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Home My WebLink AboutItem 4City of Lakeville Administration Memorandum To: Mayor and City Council From: Justin Miller, City Administrator Date: January 28, 2019 Subject: ReneSola Solar Subscription Proposal The City of Lakeville has entered into two separate solar subscription agreements. The first agreement was with Oak Leaf Partners for a solar garden at the Empire Wastewater Treatment Facility. The second agreement, with US Solar, was approved by the city council in 2018 and is currently under construction. The City has been approached by a third company named ReneSola that would be structured similar to the US Solar proposal. The City would pay a subscription fee to the solar farm developer which is offset by a bill credit from Xcel Energy. In their proposal, ReneSola projects overall 25-year savings to the City of Lakeville between $1.9 million to $2.1 million, depending on which model we choose. Option 1 ($1.9 million in projected savings) incorporates an escalator option where the city’s subscription rate starts low then escalates throughout the agreement. This structure provides greater savings in early years but is less attractive over 25 years. Option 2 ($2.1 million in projected savings) has a fixed subscription rate throughout the agreement. The early-year savings are lower, but the overall value of the agreement is higher. We have the ability to subscribe to 120% of our electricity usage through solar subscription services. This agreement with ReneSola would max out the city’s capacity through this program. We now have two years of data for the first agreement the City entered into. Below is a chart showing the initial projections as well as how the actual numbers have come in: Projected Savings Actual Savings Difference Notes 2017 $5545 $4071 ($1474) In service 11 months of the year 2018 $6806 $6293 ($513) It is worth noting that currently this program is only available through Xcel Energy. Large electricity using city facilities in the Xcel Energy territory include: • City Hall • Heritage Center • Ames and Hasse Ice Arenas • Lakeville Area Arts Center Not included in the Xcel Energy territory (Dakota Electric area) city facilities include: • Central Maintenance Facility • Water Treatment Facility If this agreement were approved, we could legitimately state that all electricity needs of city facilities in Xcel Energy territory was being supplied by solar energy. Staff is seeking direction from the City Council if there is interest in entering into another solar subscription agreement with ReneSola. 850 Canal Street, Third Floor, Stamford, Connecticut 06902XCEL ENERGY SOLAR REWARDS COMMUNITYS U B S C R I P T I O N S AV I N G S P R O P O S A LC I T Y O F L A K E V I L L E2 0 1 8 CONFIDENTIAL – DO NOT DISTRIBUTE2Solar Rewards Community (SRC) Program key features:Solar Rewards Community (SRC) Program key features:Solar Rewards Community (SRC) Program key features:Solar Rewards Community (SRC) Program key features:•Program mandated by legislation 216B.1641, September 2013•Bill Credit amount changes annually, according to the Applicable Retail Rate (ARR) •Community Solar Garden (CSG) and subscribers must be in Xcel territory•Subscriber must be in the same or adjacent county as the CSG•No subscriber can have more than 40% of a single CSG•Allowed to subscribe up to 120% of 12 months average annual usage•Each CSG needs at least 5 subscribers•CSG agreements with Xcel are for 25 years•No upfront costs to subscribers•No system maintenance costs for subscribersXCEL ENERGY SRC PROGRAM CONFIDENTIAL – DO NOT DISTRIBUTE3HOW IT WORKS – COMMUNITY SOLAR•Monthly Xcel Energy Bill Credit Monthly Xcel Energy Bill Credit Monthly Xcel Energy Bill Credit Monthly Xcel Energy Bill Credit ---- based on actual production of solar garden for that month.