DATE: November 14, 2023
SUBJECT:
Title
PRESENTATION AND DIRECTION TO STAFF ON DEVELOPMENT PROPOSALS RECEIVED FROM GAGE ZERO LLC AND SKYCHARGERS LLC PURSUANT TO RFP 23-12MB TO ENTER INTO A LEASE FOR THE DEVELOPMENT OF A ZERO EMISSION TRUCK STOP AT 19TH STREET AND TIDELANDS AVENUE IN NATIONAL CITY, IN FURTHERANCE OF MCAS TRUCK GOAL 2, PURSUANT TO BOARD POLICY NO. 360.
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EXECUTIVE SUMMARY:
The Maritime Clean Air Strategy (MCAS) includes a vision of “Health Equity for All” and 38 near-term objectives, several of which aim to reduce emissions from maritime-related activities and industries. Importantly, the MCAS aspires to achieve 40 percent zero emission (ZE) heavy-duty (HD) truck trips to and from the District’s marine cargo terminals by June 30, 2026, and 100 percent ZE HD truck trips by December 31, 2030. Infrastructure to power these ZE trucks is critical to achieving these aspirations. MCAS Truck Goal 2 focuses on facilitating the deployment of infrastructure to support the transition to ZE trucks. More specifically, Truck Objective 2A directs staff to present a concept plan to the Board of Port Commissioners (Board) that identifies four potential HD truck infrastructure locations within the region to support the deployment of ZE trucks.
The first step to implementing Truck Goal 2 was to implement Truck Objective 2A. Last summer, in furtherance of that Objective, staff released a Request for Information (RFI) solicitation for ZE Infrastructure for HD trucks serving the District and the region in order to learn more about the emerging technologies and the associated business models, as well as the appropriate site concepts and features the District should consider in the development of future ZE truck infrastructure sites. The RFI asked proposers how they would hypothetically construct infrastructure on four sites located on Tidelands and four sites throughout San Diego County.
Based on review of the RFI responses, in November 2022, staff proposed, and the Board adopted, a resolution authorizing staff to issue a request for proposals (RFP) to develop a ZE Truck Stop for heavy duty trucks on Tidelands located at the intersection of 19th Street and Tidelands Avenue in National City.
The RFP was open from April 27, 2023 to August 9, 2023 and asked for proposals to design, build, operate, and maintain a ZE Truck Stop on one or more of three adjacent parcels at the intersection of 19th Street and Tidelands Avenue (located on Port Tidelands), which together is approximately 13 acres. The RFP requested business models that focus on battery electric technology. Staff received six proposals and has narrowed it down to two finalists: Gage Zero LLC and Skychargers LLC.
Staff intends to allow both finalists to present their proposals to the Board at the November 14, 2023 meeting. In addition, staff will provide perspective on why these proposals were selected as the finalists as well as give an overview of stakeholder and community feedback. After responding to questions and receiving feedback from the Board, the finalists will have 30 days to revise their proposals if they choose to make revisions. Staff intends to return to the Board in early 2024 with a final recommendation.
RECOMMENDATION:
Recommendation
Presentation and direction to staff on development proposals received from Gage Zero LLC and Skychargers LLC pursuant to RFP 23-12MB to enter into a lease for the development of a Zero Emission Truck Stop at 19th Street and Tidelands Avenue in National City, in furtherance of MCAS Truck Goal 2, pursuant to Board Policy No. 360.
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FISCAL IMPACT:
This agenda has no fiscal impact.
Compass Strategic Goals:
This agenda item supports the following Strategic Goal(s).
• A Port that the public understands and trusts.
• A thriving and modern maritime seaport.
• A Port with a healthy and sustainable bay and its environment.
• A Port with an innovative and motivated workforce.
• A financially sustainable Port that drives job creation and regional economic vitality.
DISCUSSION:
As discussed in the Executive Summary, the MCAS aspires to achieve 40 percent zero emission (ZE) heavy-duty (HD) truck trips to and from the District’s marine cargo terminals by June 30, 2026, and 100 percent ZE HD truck trips by December 31, 2030. Infrastructure to power these ZE trucks, is critical to achieving these aspirations. MCAS Truck Goal 2 asks staff to facilitate the deployment of infrastructure to support the transition to ZE truck trips to the District’s marine cargo terminals. Additionally, MCAS Truck Objective 2A asked staff to present a concept plan to the Board by the end of 2022 that includes four potential public facing HD charging locations to support the deployment of ZE trucks. To progress implementation of MCAS Truck Objective 2A, last summer staff released a RFI to evaluate sites, business models and development concepts to deploy ZE Infrastructure for HD trucks serving the District’s marine cargo terminals, Tenth Avenue Marine Terminal in San Diego and National City Marine Terminal in National City.
