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October 10, 2018 CUSD BOT Meeting Agenda Item #5  CHANGE ORDER NO. 1, RESOLUTION NO. 1718-28, ENTER INTO ENERGY SERVICE CONTRACT – REC SOLAR PROJECT

Board Agenda page 266

A BLUE CARD WILL BE PULLED

CUSDWatch Comment

The Resolution (page 534) was approved by the CUSD Board on December 6, 2017 authorized awarding an energy service contract to REC Solar. The contract amount is a total purchase cost of $18,372,631 including capital cost, performance guarantee, and operation and maintenance.  

Staff is now asking Trustees to approve a Change Order to increase the contract by $672,580.26 because of government tariffs on Solar Panels. This "Change" should bring the contract price to the price stated in the Resolution + $672,580.26.

Instead, the Change Order changes the original contract price to $17,563,580.26.

Original Contract Price Approved December 6, 2017: $18,372,631 $17,563,580.26

+ Change Order $672,580.26 = $18,372,631 

What is going on here? This change order makes the original Resolution incorrect.

Change Order Request page 271

"Per Contract Article 20.9, shown below, REC is submitting a request for change order to adjust for the cost of modules for the CUSD solar projects for the sum of  $672,580.26.

"Change Order Adjust for Cost of Modules. The parties agree that as of the effective date that contractor shall submit a Request for Change Order to adjust for the difference in the cost of the modules required for the Project between the cost assumed by Contractor prior to the effective date ($0.40/watt) and the actual cost of such modules at the time of procurement and following the implementation of the solar tariffs, whether these costs are higher or lower, in an amount not to exceed including adjustments based on the actual tariff, all mark=ups and costs. $0.55/watt. Notwithstanding anything in this agreement, the District agrees that it shall issue a Change Order in response to such a request for Change Order for the adjusted price of the modules in accordance with the terms of this Article 20.9"

 

For background on the Tariffs- see January 24, 2018 CUSD BOT Meeting Agenda Item #38 FINANCING RESULTS OF CLEAN RENEWABLE ENERGY BONDS FOR SOLAR ENERGY PROJECTS .