•Monthly Invoice/Payment to solar garden Monthly Invoice/Payment to solar garden Monthly Invoice/Payment to solar garden Monthly Invoice/Payment to solar garden –––– based on actual production of solar garden for that month.•Estimated savings Estimated savings Estimated savings Estimated savings –––– Xcel ARR Credit ($0.12515 / kWh) is greater than solar garden payment ($0.1128 / kWh) CONFIDENTIAL – DO NOT DISTRIBUTE4The City of Lakeville The City of Lakeville The City of Lakeville The City of Lakeville Subscription Allocation:Subscription Allocation:Subscription Allocation:Subscription Allocation:ReneSola has 4.4 MW of available subscription in Rice County:•1,851,950 kWh of community solar subscription•Equates to about 120% of the City’s total annual usage (including the 2 previous subscription solar agreements)SUBSCRIPTION SIZE CONFIDENTIAL – DO NOT DISTRIBUTE5Total estimated savings from subscription: Total estimated savings from subscription: Total estimated savings from subscription: Total estimated savings from subscription: Solar garden flat rate option: $0.124 / kWhSolar garden escalator option: $0.1128 / kWh w/ 1% annual escalatorXcel ARR Credit rate (2018): $0.12515 / kWhXcel ARR credit projected to increase on average 2.6% annually*Detailed annual estimated savings can be found here:ESTIMATED SAVINGS CONFIDENTIAL – DO NOT DISTRIBUTE6PROFORMA – ESCALATOR OPTIONSubscription Size:Subscription Size:Subscription Size:Subscription Size:•1,851,950 kWh (120% of total annual usage).Solar garden escalator option: Solar garden escalator option: Solar garden escalator option: Solar garden escalator option: •$0.1128 / kWh w/ 1% annual escalatorXcel ARR Credit rate (2018): Xcel ARR Credit rate (2018): Xcel ARR Credit rate (2018): Xcel ARR Credit rate (2018): •$0.12515 / kWhXcel ARR credit projected to Xcel ARR credit projected to Xcel ARR credit projected to Xcel ARR credit projected to increase on average: increase on average: increase on average: increase on average: •2.6% annuallyEstimated savings over 25yr Estimated savings over 25yr Estimated savings over 25yr Estimated savings over 25yr subscription: subscription: subscription: subscription: • $1,963,900YearSubscription Size (kWh) Xcel Credit ($/kWh)Subscription Rate ($/kWh)Net Annual Savings11,851,151 $0.1252 $0.1128$22,900 21,841,900 $0.1284 $0.1139$26,800 31,832,700 $0.1317 $0.1151$30,700 41,823,500 $0.1352 $0.1162$34,600 51,814,400 $0.1387 $0.1174$38,800 61,805,300 $0.1423 $0.1186$42,900 71,796,300 $0.1460 $0.1197$47,300 81,787,300 $0.1498 $0.1209$51,700 91,778,400 $0.1537 $0.1221$56,100 101,769,500 $0.1577 $0.1234$60,900 111,760,700 $0.1618 $0.1246$65,600 121,751,900 $0.1660 $0.1258$70,400 131,743,100 $0.1703 $0.1271$75,400 141,734,400 $0.1747 $0.1284$80,500 151,725,700 $0.1793 $0.1297$85,700 161,717,100 $0.1839 $0.1310$91,100 171,708,500 $0.1887 $0.1323$96,600 181,700,000 $0.1936 $0.1336$102,100 191,691,500 $0.1986 $0.1349$107,900 201,683,000 $0.2038 $0.1363$113,800 211,674,600 $0.2091 $0.1376$119,800 221,666,200 $0.2145 $0.1390$125,900 231,657,900 $0.2201 $0.1404$132,300 241,649,600 $0.2259 $0.1418$138,700 251,641,400 $0.2317 $0.1432$145,400 Total savings:$1,963,900 CONFIDENTIAL – DO NOT DISTRIBUTE7PROFORMA – FLAT RATE OPTIONSubscription Subscription Subscription Subscription Size:Size:Size:Size:•1,851,950` kWh (120% of total annual usage).Solar garden Flat Rate option: Solar garden Flat Rate option: Solar garden Flat Rate option: Solar garden Flat Rate option: •$0.1240 / kWhXcel ARR Credit rate (2018): Xcel ARR Credit rate (2018): Xcel ARR Credit rate (2018): Xcel ARR Credit rate (2018): •$0.12515 / kWhXcel ARR credit projected to Xcel ARR credit projected to Xcel ARR credit projected to Xcel ARR credit projected to increase on average: increase on average: increase on average: increase on average: •2.6% annuallyEstimated savings over 25yr Estimated savings over 25yr Estimated savings over 25yr Estimated savings over 25yr subscription: subscription: subscription: subscription: • $2,099,000YearSubscription