San Francisco to issue RFQ in April for biogas P3

Breaking News 4 April

San Francisco to issue RFQ in April for biogas P3

The San Francisco Public Utilities Commission (SFPUC) plans to issue an RFQ this month for a biogas facility located on the site of an existing wastewater treatment plant.

The Southeast Treatment Plant Biogas Utilization project may include, but is not limited to, financing, designing, permitting, building, operating and maintaining biogas utilization facilities on the site of the Southeast Water Pollution Control Plant, San Francisco’s largest wastewater treatment facility, according to SFPUC officials.

The project will include treating digester gas to natural gas quality, injecting the gas into a nearby Pacific Gas & Electric natural gas pipeline and selling the gas as a renewable fuel eligible for environmental credit programs.

As of last year, the project’s construction costs were estimated at about USD 50m, according to Daniela Brandao, senior project manager for the SFPUC.

An RFI the SFPUC issued for the project in 2021 generated 14 responses.

The SFPUC has taken steps to lay the groundwork for the project’s procurement process by hiring advisors.

“We want to make sure we are using industry best practices and lessons learned to develop a robust P3 contract,” Brandao said in an interview.

The commission hired Nossaman in February to lead the procurement process and develop the contract. Brown and Caldwell has provided technical support for the project since its conception in 2019. And Aspen Capital Consulting and FourCourt Advisors have been on board since December 2020 to look at different commercial structures and the project’s overall financial feasibility, Brandao said.

The project got a further boost when the San Francisco Board of Supervisors approved an ordinance earlier this year that waived certain parts of the city’s administrative code to enable the SFPUC to purse it as a P3. Mayor London Breed signed the ordinance on 17 March.

The SFPUC has determined that having one private partner responsible for all aspects of the project, instead of having multiple contracts, is the best way to move forward, Brandao said. The use of P3 delivery for the entire scope — including financing, design, construction, O&M and revenue generation — preserves the city’s capital funds, maximizes the economic value of biogas and allows appropriate allocation of risks and returns for performance and revenue generation, Brandao said.

The SFPUC will select a developer through a competitive process and best value selection, utilizing qualitative and quantitative criteria to evaluate proposers, according to Brandao. The RFQ will be followed by the issuance of an industry review RFP to shortlisted proposers. From there the commission will further refine the RFP, including the project’s scope, Brandao said.

In the RFI, the SFPUC assumed a 20-year concession term for its P3 partner.

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