Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Tory A. Newman, Director of Public Works
Subject: Amendment No. 3 to the Agreement with Capstone Green Energy, LLC
RECOMMENDATION:
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Adopt a resolution authorizing Amendment No. 3 to the Agreement with Capstone Green Energy LLC, for the service, repair, and rebuild of the microturbines at the Youth Services Center (YSC), increasing the amount by $750,000, for a new not-to-exceed amount of $1,550,000 with no change to the term.
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BACKGROUND:
The Department of Public Works (Department) operates a microturbine cogeneration plant comprised of eight Capstone Turbine Corporation microturbine generating units at the Youth Services Center (YSC).
On June 25, 2019, this Board adopted Resolution No. 076783, which authorized an agreement with Cal Microturbine, Inc. for a not-to-exceed amount of $341,610 to service, repair, and rebuild the microturbines at YSC with a term of June 1, 2019 through May 31, 2024. Cal Microturbine, Inc. was the sole service provider on the West Coast to work on Capstone Turbine Corporation microturbines.
On November 1, 2022, this Board adopted Resolution No. 079279, which authorized Amendment No. 1 to the Agreement with Cal Microturbine, Inc. increasing the not-to-exceed amount by $458,390 to continue providing maintenance for the microturbines through the remainder of the Agreement.
On September 25, 2024, by authority of Resolution No. 079279 and approval from County Procurement, the Director of Public Works authorized Amendment No. 2 extending the term of the Agreement through May 31, 2029.
DISCUSSION:
On August 13, 2025, the Department received notice from Capstone Green Energy, LLC of their acquisition of Cal Microturbine, Inc. and its exclusive distribution territory as well as a rate increase for the maintenance of the YSC microturbines. The proposed amendment would memorialize this acquisition and the Department desires to continue the Agreement with Capstone Green Energy, LLC.
The Department has exhausted all available funds for maintenance and necessary repairs for the microturbines at YSC and requires additional funds through the remainder of the Agreement. Without the cogeneration units running properly, the electrical penalties from PG&E and non-compliance penalties from the Bay Area Air Quality Management District would be costly.
The Department requests an additional $750,000 to continue providing necessary microturbine generating units at YSC for the remainder of the Agreement.
The County Attorney has reviewed and approved the resolution and amendment as to form.
COMMUNITY IMPACT:
Microturbines provide reliable power for critical infrastructure like hospitals, schools, and fire stations. They can continue to produce electricity during main electrical grid outages, ensuring continuous power supply to the YSC campus. Due to high efficiency and often lower emission levels compared to traditional backup generators, they help improve local air quality and reduce greenhouse gas emissions. Microturbine generating units provide localized, efficient, and cleaner energy solutions. They function as distributed generation technology, offering benefits in energy resilience, emission reductions, and economic development.
FISCAL IMPACT:
Amendment No. 3 to the Agreement increases the not-to-exceed amount by $750,000 for a new not-to-exceed amount of $1,550,000. Funding for this amendment is included in the Department of Public Works Approved Budget for FY2025-26 and will be included in future fiscal year budgets for Facilities Maintenance & Operations.
There is no additional impact to the General Fund.