San Diego inks $112M deal to retrofit 40 city buildings, 40,000 streetlights

San Diego will retrofit 40 aging city facilities and nearly 40,000 streetlights to make them more climate-friendly under a new $112 million contract that requires no up-front investment.

Private contractor Wildan Energy Services will complete all the retrofit projects during the next two years and get paid back slowly by the city from millions in savings achieved with lower energy bills.

San Diego officials are hailing the deal as a clever way for the cash-strapped city to move toward its climate goals, which include having all city buildings produce net-zero greenhouse gas emissions by 2035.

But the deal may temporarily require full or partial closures of some popular city facilities, including 16 library branches, 16 recreation centers and four municipal pools.

And the city’s independent budget analyst says the plan also comes with some financial risks.

The 25-year deal is projected to be cost-neutral for the city if electricity costs rise an average of 3.75% per year over the deal’s life. If costs rise less than that, the savings won’t be enough to cover the city’s payments to the contractor.

Other risks include that the deal relies on $8 million in federal tax credits for 15 solar projects included in the contract. But the IBA notes that there is no guarantee the city will secure those tax credits.

“While staff have attempted to mitigate against these risks, they exist and should be carefully weighed against potential be...