Request for Information (RFI)
The RFI was open from May 23, 2022 to July 25, 2022 and included four sites located on District Tidelands and four Regional Locations throughout San Diego County along routes frequented by trucks traveling to and from the District’s marine cargo terminals that could potentially be developed as infrastructure sites. Staff received 18 responses from a wide range of respondents; the two sites located at the intersection of 19th Street/Tidelands Avenue in National City were the most popular. Responses proposed both battery electric and hydrogen fuel cell infrastructure under a variety of business models. After reviewing the responses, staff determined that not one alone met the needs of the District; however collectively, several respondents provided promising site concepts and business models to be considered as the District moves forward. Staff recognized that developing enough infrastructure to support the transition to ZE HD trucks will be an iterative process and thus, determined to initially focus on developing one battery electric charging site and expand the scope of infrastructure sites and technologies (e.g., hydrogen fuel cell) as the technology advances. The technology for ZE HD trucks is rapidly evolving and it is prudent to focus on one site at a time, recognizing that battery electric technology is more established. Future phases may explore deployment of more sites once higher capacity battery electric charging is available for HD trucks and hydrogen fuel cell technology is further developed. In addition, a phased approach offers the District the ability to leverage lessons learned that may benefit future phases of infrastructure development.
Last fall, staff provided community, stakeholder, and Board updates on the results of the RFI. At the November 2022 Board Meeting, staff requested the Board adopt a resolution authorizing staff to move forward on the project and issue a RFP to develop ZE Infrastructure for HD Trucks on Tidelands located at the intersection of 19th Street and Tidelands Avenue in National City; this request was granted. In early 2023, the District retained JLL, a commercial real estate consulting firm, to assist staff in the development of the RFP and subsequent proposal review and evaluation.
Request for Proposal (RFP)
The RFP was open from April 27, 2023 to August 9, 2023 and asked for proposals to design, build, operate, and maintain a ZE Truck Stop on one or more of three adjacent parcels at the intersection of 19th Street and Tidelands Avenue in National City (located on Port Tidelands), which together is approximately 13 acres. The RFP requested business models that focus on battery electric technology, a project design that builds out the site in a phased approach based on increased utilization rates, incorporates distributed energy resources, provides a community benefit, includes a revenue sharing agreement, onsite amenities, and although open to the public, provides preferential charging for trucks calling to and from the District’s marine cargo terminals.
Staff received six (6) proposals, two of which, upon review, the Evaluation Team found to be unresponsive. On September 18 and 19, 2023, staff interviewed the remaining four proposal teams. Each interview provided an opportunity for the proposal teams to present their proposals for the ZE Truck Stop, followed up by questions from District staff and JLL consultants. Based on these interviews, two proposals rose to the top: Gage Zero LLC and Skychargers LLC (finalists). Gage Zero LLC and Skychargers LLC were selected as finalists based on their well thought out approach to the project, design, business model, distributed energy resources, community benefit, and project financials.
Gage Zero LLC
Gage Zero LLC was established in 2023 in Austin, Texas and is founded and led by women. Although it is a new company, the team has extensive project management experience building utility-scale infrastructure projects ranging from solar photovoltaics to battery storage to transport fuels. Gage Zero has a commitment from ARC financial for capital, a private equity firm focused on energy investments.
District staff selected Gage Zero’s proposal as a finalist based on their extensive research about the District, our operations, and our tenants. Gage Zero received letters of support from local trucking companies that already serve the District, as well as from key District tenants. Their financial package provides the greatest return on investment and it included a strong community benefit package. Gage Zero’s proposal has a smaller footprint and is proposing two phases of development that will result in 20 EVSE dual port units (40 total). Phase 1 would include ten (10) 350kW chargers, also referred to in the industry as electric vehicle supply equipment (EVSE) dual port units, a 2,500 sq ft rest area building containing amenities including showers and restrooms, food and refreshments, a picnic area, a 400 kW onsite solar array, and a 500 kw/2MWh battery. Phase 2 would include ten (10) 150 kW EVSE units with dual charging capabilities.
SkyChargers LLC
SkyChargers LLC was established in 2013 in the United States and submitted a proposal in partnership with Burns & McDonnell and Skyview Ventures, together with vendors including Amazon, Macquarie Group, ChargePoint, O’Day Consultants, SoyLopez Consulting, Ursus Victor, SEPIA Energy, and Momentum. Skyview Ventures is the financing partner responsible for all costs related to financing, design, procurement, installation, operation, and maintenance.
District staff selected SkyChargers’ proposal as a finalist based on their partnerships’ extensive experience. Their financial package provides a strong return on investment, in addition to a strong community benefits package including retaining SoyLopez, a local health equity strategist. SkyChargers’ proposal has a larger footprint; although the proposal only focuses on two phases, it is open to expanding to the entire available area if the EVSE utilization rate demands it. The two proposed phases will result in 63 EVSE dual port units (126 total). Phase 1 would include 27 EVSE dual port units - twelve (12) at 360 kW and fifteen (15) at 160kW, a 4.82 MW solar canopy, a 1.06MW/4.22 MWh battery, and an Amazon “Just Walk Out” convenience store with restroom facilities and interpretive hub. Phase 2 would include 36 EVSE dual port units - four (4) 360kW EVSEs and thirty-two (32) 160kW EVSEs.
