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Posted on April 7, 2017
TALLAHASSEE — Customers of City of Tallahassee Utilities can soon use solar power without dealing with the complications and high costs of installing rooftop solar panels on their individual buildings, if a proposed plan is adopted by city commissioners.
There will be an open enrollment period for customers wanting to subscribe to the proposed city solar utility program, tentatively scheduled to begin on June 1 and to end on Dec. 31, 2017.
According to a solar farm status report prepared by City of Tallahassee’s Electric Utility General Manager Rob McGarrah for an April 5 meeting with the city, Tallahassee has entered an agreement with Origis Energy to develop two utility-scale solar photovoltaic (PV) facilities on city-owned property at the airport. Ground-breaking on the first facility is set for May 1.
Origis will build, own, operate and maintain the solar farms and the city will pay Origis for the energy delivered at contractually agreed-upon fixed prices for 20-years.
According to the report, by contracting with Origis, the city benefits from a 30 percent federal tax credit that is currently only available to private entities that develop solar PV facilities.
Over the 20-year initial contract, the first solar farm, a 20 megawatt (MW) facility, located at Tallahassee International Airport on 120 acres just south of the north/south runway, is expected to produce, on average, 37 million kilowatt-hours (kWh) of electricity each year. The second, a 40 MW facility, will produce 74 million kWh, for a total of 111 million kWh, but is not expected to come online until 2019.
“This equals the total energy needs of about 10,300 Tallahassee homes at average usage levels. The proposed customer participation program allows residential, small and medium-sized commercial customers to optionally subscribe for all or a portion of their monthly kWh electricity consumption to be designated as solar farm energy,” according to McGarrah’s report.
As proposed, customers can opt for either 25, 50 or 100 percent of their metered kWhs designated as solar farm energy.
A solar charge will be applied in place of the fuel charge which is paid by all customers to recover the cost of fossil fuels (primarily natural gas) burned to generate electricity in the City’s power plants.
According to the report, the charge is adjusted every six months and is based upon the price the city pays for natural gas.
“At 3.290 cents per kWh, this rate is currently at its lowest level since September of 2000, although in the past the fuel charge has risen as high as nine cents per kWh,” McGarrah wrote.
In lieu of the standard fuel charge, the kWhs customers designate as solar will be billed at a fixed rate of five cents per kWh for the 20-year initial term of the contract.
“Solar participants will initially pay a premium for solar farm service,” the report said, “since their solar usage is billed at a higher rate than under the current standard fuel charge (five cents versus about three cents). However, since it is projected that in the future the fuel charge will rise from its currently historically low levels, the differential between the rates will likely narrow, and it is expected the fuel charge will rise above five cents within the next 20 year. If this occurs, solar participants will pay less than the standard rate. The program offers participants the opportunity to lock in the rate they pay for a significant component of their electric bill.”
According to the report, the program will also be available to the City’s largest electric customers, those whose maximum demands exceeds 500 kW. These customers will be required to specify a fixed number of monthly kWhs that will be designated as solar farm energy, in lieu of the percentage options offered other customers. Energy subscriptions for commercial customers will be limited to 50 percent of the farm’s energy output.
Construction on the first facility should be completed by August. Planning for the second farm is also underway and construction will begin in 2019 following all approval processes.
At its February 25, 2015 meeting the City Commission authorized staff to issue a request for proposal to secure a 10-megawatt (MW) utility-scale solar PV project. Eleven firms submitted proposals, and at the June 17, 2015 commission meeting the selection committee’s final ranking was presented. The top ranked vendor withdrew. The City then selected the second-ranked vendor, Orgis.
During negotiations with Orgis, staff recognized the opportunity to increase the size of the project and realize additional savings. At its Feb. 24, 2016 meeting the Commission gave its approval to double the size of the project, from 10 MW to 20 MW of capacity, and authorized the city manager to execute a related Power Purchase Agreement (PPA) and land lease with Origis.
The PPA between the city and Origis was executed on July 21, 2016.