BOS Agenda Date [February 28, 2006

County of Santa Clara
Office of the County Executive

CEIO 022806
DATE:

February 28, 2006

TO:

Board of Supervisors

FROM:
Peter Kutras Jr.

County Executive
SUBJECT:

Approve the project description for the Fuel Cell Demonstration Project.

RECOMMENDED ACTION

Approve the project description for the Fuel Cell Demonstration project.
FISCAL TMPTJCATIONS

During the FY 2006 Federal earmark process the county submitted, and was granted, an
earmark for a Hydrogen Fuel Cell Demonstration project. The Federal earmark totals $1.5

million. At the current time the local match is yet to be determined, but has a range of between
$350,000 to S1.5 million. The exact value of the match will be determined by the Department

of Energy after they receive additional information regarding this project. Proceeds from
litigation against the Williams Energy Company will yield $1.5 million in FY 2007 that can
be used to satisfy this match if necessary. These funds are restricted and must be used to fund
energy conservation projects.

Board of Supervisors: Donald F, Gage, Blanca Alvarado, Pete McHugh, Jim Beall. Liz Kniss
County Executive: Peter Kutras Jr.

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BOS Agenda Date :February 28, 2006

REASONS FOR RECOMMENDATION

During the Finance and Government Operations Meeting of February 2, 2006, Facilities and
Fleet staff provided a status report on the Federal earmark for the Fuel Cell Demonstration
project. Staff attended a meeting in Washington, D.C. and learned that the match requirement
might be greater than originally anticipated. At that time, committee members requested
information regarding this earmark, and the process that led to the Board approving its
submission. That information was provided to the Board in an off-agenda memo dated
February 9, 2006. In that memo we indicated that a project description was required by
February 28, 2006, and would be agendized for Board approval on that date.
BACKGROUND

In September of 2004, Supervisor Beall introduced the Santa Clara County Fuel Cell
Advancement Initiative. This initiative was designed to begin the investigation of the benefits
of Hydrogen Fuel Cells. Subsequently, the Board approved - as part of the FY 2006 Federal
Earmark process - the submission of an earmark request for a Fuel Cell Demonstration

project. Funding in the amount of $1.5 million was approved in the Federal budget for this

project.

On February 1, 2006, during a meeting in Washington, D.C. with the Department of Energy to
discuss this project, it was learned that an official project description was to be submitted by
February 28, 2006, to move the project forward. During the same meeting, it became clear
that the project match could be greater than the original estimate of $750,000. This was
discussed with the Finance Committee on February 2, 2006, and we committed, at that time,

to bring the Project Description forward for Board approval. The project description is as
follows:

Planar Solid Oxide Fuel Cell Project, Santa Clara County

This project would fund one or more solid oxide fuel cell(SOFC)power generation projects
at least one of which would be a planar SOFC project at suitable sites located on Santa Clara
County Property. The specific sites will be selected based on the best application of solid
oxide fuel cell technology and would provide high quality, reliable, and clean power for
County facilities; allow educational opportunities for County school children on the benefits
offuel cells and clean energy; and provide the potential for producing hydrogen for County
Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.

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BOS Agenda Date February 28, 2006

vehicles. Sites being considered include recreation facilities such as Vasona Park, which is

co-located with the Youth Science Institute; facilities that operate 24-7 such as Elmwood Jail

and the County 911 Communications Center; or County health and hospital facilities.
The submission of this project description does not commit the County to this project, but
allows the project to continue moving forward. Additional information related to a project
application has to be completed with final approval not occuring until May 31, 2006.
Based on issues and concern raised during the Finance Committee meeting, discussion of the

project description and any updated information including the required local match is
appropriate at this time.

Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jinn Beall, Liz Kniss
County Executive: Peter Kutras Jr.

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