2016-02-23_PWETC_AgendaPacket - Laserfiche WebLink

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308 At the request of Member Cihacek, Mr. Culver further confirmed that he had 309 asked that the city's escalator be included in the agreement even if Excel's rates 310 don't change, which Sundial Solar considered not to be problematic and 311 proposing language in the power purchase agreement that the city would never 312 pay more than the Xcel Energy rate. 313 314 Member Cihacek noted that the only difference or unknown was with the 315 escalator and Xcel rate was as the type of energy changes and the escalator model 316 changes, and if that always stayed comparable to what the city would have had 317 before this agreement. 318 319 Member Seigler expressed his concerns, admitting he didn't understand the 320 proposed numbers at all and extension of the tax credits. Member Seigler 321 questioned the rush to recommend this agreement, since recent legislation had 322 extended the Made in Minnesota program until 2023. Member Seigler suggested 323 waiting another year, questioning if this is a good deal or only an average deal, 324 and whether the Made in Minnesota rant should be incorporat, into this solar 325 plan. 326 �.. 327 Mr. Culver clarified that the city was still pursuing that grant option a well, but 328 noted the differences in that program compared with this, and maximum amount 329 of 40 KWh, with staff pursuing that solar application for potential use on smaller 330 roofs on campus, such as City Hall, the Police and/or Fire Station roofs. Given 331 the size of This system, even with a grant from Made in Minnesota, Mr. Culver 332 opined thd it would be difficult for the city to fund on, its own and other than 333 through this type of power purchase agreement. Mr. Culver noted that this solar 334 system is considerably larger and provides significant savings. Mr. Culver noted 335 that two proposals had been initially received during the summer of 2015, based 336 on assumptions that tax credit of o run out, even though they were 337ubsequently extended. Mr. Culve rted that in talking to Sundial Solar and 338 wing held numerous conversations with other developers over the last 1.5 years 339 ould recommend this as the best deal from staff's perspective especially 340 si e city didn't have to upfront any down payment or pay toward the system, 341 whil ng an immediate return with little if any investment. 342 343 Discussion ued regarding blended rates, current Xcel Energy rate, and further 344 review of the pread sheet; the escalator versus static rates; and other financial 345 variables and considerations. 346 347 Member Cihacek noted that the power purchase agreement provides a positive 348 cash flow and actualized savings for the city in year one; with Mr. Johnson 349 confirming that the City would save approximately $8,000 in energy costs in year 350 one. Member Cihacek opined that this proposal represents the least risk to the 351 city, and for the benefit of Member Seigler, noted the only unknowns were 352 regarding the escalator rate and clarifications currently being concluded by staff. 353 Page 8 of 20