Tesla to build batteries for Escondido schools
With power rates skyrocketing for San Diego County school districts, Tesla Motors Inc. has inked a deal to build stationary battery storage systems for three Escondido high schools — a project that officials hope could save hundreds of thousands of dollars annually in electricity costs.
The Silicon Valley-based company — best known for its pioneering plug-in electric cars — unveiled home and industrial battery packs in April that can provide backup power or help businesses and government agencies avoid high-priced electricity. The Escondido Union High School District is believed to be one of its first big clients.
“The significance of this is that the school district, which is trapped by rising utility costs, can put more money into the classroom and have a positive impact on the environment,” said Michael Simonson, the district’s superintendent of business services.
Tesla is building the world’s largest battery factory in the Nevada desert to realize its automotive and energy-storage dreams — a “Gigafactory” in the words of Tesla CEO Elon Musk, who also runs the aerospace giant SpaceX and has close financial and family ties with solar installer and manufacturer SolarCity.
California is expected to be a major market for big battery systems, as state utility regulators turn to energy storage to soak up excess electricity and recycle it — one solution to unpredictable output from solar and wind farms.
A new energy division at Tesla could yield as much as $4.5 billion in revenues, according to estimates by Deutsche Bank.
Tesla spokeswoman Alexis Georgeson said she couldn’t immediately comment on the company’s efforts or its project in Escondido.
Tesla’s foray is just one among hundreds of stationary battery storage projects in various stages of funding throughout the state of California, according to public data published by the California Public Utilities Commission, the state regulator of energy and a grant program that is partially funding the Escondido effort and other similar projects.
In Escondido, Tesla has proposed charging several large lithium ion batteries at night — when power costs fall to roughly 12 cents per kilowatt hour — and using the stored energy during the day, when rates can rise to 42 cents, according to Simonson.
Plans approved by the state’s Division of State Architect recently gave the school district the green light to begin building storage facilities for the batteries in the next few weeks. The concrete-block buildings will be the size of an average office with locked, double-wide steel doors.
A lithium ion battery has twice the energy capacity of a nickel-cadmium battery and greater stability and safety, experts say.
The three Escondido schools — Escondido High School, Orange Glen High School and San Pasqual High School — would receive anywhere from 400- to 600-kilowatt hour battery storage systems.
Simonson estimates that the stationary battery storage systems could collectively cut the school district’s rising utility costs by as much as $300,000 annually after they become operational at the end of the year.
“It’s an exciting future for us,” Simonson said.
Escondido Union High School District has dodged some of the larger power bills hitting school districts in San Diego County because of initiatives to replace old heating and air conditioning units, and replace light fixtures with more efficient ones, Simonson said.
Over the past two school years, for instance, the Escondido school district has cut its demand for power by 958,000 kilowatt hours. Meanwhile, it’s power bill has risen by about $195,000, or 13 percent, from $1.43 million in the 2013-2014 school to $1.62 million, in the latest year.
Simonson said the $2 million to $8 million project in his school district is receiving funds under a 50-50 financing arrangement by Tesla and the Center for Sustainable Energy, which administers the state’s SGIP program — formally known as Self-Generation Incentive Program —-- for electricity customers of San Diego Gas & Electric Co.
SGIP, which provides financial incentives for the installation of clean generation technologies, is a ratepayer-funded rebate program, overseen by the California PUC.
In San Diego, the Center for Sustainable Energy provides technical and financial assistance to parties interested in wind, waste energy recovery, pressure reduction turbines, fuel cells, advanced energy storage and combined heat and power technologies.
Escondido’s Tesla project comes as school officials have been working for months on a plan to battle electricity increases that hit school districts hard last fall. Some said their SDG&E bills have shot up by as much as 40 percent.
Thirty-eight local school districts — ranging from San Marcos Unified and Carlsbad Unified to Grossmont Union High School and Lemon Grove — are now fighting a new application by SDG&E that could push their rates even higher.
The utility is asking the California PUC for permission to raise rates for medium and large commercial customers — including schools — by nearly 26 percent over a three-year period starting in 2016.
SDG&E officials said the hikes are due to mandates involving renewable energy and a delay in passing on previous rate increases.
One lawmaker, San Diego Assemblywoman Shirley Weber said she’s investigating why electricity costs have risen a combined $30 million for 42 local public school districts in San Diego County this past year.