Community and Stakeholder Engagement
This fall, staff conducted community and stakeholder engagement on the RFP, the response received, and staff’s proposed next steps. Staff presented to the following stakeholder groups:
• District’s Maritime Stakeholder’s Forum - September 21, 2023
• San Diego Gas and Electric - September 25, 2023
• Caltrans District 11 - October 10, 2023
• National City, City Council - October 17, 2023
• Barrio Logan Community Planning Group -October 18, 2023
• Environmental Health Coalition - October 25, 2023
• SANDAG - October 26, 2023
AB 617 Portside Communities Steering Committee - scheduled for November 28, 2023 agenda (Due to a full agenda in September and October, the Steering Committee was not able to agendize this item until after the District’s November Board Meeting)
The presentations to the community and stakeholders provided a high-level summary of all of the proposals submitted pursuant to the RFP. The Community and stakeholder feedback we received on the proposed project was very positive; overall, stakeholders and community members are very excited about ZE trucks coming to the District, and the District doing its part to provide infrastructure for these trucks to charge.
Conclusion
Staff believes both proposals meet the goals of the RFP although with different approaches. Staff will seek feedback from the Board at the November 14, 2023 meeting on the following aspects of the proposals:
• Project Design - size, phasing, and utilization rates;
• Business Model
• Distributed Energy Resources
• Community Benefit
• Revenue Sharing
• Onsite Amenities
This feedback will enable each finalist to refine their proposals. Staff intends to return to the Board in early 2024 with a final recommendation.
General Counsel’s Comments:
The Office of the General Counsel has reviewed and approved this agenda and proposed resolution, as presented, as to form and legality.
Environmental Review:
The proposed Board action, including without limitation, receiving presentations on development proposals pursuant to RFP 23-12MB and providing feedback to staff, does not constitute a “project” under the definitions set forth in California Environmental Quality Act (CEQA) Guidelines Sections 15352 and 15378 because no direct or indirect changes to the physical environment would occur. CEQA requires that the District adequately assess the environmental impacts of projects and reasonably foreseeable activities that may result from projects prior to the approval of the same. Any project developed as a result of the proposed Board actions requiring the District or the Board’s discretionary approval resulting in a physical change to the environment will be analyzed in accordance with CEQA prior to such approval. CEQA review may result in the District, in its sole and absolute discretion, requiring implementation of mitigation measures, adopting an alternative, including without limitation, a “no project alternative” or adopting a Statement of Overriding Consideration, if required. The exercise of this discretion is in no way limited by this proposed Board action. Therefore, no further CEQA review is required.
The proposed Board action complies with Section 87 of the Port Act, which allows for the establishment, improvement, and conduct of a harbor, and for the construction, reconstruction, repair, maintenance, and operation of wharves, docks, piers, slips, quays, and all other works, buildings, facilities, utilities, structures, and appliances incidental, necessary, or convenient, for the promotion and accommodation of commerce and navigation. The Port Act was enacted by the California Legislatures and is consistent with the Public Trust Doctrine. Consequently, this update is consistent with the Public Trust Doctrine.
The proposed Board action does not allow for development, as defined in Section 30106 of the California Coastal Act, or new development, pursuant to Section 1.a. of the District’s Coastal Development Permit (CDP) Regulations because it will not result in, without limitation, a physical change, change in use or increase the intensity of uses. Therefore, issuance of a Coastal Development Permit or exclusion is not required. However, development within the District requires processing under the District’s CDP Regulations. Future development would remain subject to its own independent review pursuant to the District’s certified CDP Regulations, Port Master Plan, and the relevant chapter(s) of the Coastal Act. The exercise of the District’s discretion under the District’s CDP Regulations is in no way limited by the proposed Board actions.
Diversity, Equity, and Inclusion Program:
This agenda sheet has no direct DEI impact on District contracting and workforce reporting at this time. Both finalists have submitted the required SBE Plan for this phase.
PREPARED BY:
Maggie Weber
Principal of Strategic Planning, Energy & Policy
Attachment(s):
Attachment A: Request for Information (RFI) for ZE Infrastructure for HD trucks serving Port of San Diego and the San Diego Region
Attachment B: Agenda Sheet 2022-0329 (Truck Infrastructure RFI)
Attachment C: Request for Proposal (RFP) for Zero Emission Truck Stop, National City
Attachment D: Gaze Zero LLC Proposal (with redactions of confidential and/or proprietary information)
Attachment E: Skychargers LLC Proposal (with redactions of confidential and/or proprietary information)
Attachment F: Draft Presentation