Title
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A SOLAR POWER PURCHASE AGREEMENT AND A PROPERTY EASEMENT AGREEMENT WITH HUDSON SHINES LLC.
Executive Summary: At the July 10, 2018 Council meeting the City’s power consultant Mr. John Courtney recommended that the City move forward with purchasing power from a solar photovoltaic system to be located on a portion of the City’s Hines Hill Property. The system would be interconnected to the City’s public electric grid (behind the meter). Mr. Courtney also reviewed the submitted KWh pricing and the property easement language for the project. Per the agreements, Hudson Shines LLC, the recommended developer, is to design, construct, own and operate a 2 MW photovoltaic system and provide 100% of the energy production to the City of Hudson at a fixed price for a 25-year term. Hudson Shines LLC will be the exclusive owner and operator of the system and is responsible for meeting all local, state and federal requirements with regards to the solar power system design, construction and operation. The project map has been attached for reference.
Body
Legislative History
§ Staff Report #17-0054 - Presentation of project feasibility (6-3-17)
§ Staff Report #17-0094 - Discussion of proposed project sites and ROI (10-17-17)
§ Res. No. 17-166 - Authorization to develop and issue a formal RFP for multiple sites (10-17-17)
§ July 10, 2018 Executive Session - discussion of final proposal financials
Purpose & Explanation
As a review, the purpose of a solar power generation system to be interconnected with Hudson’s electric grid is to (1) reduce the City’s peak load thereby reducing the amount of power purchased from the market and an overall reduction the City’s carbon footprint and (2) by reducing the City’s peak load, a savings is realized in capacity and transmission charges. The project and power purchase financials have been attached for reference.
The power purchase agreement (PPA) results and associated recommendation were discussed with City Council on July 10, 2018. Courtney & Associates received a total of five (5) project and power purchase offerings. Of the five (5) respondents the consultant selected two (2) final proposals to be considered for the project based on experience, like projects, performance and power price offerings. The selected and recommended developer for this project is Hudson Shines LLC.
Project Process Summary Moving Froward:
§ City accepts the project and PPA recommendation from the consultant. Developer completes pre construction due diligence of the project parcel (hazardous materials & wetlands assessments).
§ Developer agrees to construct and own the system and is responsible for all equipment, construction, permitting, approvals, system operations and maintenance for the duration of term.
§ Developer agrees to sell and the City agrees to purchase 100% of the projects generation for a 25 year term (Average of 3,500,000 KWh/yr. with a 2MW system)
§ City Grants permission to the selected developer to construct the solar array on City or leased property and grants an access easement.
§ HPP provides the system interconnection point to the City’s distribution system (estimated costs 65K).
§ At the end of the term the developer and/or the City can chose not to continue the PPA and the system will be removed or both parties may negotiate whether to continue the PPA under new terms and upgraded systems.
Timing Considerations
Staff will instruct the consultants to execute the PPA and easement agreements 30 days from formal Council approval.
Fiscal Impact
Currently Budgeted
X Supplemental Appropriation Required (HPP system interconnection design and construction will be forthcoming)
Appropriation Not Required.
Recommendation
Suggested Action
Staff recommends City Council Authorize the City Manager to enter in to a contract with Hudson Shines LLC for the purchase of power supplied from solar facilities to be constructed, owned and operated by Hudson Shines LLC and connected to Hudson’s municipal electric system as detailed in the attached agreements power purchase and easement agreements.
Submitted by,
Jane Howington, City Manager
Frank J. Comeriato, Jr. Asst. City Manager- Operations