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Contract value: $1.226 billion

The California Public Utilities Commission (CPUC) approved the EPCM contract, valued at an estimated $1.226 billion, in December 2021 after SCE conducted a competitive procurement process between August and October 2021.

SCE put out the RFP to find a developer capable of installing BESS plants at sites owned and operated by the California utility. The three plants were expected to be online by the end of August 2022 to provide SCE with additional capacity to meet peak electricity demand during the summer season. But that did not happen.

Chain of delays and force majeure events

In June 2022, Ameresco notified SCE of a force majeure case, stating that a delay in the delivery of batteries from China would impact the developer's ability to complete the project before the contractually agreed operational date. Ameresco blamed the delays on Covid-19-related factory closures in China, but also new shipping restrictions imposed by the Chinese government.

Towards the end of 2022, SCE instructed Ameresco to delay completion of the sites until 2023 after the utility was hampered by “permitting delays and technical issues.”

In January 2023, SCE received another force majeure notice from Amereco stating that winter storms in Southern California had further delayed the projects.

Contractual penalty

SCE has informed Ameresco that it intends to withhold damages for one of the project sites after Ameresco issues an invoice for that particular site in February 2024.

In the most recent 10Q quarterly report Ameresco filed with the SEC, the developer stated that it was “working with SCE to analyze the applicability and scope of the force majeure indemnity claim” and that it does not believe liquidated damages should be imposed in this case.

Under the terms of the agreement between the two parties, liquidated damages, once triggered, will accrue for a period of up to 60 days up to a maximum amount of $89 million.

According to the latest quarterly 10Q report from SCE's parent company (Edison International), Ameresco expects all three projects to be operational by the end of July 2024.

This came after it was reported in March last year that the portfolio would be “substantially completed” by summer 2023, which was Energy-Storage.News.

Developer protests

Several well-known developers in the energy storage industry protested against the agreement between Ameresco and SCE, including Broad Reach Power (now part of Engie), Hecate Grid (jointly owned by Hecate Energy and InfraRed Capital), Avantus, Aypa Power, Strata Clean Energy and also Clearway Energy.

The developers took issue with several elements of the proposed contract, particularly that SCE had received permit exemptions under the California Environmental Quality Act (CEQA), that the project's costs were “significantly above” comparable industry resources, and that SCE excluded third-party ownership options.

Despite these protests, the CPUC approved the contract with only one minor change.

Ameresco builds BESS plant for energy utility in the Pacific Northwest

In other news, it was announced this week that Ameresco has signed a contract with the Snohomish County Public Utility District (PUD) to build a 25 MW/100 MWh BESS for the Washington-based public utility.

Under the terms of the agreement, Ameresco will own the facility and Snohomish PUD will be the plant's sole purchaser of electricity through a tolling agreement. In the July 8, 2024 announcement, Ameresco stated that it expects to begin construction on the project toward the end of this year, with the facility coming online in 2025.

The agreement follows similar agreements Ameresco has made in recent years. A ribbon-cutting ceremony (pictured) was recently held at the site of an 18.6 MW solar and 6 MW/6 MWh BESS facility Ameresco built for the U.S. Army in Maryland.

The U.S. military base Fort Detrick is purchasing energy from the Ameresco plant under a 25-year power purchase agreement (PPA).

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