The expansion of a solar project is sparking a controversy in Atwater.
The City Council on Monday will consider an agreement to lease about an acre of private land from a family to expand a solar facility. The project – which installs solar panels on a water well at 380 Commerce Ave., as well as City Hall and the community center, both on Bellevue Road – was first approved in July 2013.
Officials are now looking to expand the solar operation by an acre to add an extra megawatt to the power grid.
If the expansion is approved, the city would enter into a 20-year contract with James and Kathleen Casey to lease the land on either side of one of the city’s water wells for $10,000 a year. Solar panels would then be installed on the surrounding Casey property to expand the operation.
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Conergy Solar was the company selected for the development, installation and maintenance of the solar project, after winning the bidding process in a 2011 request for proposal. The city will pay 19 cents per kilowatt, according to Conergy’s solar rate.
Supporters of the solar expansion say the city will claim $40,000 a year in energy savings while adding 30 percent more energy into the power grid. It would also help the city meet its green energy initiatives.
Opponents are worried the 20-year lease will trap the city into a power purchase agreement that forces them to continue paying for power, even if the water well used for the solar panels goes offline.
If the well can no longer be used, Atwater would still be responsible for purchasing power generated from the facility or paying for termination fees if the solar facility is removed from the property. The city could drill a new well at the same location or a new area of town to move the solar facility.
The city’s eight water wells are powered by Pacific Gas and Electric Co., but some said switching to the Merced Irrigation District would be less expensive than PG&E or Conergy Solar. MID provides electricity to 8,000 residential and business customers, including Castle Commerce Center, the Applegate shopping center and several high schools in Atwater.
But cost comparisons of MID’s rates weren’t included in the proposal, opponents said. Councilman Jeff Rivero said the project’s price comparisons were specific to solar rates – not electric – and switching to MID would cost more because the city would have to pay PG&E an exit fee.
MID officials provided the city a rate analysis at the request of City Manager Frank Pietro last month. The district offers 17 cents per kilowatt hour for the community center, 15 cents for City Hall and 12 cents for the water well, according to an e-mail obtained through a public records request. PG&E charges 29 cents for the community center, 18 cents for City Hall and 13 cents for the well.
Some criticized the city’s two-member solar committee – made up of Rivero and his brother, Councilman Joe Rivero – for holding meetings without posting a public agenda or meeting minutes.
“There’s a lot of questions here that should have been answered by meetings open to the public,” said Atwater resident Eric Lee.
The Rivero brothers were appointed to the committee by Mayor Joan Faul in 2013. City Attorney Tom Terpstra said the solar committee is ad hoc and doesn’t legally require public agendas and minutes.
“The solar subcommittee that the council voted on hasn’t met for almost two years,” Councilman Jeff Rivero said. “I don’t know what Mr. Lee is upset about. One would think that he would be happy the city is saving $19.9 million in 30 years.”
Conergy Energy has begun work on the solar project plans, including soliciting investors and detailing engineering plans. If the city backs out of the agreement, it would be responsible for paying for those costs, with the buyout estimated at roughly $3 million.
Pietro said construction on the original solar project approved in July 2013 hasn’t started because of financial difficulties.
“When this thing was approved back in July, our financial picture was dismal and our credit rating was down,” the city manager said. “They (Conergy) couldn’t find any investors until January or Febaruay of this year.”
The solar project under discussion on Monday isn’t the first for the city of Atwater.
The city entered into a 1-megawatt power purchase agreement for its water treatment plant in January 2012. That solar project sparked no debate.