The URL can be used to link to this page

Home My WebLink AboutItem 03.e�1 Lr�kevtIle Memorandum To: Mayor and City Council From: Justin Miller, City Administrator Chris Petree, Public Works Director Date: October 26, 2015 Subject: Solar Garden Proposal City of Lakeville Administration Over the past several months staff has been contacted by numerous companies offering to allow the City of Lakeville to participate in a solar garden proposal. Solar gardens are usually an off-site facility that are owned and installed by a third -party company who then sells electricity back to "subscribers" at a lower rate than is charged by the incumbent electricity provider. The third -party receives various credits and tax incentives not available to municipalities and therefore can provide the savings to subscribers while at the same time making a profit for their company. The most recent proposal to be presented to the City of Lakeville comes through a Metropolitan Council project at their Empire and Seneca wastewater treatment plants. Attached to this report is a presentation outlining their proposal and the projected savings to the City of Lakeville. Anticipating interest from other cities (and limited capacity at the solar garden), staff has already sent a letter of interest solely to ensure a place in the queue, dependent on city council direction. Staff will be available to go through the presentation and answer any questions at Monday's work session. City of Lakeville Community Solar Gardens Opportunity October 2015 0 oaKleaf ENERGY PARTNERS Program Background • Community Solar Gardens - Law passed in 2013; MPUC finalized rules 2014; Program opened December 2014 - Allows homeowners, businesses and governments to "own"apiece of a solar farm - Minimum of 5 subscribers per solar garden; Maximum of 40% per legal entity per garden; - Must reside in same, or contiguous, county • Oak Leaf - One of nation's largest solar developers - Works with municipalities with special focus on water and wastewater facilities - Plans to build 5 solar gardens at Empire & Seneca VIIWTP t) yqKknf Solar Garden Economics (JD Subscribers (e.g. City of Lakeville, Met Council, etc.) 0 Credit Applied to Bill for kWh Generated Xcel Energy 1 Z (:A:) $ for RECs ...5+ O Prepayment or Periodic Payments Oak Leaf 3 Solar Array Finance, Construct, Own & Operate 0 oakleaf Project Details • Six solar gardens totaling 5.75MW AC - 23,365 solar panels; �30 acres • Generates ----,7.6MM kWh annually - Met Council will receive 80% or 6.1MM kWh - Remaining 20% goes to local communities • Resides on Met Council land - 5 gardens adjacent to Empire WWTP, 1 garden adjacent to Seneca WWTP in Eagan • Subscription term is 2 5 years • Goal is to start construction Q1 2015 0 oakleaf Opportunity for City of Lakeville • Twenty percent of garden subscriptions remain - �1.53MM kWh in year 1 • City of Lakeville can subscribe @ 6%+ • No upfront cost to subscribers • Subscriptions offered to communities served by Empire & Seneca plus Dakota County • Need at least three more subscribers; would like expressions of interest by October 15tH and Subscription Agreements signed in November 0 oak,eaf Savings Estimates - 6.7% Subscriber Empire Seneca Total kWh Year 1 569,446 86,100 655,546 Nominal Savings $730,799 $1021384 $833,183 NPV of Savings $405,610 $56,007 $461,617 *Assumes 3% annual bill credit escalation Detailed Savings Estimates - 6.7% Empire Year Projected kWh - Entire Garden Subscriber's kWh Payment to Garden Operator $ kWh Bill Credit Rate $ kWh Subscriber's Payment to Garden Operator Subscriber Bill Credit from Xcel Subscriber's Savings NPV of Subscriber's Savings 2016 8,499,200 569,446 $0.0890 $0.09914 $50,681 $56,455 $5,774 $5,77 2017 8,456,704 566,599 $0.089 $0.1021 $50,427 $57,85E $7,43 $7,14 2018 8414,420 563,766 $0.089 $0.10511 $50,175 $59,29 $9,12 $8,43 2019 8,372,348 560,947 $0.089 $0.1083 $49,924 $60,76S $10,841 $9,64 2020 8,330,487 558,143 $0.089 $0.1115 $49,675 $62,27 $12,601 $10,77 2021 8,288,834 555,352 $0.089 $0.1149 $49,426 $63,82 $14,40 $11,83 2022 8,247,390 552,575 $0.089 $0.1183E $49,171 $65,413 $16,23 $12,83 2023 8,206,153 549,812 $0.089 $0.1219 $48,933 $67,038 $18,10 $13,75 2024 8,165,122 547,063 $0.089 $0.1255 $48,689 $68,70A $20,01E $14,62 2025 8,124,297 544,328 $0.089 $0.1293 $48,445 $70,412 $21,96 $15,43 2026 8,083,675 541,606 $0.089C $0.1332z $48,203 $72,161 $23,95E $16,18 2027 8,043,257 538,898 $0.089 $0.1372 $47,962 $73,955 $25,99 $16,88 2028 8,003,041 536,204 $0.089 $0.1413E $47,72 $75,792 $28,07 $17,53 2029 7,963,025 533,523 $0.089 $0.14551 $47,48z $77,676 $30,19 $18,13 2030 7,923,210 530,855 $0.089 $0.1499 $47,24 $79,606 $32,36 $18,68 2031 7,883,594 528,201 $0.089 $0.1544 $47,01 $81,584 $34,572 $19,19 2032 7,844,176 525 560 $0.089 $0.15901M $46,771 $83,614 $36,837 $19,W 2033 7,804,955 522,932 $0.089 $0.1638 $46,54A $85,68 $39,148 $20,09 2034 7,765,931 520,317 $0.089C $0.1687E $46,30 $87,81 $41,511 $20,49 2035 7,727,101 517,716 $0.089 $0.1738z $46,077 $90,00 $43,924 $20,84 2036 7,688,465 515,127 $0.089C $0.1790 $45,846 $92,23 $46,391 $21,17 2037 7,650,023 512,552 $0.089C $0.1844 $45,617 $94,53 $48,914 $21,46 2038 1 7,611,773 1 509,989 1 $0.089C $0.1899 $45,389 $96,87 $51,49 $21,72 2039 7,573,714 507,439 $0.089C $0.1956 $45,162 $99,28 $54,124 $21,96 2040 7,535,846 I 504,902 $0.089 $0.2015 $44,93q $101,75 $56,81 $21,31 Total I $1,193,83A $1,924,63A $730,791 $405,61 Bill credit projected to escalate 3% annually; NPV calculated using 4% discount rate leaf Detailed Savings Estimates - 6.7% Seneca Year Projected kWh - Entire Garden Subscriber's kWh Paymentto Garden Operator $ kWh Bill Credit Rate $ kWh Subscriber's Paymentto Garden O erator Subscriber Bill Credit from Xcel Subscriber's Savings NPV of Subscriber's Savings 2016 1,285,079 86,100 $0.093 $0.09914 $8,007 $8,53 $52 $52 2017 1,278,654 85,670 $0.093 $0.10211 $7,967 $8,74 $78 $75 2018 1,272,260 85,241 $0.093 $0.10SIH $7,92 $8,96 $1,03 $96 2019 1,265,899 84,815 $0.093 $0.10833 $7,88 $9,18 $1,30C $1,15 2020 1,259,570 84,391 $0.093C $0.1115f $7,84E $9,41 $1,56E $1,34 2021 1,253,272 83,969 $0.093C $0.1149 $7,80c $9,65 $1,841 $1,51 2022 1,247,005 83,549 $0.093C $0.1183 $7,77 $9,89 $2,12C $1,67 2023 1,240,770 83,132 $0.093C $0.1219 $7,731 $10,13 $2,40 $1,82 2024 1,234,566 82,716 $0.093C $0.1255 $7,693 $10,38 $2,69E $1,97 2025 1,228,394 82,302 $0.093 $0.1293 $7,654 $10,646 $2,99 $2,10 2026 1,222,252 81,891 $0.093 $0.1332z $7,616 $10,911 $3,29E $2,22 2027 1,216,140 81,481 $0.093 $0.1372 $7,57 $11,182 $3,60z $2,34 2028 1,210,060 81,074 $0.093C $0.1413 $7,54 $11,46 $3,92 $2,44 2029 1,204,009 80,669 $0.093 $0.1455 $7,50 $11,74 $4,24 $2,54 2030 1,197,989 80,265 $0.093C $0.1499 $7,46E $12,03 $4,57 $2,64 2031 1,191,999 79,864 $0.093 $0.1544 $7,42 $12,33E $4,90 $2,72 2032 1,186,039 79,465 $0.093 $0.1590 $7,39 $12,64 $5,25 $2,80 2033 1,180,109 79,067 $0.093 $0.1638 $7,35 $12,95 $5,60 $2,87 2034 1,174,209 78,672 $0.093 $0.1687E $7,316 $13,27E $5,96 $2,94 2035 1,168,338 78,279 $0.093 $0.1738z $7,28C $13,60 $6,32 $3,00 2036 1,162,496 77,887 $0.093 $0.1790 $7,244 $13,94 $6,70 $3,05 2037 1,156,683 77,498 $0.093C $0.1844 $7,207 $14,29 $7,08 $3,10 2038 1,150,900 77,110 $0.093C $0.1899 $7,17A $14,64 $7,47 $3,15 2039 11145,146 76 725 $0.093C $0.1956 $7,13 $15,01 $7,87 $3,19 2040 1,139,420 76,341 $0.093 $0.2015 $7,10 $15,38 $8,28 $3,10 Total I I I 1 1 $188,62 $291,004 $102,38 $56,00 Bill credit projected to escalate 3% annually; NPV calculated using 4% discount rate Questions & Contact Information Thank You For Your Time And Consideration Michael McCabe Oak Leaf Energy Partners 2645 E. 2nd Avenue, Ste. 206 Denver, CO 80206 303-893-6945 mike@oakleafep.com