Title
Discussion of a battery storage system proposal for the City's municipal electric system.
Brief Description: Council President Foster would like to discuss with City Council and the Mayor the consideration of a battery storage system proposal for the City's municipal electric system.
Body
Legislative History
None
Purpose & Explanation
A private company (Distributed Electric LLC) has approached the City with an interest in installing, owning, and operating a battery storage system for interconnection with the Hudson municipal electric system.
This type of system is a utility scale battery storage system that is built to reduce the City's peak load, thereby reducing the cost of electric transmission and capacity charges to HPP customers. Typically, the solar / storage company would build, own, and operate the system and often would purchase or lease the land they need for the battery storage.
There are several different options that can be executed when developing and constructing a battery storage system at the utility level:
1. Option #1: The City owns and provides the land for the project. The developer installs, owns, and operates the system, and the City allows the developer to use the land exclusively for the project, or implements a land lease agreement. The City signs a power purchase agreement (PPA) for a defined term with the company.
2. Option #2: The City owns the land, installs, owns, and operates the system. Upfront investment and proforma projections with ROI would need to be considered.
3. Option #3: The developer owns the land and installs, owns, and operates the system and sells the energy back to the City through a PPA for a defined term.
The City could also purchase land and use it specifically for the system installation. The City would purchase power from the system owner through a power purchase agreement (PPA) at a pre-determined term. This has typically been the arrangement between municipalities and solar/energy storage com...
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