Otsego County is currently in the process of developing a Power Purchase Agreement (PPA) with Solar City to build a 2.3 Mega Watt remote solar array that will provide net metering to offset electricity cost to all county owned and county leased facilities. In August 2013 Solar City responded to a Request for Proposal issued by the Municipal Electric & Gas Alliance (MEGA) and Tompkins County. The RFP was issued by MEGA on behalf of MEGA customers to establish a consultant that would respond to RFP’s related to renewable solar, micro-hydroelectric, and farm waste-to-energy funding sources. Otsego County is a member of MEGA. In early 2014, MEGA then formulated program agreements with Gravity and Solar City. Solar City submitted an application to NYSERDA’s program opportunity notice (PON) 2956 in July 2014 for solar projects in New York State and was awarded a contract for funding.
The Power Purchase Agreements (PPA) allows Otsego County to implement on-site renewable energy projects with no upfront capital costs. Solar City will install the solar array on county owned or leased property. Solar City is able to fully leverage government incentives and depreciation unavailable to the County. In exchange, the County agrees to purchase the power generated by the system. The PPA allows for the repayment of the upfront cost to the developer over a contract term; in this case 20 years. Solar City will own, operate and maintain the system for the life of the contract. At the end of the contract term, three options are available to the County: Renew the PPA, Purchase the system or have it removed at Solar City’s Cost. The County does have the option to purchase the system and take full ownership only after 6 years to avoid federal tax incentive penalty claw-backs.
Net metering means “spins backwards” Net metering is when the generation exceeds the load. Remote net metering (RNM) refers to a solar production that can offset offsite/non-adjacent loads. The energy source does not have to be adjacent to the energy user.
The Power Purchase Agreement (PPA) would provide a credit to the County for every solar kWh produced by the solar array that can be applied to the kWh’s used by the County’s facilities. For example, the County on average uses 241,120 kWh’s of electricity per month (current estimate without Manor). The County currently pays .12/kWh (includes all NYSEG delivery and Integrys supply charges). This equals approximately $ 28,934 per month. The fixed rate the County would pay Solar City for all power generated by the solar array is .069 (6.9 cents) per kWh. If the solar array produces 227,237 kWh’s in a month, the county would received the credit of $11,589 toward their utility bill. This is calculated by the difference of .12 kWh - .069 kWh = .051 x 227,237 kWh (solar produced). This could, hypothetically, amount to an annual savings of $100,000 or more.
The County and Solar City are in the process of evaluating possible sites for the project. The original application identified County owned property in Laurens, but has since been removed as a possible site due to the cost for interconnection with NYSEG. The County and Solar City are actively researching other possible locations.
The PPA is for 20 years with options to buy out of the agreement after six years and after 20 years, to buy, continue the PPA, or dismantle the site at the cost to the developer.
The County is faced with a deadline of January 15, 2015 to have a contract agreement. Members of the Board, the County Attorney, County Facilities Director, and the Planning Solid Waste Department are working to negotiate the contract terms.