HomeMy WebLinkAboutX-C-02 Solar Subscription OpportunitiesCityCouncilMemorandum
To: MayorFasbender & CityCouncilmembers
From: CouncilmemberFolch
Date: April1, 2019
Item: SolarSubscriptionOpportunities
CouncilActionRequested:
Motionto refer reviewof2019solarsubscription opportunitiestotheHastings Planning
Commission forarecommendation tobebrought forward.
BackgroundInformation:
Overthepastthreeyears, anever-growingnumber ofMinnesota citiesandschooldistricts
havebeensigningupforsolargardensubscriptionstosavesignificant amountsonCity
electricaloperation expenses. Thesecommunity solar gardensubscriptions are25-year
contractswiththird-partyvendorswithnoupfrontcoststosubscribers. Inspring2017, I
broughtforward totheCounciltheissuefortheCityof Hastingstoreceiveproposalsfor
solarsubscriptions. InJune2017, Staffsolicitated solarsubscriptions. Atthetime, the
CityreceivedtwoproposalsfromReneSolaandInnovatePowerSystems (IPS). Thebetter
ofthetwoproposals received atthetime wasReneSolawhichinitiallygaveasolution that
wouldsave anestimated $4millionofelectricalcostsover25years.
FortheCityCouncil MeetingonAugust21, 2017, theCityAdministratorplaced the
proposalontheCouncilConsentAgendaforapprovalwithoutbeingreview byany City
commission orCouncilCommitteeinadvance. Ipulledtheitemfordiscussionbeingtold
thataReneSolarepresentative would bepresent toprovidetheCouncilasawhole
backgroundinformation; however, theCityAdministrator informedtherepresentativenot
toattend. AtthatCouncil meeting, theproposalwasreferredtotheUtilitiesCommitteeof
theCouncilforconsideration.
Intheweeksthatfollowed, the CityAdministrator madearrangements withtheUtilities
Committee Chair, Councilmember LoriBrauks, tohaveaphoneconferencecallwhere
twoofthethreeCommittee members calledin, Councilmembers BrauksandLund,
CouncilmemberBalsenek did notparticipate. Withoutholdingaseconddiscussion, ora
meetingof theUtilitiesCommitteethatmeetsthedefinitionof theOpen Meeting Law,
ChairLoriBraucksandCouncilmemberLunddidnotrecommend approvalofthe
proposalto theCouncil. Twoprimaryreasons citedforrejectionwasthatitseemedtoo
riskyastheyconsidered the contracttermination clausepenaltiesastoohigh andthe
lengthofthecontracttermsfor25yearswastoolong. AttheCouncil MeetingonOctober
2, 2017, theCouncilmoved torejecttheproposal.
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Inthe pasttwoyears, ReneSolarhascontinued tohavecitiesand schooldistrictssignon
Hasting Schoolforsolarsubscriptions. Most recently, inthepastseveralmonths, the
DistricthasenteredintoanagreementwithReneSolarfora25-year contract term
thatwillsavethe schooldistrictanestimated $100,000peryearBelowarethenames
ofotherMinnesotacitiesalonethathavelockedintosimilaragreementswiththis
company.
Burnsville Stillwater
Mendota Heights StCloud
Rosemount Gibbon
Lakeville NewAuburn
Minneapolis Franklin
Mantorville ChisagoCity
Renville Jordan
InDecember 2018, IrequestedupdatedinformationfromReneSolar andIPSastherate
structuresforsolarsubscriptionshaschanged. Xcel Energy hasgrandfatheredinsolar
gardensthathadbeenpreviously approvedtoallowthemost significantratesavings.
rates. ReneSolar provided tworatestructureopportunitiesforHastingsifitsubscribedfor
itsmaximumamountofelectricity whichis5,760,000kWh. Eachproposalhadan
estimatedtotalsavingsof $6millionover25years. InJanuary, Irequestedthatthenew
chairoftheUtilitiesCommittee oftheCouncil, Councilmember Balsenek, holdameeting
todiscussnew proposalsbutthatmeetinghasnot beencalled. Thispastweek, Icontacted
cities ofEaganandReneSolartoinquireiftheproposalwasstillvalidandwastoldthe
RosemountarevotingearlyinApril totakeadvantagetheremainingsubscriptionsatthe
bestrate.
IadditionallyreceivedarevisedproposalfromIPS andaskedforthenamesofthe20
theUniversityofcitiesandschooldistrictswhichtheyhavesubscriptionswhichinclude:
MN, theMetCouncil, theSt. Cloud School District, RedWingSchoolDistrict, City
ofMapleGrove, BlueEarthCounty, and CityofMinnetonka.
IamaskingfortheHastingsPlanningCommission toreviewupdated proposals, rate
structuresandcontract termstodetermine whatfinancialsavingsopportunities theCity
cantakeadvantage. Thiswillallowforanindependent reviewofinformationfrom the
Council.
FinancialImpact:
Possibly $1to $4 millionofsavingsover25years
Advisory CommissionDiscussion:
N/A
CouncilCommittee Discussion:
N/A
Attachments:
IPSnewGuaranteedSolarSavingsoverview. Proposalsareconfidentialandcannot be
included inCouncilpacketmaterials
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IPS Solar | 2670 Patton Road, Roseville, MN | 651-789-5305 | www.ips-solar.com
Guaranteed Savings
Our Community Solar Garden subscription rates offer 25-year savings of $15K- $1M. These rates, along with the Xcel Energy bill credits, are defined up-front, allowing us to guarantee your savings for all 25 years and make this a no-risk opportunity. Because the construction and operation of the off-site gardens is financed by our partners, no out-of-pocket money is needed to join a garden.
Zero Risk Instead of fluctuating with the retail rate of electricity, Value of Solar (VOS) bill credits are locked in at a consistant rate for 25 years. As energy costs continue to rise subscriber savings will be uneffected. Using VOS allows us to offer the security of guaranteed savings over 25 years without any of the acompanying risk.
How Much is Solar Worth?
Minnesota’s Value of Solar Tariff redefines the way solar production will be evaluated. VOS looks at the
economic benefits as well as social and environmental benefits that solar provides in order to get a complete picture of its value. For the first time solar energy producers will be compensated for the full value of the
energy that they produce!
GUARANTEED SOLAR SAVINGS
Subscription Size 1st-Year Savings*25-Year Savings*
500,000 kWh / yr $2,500 $77,000
2,000,000 kWh / yr $10,000 $310,000
5,000,000 kWh / yr $25,000 $776,000
*Estimated
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