Size (kWh) Xcel Credit ($/kWh)Subscription Rate ($/kWh)Net Annual Savings11,851,151 $0.1252 $0.1240$2,200 21,841,900 $0.1284 $0.1240$8,300 31,832,700 $0.1317 $0.1240$14,300 41,823,500 $0.1352 $0.1240$20,400 51,814,400 $0.1387 $0.1240$26,800 61,805,300 $0.1423 $0.1240$33,100 71,796,300 $0.1460 $0.1240$39,600 81,787,300 $0.1498 $0.1240$46,200 91,778,400 $0.1537 $0.1240$52,800 101,769,500 $0.1577 $0.1240$59,700 111,760,700 $0.1618 $0.1240$66,600 121,751,900 $0.1660 $0.1240$73,600 131,743,100 $0.1703 $0.1240$80,800 141,734,400 $0.1747 $0.1240$88,100 151,725,700 $0.1793 $0.1240$95,500 161,717,100 $0.1839 $0.1240$103,000 171,708,500 $0.1887 $0.1240$110,700 181,700,000 $0.1936 $0.1240$118,400 191,691,500 $0.1986 $0.1240$126,400 201,683,000 $0.2038 $0.1240$134,500 211,674,600 $0.2091 $0.1240$142,600 221,666,200 $0.2145 $0.1240$150,900 231,657,900 $0.2201 $0.1240$159,500 241,649,600 $0.2259 $0.1240$168,100 251,641,400 $0.2317 $0.1240$176,900 Total savings:$2,099,000 CONFIDENTIAL – DO NOT DISTRIBUTE8Northfield Solar (5 MW): 7281 115thSt E, Northfield MN 55057Walcott Solar (4 MW): 24230 Albers Ave, Faribault MN 55052Warsaw Solar (2 MW): 24950 Farwell Ave, Morristown, MN 55052GARDEN LOCATIONSProject Status:Project Status:Project Status:Project Status:•Xcel Applications Approved•Interconnection agreements in place•Site control, leases in place•Local permits in process•Construction Start Q1 2019Estimated completion timeline: Estimated completion timeline: Estimated completion timeline: Estimated completion timeline: •Q3 2019 CONFIDENTIAL – DO NOT DISTRIBUTE9REFERENCE PROJECTSDundas Solar LLC – 5 MW community solar garden facility COD January 2018Address: 9634 Dundas Blvd., Northfield, MN 55057Waterville Solar LLC – 5 MW community solar garden facility COD January 2018Address: 51830 147th Ave, Waterville, MN 56096 CONFIDENTIAL – DO NOT DISTRIBUTE10REFERENCE SUBSCRIBERSCity of Jordan, MN – Participating SubscriberLocated in Scott County along the Minnesota River, the City of Jordan has a population of over 5,000 residents. A short drive from St. Cloud, Jordan maintains a number of city parks, has a well established police and fire department, and a historic downtown district. The City of Jordan has committed subscription to our Le Sueur County 5 MW garden.The Council provides essential services and infrastructure - Metro Transit's bus and rail system, Metro Mobility, Transit Link, wastewater treatment services, regional parks, planning, affordable housing, and more - that support communities and businesses and ensure a high quality of life for residents. The Met Council is a participating subscriber to our Rice County Dundas Solar 5 MW solar gardens as well as other gardens.Mankato Clinic – Participating SubscriberThe Mankato Clinic is one of Minnesota's largest physician owned, multispecialty regional group practices, with 135 providers located across ten sites in five communities, including Mankato, North Mankato, St. Peter, Mapleton and Lake Crystal. The Mankato Clinic and satellite locations employ over 750 people, and rank among the top 15 employers in the region. The Mankato Clinic has committed subscription to our Le Sueur County 5 MW garden. CONFIDENTIAL – DO NOT DISTRIBUTE11RENESOLA POWER HOLDINGSReneSola (NYSE:SOL) is a leading international brand in solar project development, construction, operations and asset management. The company has teams in 10 countries, including major solar power markets such as China, the US, Canada, the UK, France, Spain, Turkey, Poland, Japan, and Thailand. We have over 300 employees, completed over 500 MW of solar projects and operate over 150 MW. Our unique business model allows us to bring global and national scale at a local level. In Minnesota, we are working on 50+ MW of community solar gardens throughout the state. CONFIDENTIAL – DO NOT DISTRIBUTE12- Thank You -Jen ZellerBusiness Development Manager612-272-1869jennifer.zeller@renesolapower.com