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0a REQUEST FOR COUNCIL ACTION Attachment A Date: August 13, 2018 Item No.: Department Approval City Manager Approval Item Description: Approve Community Solar Garden Subscription Agreement 1 BACKGROUND 2 On May 14, 2018, staff presented an update to the City Council on current efforts to use and s promote solar energy on or off campus. One of the ideas presented, as proposed by Roseville 4 based IPS Solar, a Solar Developer organizing Community Solar Gardens, was to subscribe to 5 one or more Community Solar Gardens. o From a CERTs (Clean Energy Resource Team) document, "Community Solar Gardens (also 7 called Community Solar and Community -Shared Solar) are centrally located solar photovoltaic a (PV) systems that produce electricity for participating subscribers. They are a way for people in 9 Minnesota to benefit from solar PV systems without installing their own stand-alone project. U Programs vary by utility in Minnesota. Many cooperative utility customers can subscribe to a 11 project owned by their local utility. Customers served by Xcel Energy can participate in projects 12 offered by private Community Solar Garden Operators." 13 For the City of Roseville, participating in one or more Community Solar Gardens would provide 14 open advocacy and support of renewable, clean energy. It would allow the City to lead by 15 example, learn from the administration and start up of this program, and allow the City to 16 provide some answers and guidance to others in the City that are considering this program. It n would also provide incremental savings on the City's electric bills for the meters that are 18 subscribed to the Community Solar Garden. 19 As a subscriber to one or more Community Solar Garden (CSG) projects, the City would pay the 20 Operator of each CSG a set Power Purchase Agreement (PPA) rate per kilowatt hour (kWh) 21 produced that we have subscribed to. The City would then receive a credit from Xcel, which zz would be slightly higher than the Power Purchase rate, on the following month's bill. 23 Meanwhile, we are paying Xcel our normal rates for any energy the City consumes off the grid. 24 The terms of this Agreement specify a 25 year term for each CSG the City subscribes to, but sets 25 the Power Purchase Agreement (PPA) rate at $0.0926 for Year 1 and also sets the escalator for 20 each CSG at 2.27% annually. Xcel's Bill Credit is currently at $0.1033 and the escalator would 25 currently be locked in at 2.3% annually for 25 years. This agreement allocates 2 million kWh of 28 the City's more than 4 million kWh of on campus consumption to New Energy Equity, LLC (the 20 identified operator) for CSG subscriptions. If, within two years, they do not subscribe us to that so full allocation, we will be able to allocate that consumption to a different CSG provider, or more 31 on site solar PV systems. 32 In actual dollars, in Year 1 the City would net $0.0107 ($0.1033 - $0.0926) per kWh produced 33 through our subscription. By Year 25 that net amount would be $0.0196 per kWh produced. 34 Exhibit G of the Subscription Agreement (Attachment B) shows the Calculation of Estimated Page 1 of 2