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�_ TruNorth's proposals are financed largely by an Energy Partnership Loan from the St Paul Port �� Authority. Both options would have loans at 2.5% with 15 year terms. The TruNorth Solar A � proposal is a Power Purchase Agreement whereby the City will purchase 50% of the power � generated from the system from TruNorth at a rate of $0.075 per kWh, and will realize full � savings on the remaining 50% of the power. Therefare, in year 1, the City will save an estimated $0.035 per kWh for half of the energy produced and an estimated $0.11 per kWh for the other � half of the energy produced. Those savings would offset the cost of the loan and result in total < estimated annual savings of $2,125.00. The Power Purchase rate would increase 2.75% � The TruNorth Solar B proposal would be a Direct Purchase option whereby the City is not �_ purchasing power from TruNorth, and thereby the City finances a larger share of the installation � cost with the St Paul Port Authority Loan; $294,000 vs $200,000 in option A. However, the City . then realizes the full energy savings immediately, thereby the larger loan payment is offset with . larger energy savings resulting in an estimated annual savings of $4,250.00. The remaining cost � of the system will be financed by a tax equity partner that will receive tax credits for the solar � system. .. Both of TruNorth's proposals would require a buyout at some year for the City to own the � system outright. The Power Purchase Agreement Option would have a larger buyout and would . be based on the Fair Market Value at the year of the buyout. TruNorth indicated the option � would be available to the City in year seven (7). An estimated value was not provided. - Sundial Solar's proposal is much more detailed and uses some more creative financing to � provide the City with full ownership of a much larger system, 375kW vs 200 kW, in year six (6) ��: without any upfront costs or required financing on the City's part. The bulk of the financing - would be realized through a Power Purchase Agreement whereby the City would purchase all of - the power produced by the system at a starting price of $0.09 per kWh. Sundial also used an ��- estimated cost of $0.11 per kWh for our current price of electricity, so all savings are based on that difference. Based on that difference it is estimated the City will save approximately $9,217 annually. Over 25 years, that would translate to over $230,000 in energy savings. The real difference in this proposal from Sundial, besides not having the annual loan payment, is �_� that we are being offered full ownership of the system in year 6. At that point, the City would ��_ pay for 5% of the Fair Market Value of the system, estimated at $39,375, and the remaining 95% � of the value would be donated to the City as a charitable contribution from the tax equity partner. �. � If the City does own the system outright in year 6 without any additional debt service, the City ��. would realize an additional minimum savings of $500,000 (for a total of $730,000 minimum) � over 25 years, as a result of not purchasing the power from the developer beyond year 5. � The Sundial Solar proposal also makes reference to potentially available Solar Capacity Credits �� that are currently available for large solar installations at approximately $0.053 per kWh, which ��: further helps to finance the overall cost of the installation. Although there are no guarantees, it is .. possible these credits will still be available to the City once it has full ownership allowing the �� City to collect those credits and increase the overall savings. ��. The next step would be to sign a non-binding Letter of Intent with the chosen developer, after E�� review and approval by the City Attorney, and negotiate an agreement with final terms as �: � determined by considering the actual costs of the power consumed at the Skating Center. This t agreement would then be brought before the PWET Commission at the end of August and, if F�� recommended by the Commission, presented to the City Council at their September 14, 2015 - City Council meeting. Page 2 of 3