2015-01-27_PWETC_AgendaPacket - Laserfiche WebLink

Home

without following usual competitive bidding requirements. There are other requirements in the statute that must be complied with for these projects. Additional options include a direct purchase options whereby the City purchases a solar installation financed with a loan through the St Paul Port Authority or other funds. In this case, some upfront funding may or may not be required although this could also be offset by allowing a private company to provide additional financing so that they may take advantage of tax credits. The Public Works, Environment and Transportation Commission has discussed this item at several meetings this year. In November, the Commission made the following recommendation to the Council: Member Cihacek moved, Member Felice seconded, recommending staff to recommend to the City Council that they initiate the process and associated analyses and solicit proposals and pro formas for comparison purposes, for a three part solar system to investigate three programs: Made in Minnesota, a Power Purchase Agreement, and a 100 KW Direct Purchase Solar system; and to pursue those programs in accordance with Minnesota Statutes, Chapter 471, and related requirements; with the purpose of determining which option offers the best financial return to the City. City staff has proceeded to solicit proposals from solar installers and has received two proposals from Newport Energy and TruNorth Solar with the intent of authorizing one of the companies to submit two Made in Minnesota Solar Incentive applications, one for City Hall and one for the fire station. It is expected that there will be far more applications than the available funding can support so there is no guarantee the city will be successful in securing this incentive. If the City is successful on one or both of the applications, we would continue with the installation of said system(s) in 2015. Below is a matrix comparing the two proposals. Based on the proposals, staff is recommending that we proceed with TruNorth Solar for the Made in Minnesota Solar Incentive applications. While TruNorth's long term energy savings are less than Newport in the below information, their analysis did not include any tax credit equity financing. Implementation would realize an estimated additional 40% reduction in the principal cost of the system and therefore realize a shorter payoff period and larger long term energy savings. Staff will provide more detail at the council meeting on the long term savings. Please note that these applications are done at no cost to the City. All design and installation costs are included in the overall system cost. **Figures do not account for Tax Equity Partner which can decrease cost to city by 40-50% and reduce break point to 6 years Concurrently with this application process, City staff will continue to explore options for a larger system (estimated at 100kW) and use either the Power Purchase or Direct Purchase options. This would be brought back to Council at a later date with a final recommendation and request 20 Year Break point Cash Option Rooftop Lease Installation Cost Energy (years after Proposer Down Cost Payment to City to City Savings install) Newport Energy Yes Yes Yes $0.00 $74,133.00 9 TruNorth** No Yes No $0.00 $57,800.00 11 **Figures do not account for Tax Equity Partner which can decrease cost to city by 40-50% and reduce break point to 6 years Concurrently with this application process, City staff will continue to explore options for a larger system (estimated at 100kW) and use either the Power Purchase or Direct Purchase options. This would be brought back to Council at a later date with a final recommendation and request