standard (LCFS) program in April 2019. Since that time, in addition to successfully monetizing the District's own credits, the District has partnered with multiple tenants to utilize the District's existing contract with Anew1 at a relatively low cost. The tenants provide the electricity use for qualified functions, Anew determines the number of credits and monetizes them for the District, and the District provides each tenant with its share of the proceeds.
The proposed agreement with the Navy is considered a pilot program because it is new to the Department of the Navy, and it differs from the contract with the tenants. Instead of providing the Navy a direct payment the District will be responsible for developing and managing LCFS-qualified projects at Navy Base San Diego. The District will pay for the projects directly from the Navy's share of the LCFS funds. The District will also pay from its own share of Navy generated LCFS revenues for District personnel who will manage the project construction.
The differing nature and large LCFS qualified electrical volume of the proposed Navy agreement compared to the existing tenant LCFS agreements allowed District to negotiate changes to the agreement with Anew which will result in substantial cost savings for the District and its partners. These new...
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