2015-11-24_PWETC_Minutes - Laserfiche WebLink

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At the request of Chair Stenlund, Mr. Kroll reviewed the pros and cons of the system to ensure it was a win -win-win for Roseville. Mr. Kroll advised that Sundial Solar had to guarantee the investor a certain amount of production to get their bottom line and noted that Sundial was contracted by them to monitor and maintain the system accordingly. Mr. Kroll assured the PWETC that the investor won based on a minimum amount of production and it remained intact in the form of energy savings guaranteed to the city as long as the minimum amount of production was there; and the city would win through a minimum annual cash flow amount of $7,000 plus depending on final credit calculations; and as the escalator goes up annually and Xcel Energy approves the blended rate as allowed by the Public Utilities Commission (PUC). Mr. Kroll reported that historical averages for Xcel over the last 15 years were positive and the savings would be spread out to increase each year for the solar array as designed. At the request of Member Cihacek, Mr. Kroll reviewed the operating and maintenance plan by Sundial for web -based solar monitoring 24/7 that would be included in the PPA, and advised that if and should their firm no longer be around, or sold to or merged with another, their maintenance rates were standard across- the-board from one company to another and maintenance also fairly standard for a solar array system. Mr. Kroll opined that, if the city ever had to go to the market on a needs -only basis for maintenance, they would probably get a better rate than the investor would receive in the PPA, but as long as the PPA remained in effect, noted this would never be a concern of the city, since the problem is the investor's responsibility as owner of the system. If the City chose a buy-out option, Mr. Kroll advised that the operation and maintenance would then become their concern to contract out. Mr. Kroll advised that Sundial Solar prided itself on making sure, if anything like their demise should ever occur and their clients fell to a successor that the successor would pick up Sundial's responsibilities At the request of Member Cihacek, Mr. Kroll summarized the buy-out option available to the City after the first six years, per Internal Revenue Service (IRS) requirements that the investor had to retain the system for the first five years and could not exit the arrangement. If the city then opted to purchase the system they could have it appraised, in accordance with PPA language, by a third party for the city's purchase and discontinue the twenty-year agreement, with the investor required to return the roof as found or the city purchasing the system. Given the IRS requirements beyond seven years, Mr. Kroll advised that the buyout system was almost negligible at the end of the twenty-year term. Under the structure he proposed in his presentation, Mr. Kroll advised that the city could obtain a 3% financing option from a variety of sources if it decided to gain ownership of the system in year 7, and then become responsible for the value of the system and any operating and maintenance. Based on the difference with city ownership, Mr. Kroll advised that the major difference in the buy-out structure he had originally presented afew months ago with the anticipated original investor he presented was that this is an, industry -standard rate and structure with no creative loopholes of the