Memorandum
Date: July 19, 2022
To: The Honorable Lake County Board of Supervisors
From: Susan Parker, County Administrative Officer
Subject: a) Consideration of an Update from the County of Lake's Energy Services Company (ESCo), Trane US Inc., Regarding Recent Progress on the N. Lakeport FLASHES Energy, Disaster and Climate Change Resiliency Projects; and b) Consideration of Next Steps and Potential Direction to Staff to Develop a Letter of Commitment to Further the N. Lakeport Projects
Executive Summary:
As you will recall, on September 21, your Board approved a Letter of Commitment (LOC) with Trane. With adoption of that LOC, the County committed to coordinating with Trane to pursue grant funding, and declared our intention to move forward with N. Lakeport FLASHES project, if it proved to be viable, in the interest of bringing disaster and energy resiliency benefits to critical infrastructure facilities and surrounding areas. Under the terms of that letter, a $100,000 termination fee would be required if the County elected not to move forward, despite the project having proven feasible:
https://countyoflake.legistar.com/LegislationDetail.aspx?ID=5140574&GUID=5BB629E7-35FB-469F-A259-78704707F341&FullText=1
Environmental Review for energy projects of this scale typically occurs under a formal Development Agreement, and not an LOC. However, because in this case, the late spring window wherein this work must be undertaken was expected to lapse prior to completion of a Development Agreement, and your Board therefore acted to amend the September LOC on March 8, 2022, to facilitate Trane undertaking this work:
https://countyoflake.legistar.com/LegislationDetail.aspx?ID=5470456&GUID=9BC6A1FF-39EF-4F64-8FF4-D89CB43036C2
As your Board will remember, the September 2021 Letter of Commitment noted the project was, "expected to deliver a minimum 12% Internal Rate of Return," in order to be viable for development via a public-private partnership. Trane recently ...
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