Tuesday, November 9th, 2010
Buy for solar up in the air
Special council meeting set Monday for further talks
By William Kincaid
CELINA - City council members held an executive session Monday evening to discuss the possibility of a land purchase and sale related to construction of a proposed privately-owned solar power plant in the city.
No action was taken following the session, but a special council meeting to continue the discussion is scheduled for 5:30 p.m. Monday at the city's utility conference room.
Solar Vision LLC of Westerville came to the city last week with an offer to finance, construct and operate a solar electric power generation system in Celina.
The company said it would pay the city a one-time lump payment of $600,000 to lease 24 acres of land for a plant. The company also wants the city to purchase 3 megawatts of electricity - all of the plant's output - at $70 a megawatt-hour the first 10 years.
The city could then either purchase the solar plant at the fair market value or continue to purchase electricity at a rate 15 percent less than the market value for the next 10 years, according to Celina Planning and Community Development Director Kent Bryan.
The city doesn't have 24 acres of land available for lease.
Bryan said if the city purchased land in excess of the 24 acres needed by Solar Vision, the city could use the property for new sludge ponds to replace those located on South Main Street as well as an area to dump dredged material from Grand Lake.
Bryan said everything - including the design, engineering, construction, extension of power lines to the city, operation and maintenance - would be paid for by the company.
Solar Vision officials - president Greg Kuss and vice-president Mike Dickman - attended council's regular meeting Monday night.
"You only buy what we make," Kuss told council members.
Currently, municipal electricity providers such as Celina are not required to have renewable, green energy, Bryan said. However, that may change in the future.
Council members wrestled with projected electric costs. Last week, safety service director Rick Bachelor said a megawatt-hour is now selling anywhere from $38 to $40. City consultants have projected that rate to increase to between $47 and $56 from 2015 to 2020, he said.
On Monday night, council members were also presented with a projection from consultant of Sawvel & Associates. Bryan said the projection was an average of $51.71 for a six-year period from 2015 to 2020.
"The numbers are all over," Bachelor said.
Mayor Sharon LaRue asked how the city would benefit from the deal if it is not required to have solar power in its portfolio.
Bryan said the city would receive the $600,000 from the company to lease the land. That money could be used toward the purchase of the land for the solar plant and sludge ponds.
By moving the sludge ponds, which the city needs to invest in anyway, and having a place to dump sediment from a dredging operation at the northwest corner of the lake, the city could further protect its drinking water, Bryan said.
When asked by councilman Bill Sell why the city should invest with Solar Vision, Kuss said it would be a great PR value to the city, which would act as an environmental steward.
Asked by councilman June Scott why the company does not buy its own land, Dickman said there are regulations that make leasing land from the city the easiest and best option.
Further pressed, Dickman said regulations make it difficult for the company to purchase land and produce electricity, which would make it a utility.
Councilman Jeff Larmore said the city could tell the company to pick up and leave after the 20-year agreement and use the land for something else.
The company is working under time restrictions to make the project eligible for tax credits. It has asked the city to make a decision on the deal by Nov. 15.