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installation is proposed to be on the slope between City Hall and County Road C <br />with the actual location and layout to be determined. <br />Mr. Solem explained that rooftop installations are shown to maximize savings <br />given the City's usable space and building energy consumption. The economics <br />included in the proposals show the revenue and costs associated with the arrays <br />were a 40 -year timeframe with a buyout option at year 18. iDeal Energies had <br />provided other buyout scenarios for review and staff included the 10 -year option as <br />an example. <br />Mr. Solem stated if approved, the City would sign a Power Purchase Agreement <br />(PPA) with iDeal Energies for the solar arrays. There would be no cash required <br />up front and all operations and maintenance would be fulfilled under the PPA by <br />the financer/developer. After the City exercises the buyout option, it would receive <br />all the energy produced and assume operation and maintenance. <br />Mr. Solem noted the ground mount system is shown as an Xcel Energy Solar <br />Rewards, which provides incentives to customers who install grid connected arrays. <br />Xcel would purchase the power at a predetermined value and include a future <br />escalator. He explained the City has the option to purchase the system at year 13 <br />and the Solar Rewards option could be applied to any rooftop option, with a <br />maximum array size of 40kW. <br />Chair Cihacek asked what the assumed inflation rate is for the utility. Mr. Solem <br />stated over the last ten years it has been about 4.5 percent, over twenty years it has <br />been 3.3 percent. He stated this one is at 4.5 percent because when they do a solar <br />rewards project it is a 13 -year agreement and when they do the larger projects that <br />is an 18 -year agreement, so they use the 3.3 percent inflation rate to represent a <br />longer term. <br />Chair Cihacek stated the one thing that stuck out to him was because the roofs are <br />older and may need future roof maintenance, would there be space to move the <br />arrays around to accommodate maintenance without losing solar power. It was <br />noted the rink roof array appears to be using the entire roof space which in turn <br />means there may be a slight reduction in terms of the financial benefit because at <br />some point, they will have to take some off line to do roof replacement or they <br />would need to downsize that array to allow or shift some of the arrays for <br />maintenance. Mr. Culver stated that is something he was going to follow up with <br />Ideal Energy on because they have had previous discussions with other developers <br />as far as trying to build in a two-month period where they could take the system off <br />line. It was noted Ideal Energy would work with the City on removing and <br />replacing the arrays. <br />Mr. Solem stated they do have optional agreement where if it is in a shorter amount <br />of time, they can agree upon that process up front so it is not a surprise. <br />Page 9 of 16 <br />