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Mr. Culver stated the two major risks, particularly owning the panels from day one <br />is if there was some catastrophic weather event, the panels could get damaged <br />where insurance would have to come into play versus an O and M situation. The <br />City is insured through the League of Minnesota Cities but if they get a weather <br />event that is significant that would damage the panels then there is other damage <br />and the deductible would get eaten up quickly. The second risk is there is no set <br />clause stating the City's PPA will always be lower than Xcel's energy rate. There <br />is a possibility that there is a marginal higher rate than what the City would be <br />paying Xcel for that same energy in a given year. Given reasonable trends and <br />there is a set escalator on the PPA, that should be a limited concern. After the 13"' <br />year the City would not be paying the PPA anymore. <br />Member Kruse asked if Xcel Energy could penalize people for not using the electric <br />grid. <br />Mr. Culver indicated they could not. It would be unlikely that the City would not <br />be purchasing electricity from Xcel Energy. <br />Mr. Rich Ragatz stated with the solar rewards program, it is set up where the value <br />of the energy the City is keeping 20% of that as a savings each year. This would <br />be a buffer in case rates do not increase as much as was projected or the output of <br />the system did not produce as much energy as was indicated. The City would still <br />be saving money. <br />Mr. Chris Psihos stated the program was set up so the City would be saving money <br />whether there was a large increase in rates or less of an increase. He noted iDeal <br />Energies program is set up differently than most other solar companies. <br />Mr. Culver agreed with Mr. Chris Psihos and Mr. Rich Ragatz that their goals <br />should be to own the system and to realize the maximum benefit of the solar power <br />production on that because then the City is not paying for the power at all with the <br />exception of operating and maintenance costs. He noted the panels could be left on <br />the City roofs for 40 plus years and still produce energy off of the panels. <br />Mr. Culver noted some of the Councilmembers have expressed concern about <br />owning the solar panels at all and as soon as the PPA agreement is up to get the <br />panels off the roofs, so the City does not own them anymore and there is not the <br />risk. <br />Member Misra asked if there really is a risk. <br />Mr. Culver stated the City Council is concerned about having another asset to own, <br />maintain and operate and the cost of it. <br />Member Misra asked how well the solar panels fair in Minnesota weather. <br />Page 6 of 11 <br />