Several businesspeople planning solar systems urged the Modesto Irrigation District board Tuesday not to cut the price it pays for the power.
They complained about an MID policy that calls for dropping the rate for large systems from 23 cents to 16 cents per kilowatt-hour as of Saturday.
This would complicate plans to install solar arrays on supermarkets, warehouses and other sites — projects that would reduce demand for conventional power and create jobs in the district, the proponents said.
"The reality is that this will benefit MID ratepayers," said Ryan Swehla, a commercial real estate consultant and participant in a new venture called Valley Solar.
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"This is a local investment in renewable energy."
The board agreed to consider the higher rate for applications received by Friday, but to also consider how the cost might affect district finances.
The staff will bring details on these issues to the board in six to eight weeks, General Manager Allen Short said.
At issue are MID's rules for carrying out a state law that requires incentives for solar and other renewable energy.
The 23-cent rate, more than twice the cost of conventional power from natural gas plants, was enacted last year to spur investment in solar energy. Under the law, it is supposed to decline each year as the technology becomes more common and less expensive.
Only one megawatt of solar was proposed in the first year and a half of the program, but the past week brought applications for nine more megawatts, said Bob Hondeville, energy services manager for the district.
A megawatt is enough electricity for 300 homes in summer or 1,000 in winter. MID customers need more than 600 megawatts on hot summer days, when air conditioners are in maximum use.
The incentives for the 10 megawatts would far exceed the $500,000 budgeted for the program this year, so the staff suggested capping it at three megawatts.
That drew a protest from the proponents, who said they met the application requirements and should get the current rate.
"At 16 cents it doesn't make sense to them," said Joe Muratore, also a commercial real estate consultant.
"At 23 cents, it's an investment that makes sense for them to do."
The projects also can get federal tax credits and eventually pay for themselves through reduced bills for conventional power.
This program is separate from the incentives for residential and other smaller systems.
Valley Solar is working on behalf of a group of Modesto area businesses, among them heavy users of electricity for refrigerators and freezers. Included are five Save Mart stores; two Cost Less Food stores; a Mar-Val Food store; the Frito-Lay plant, which already has a solar system for heating cooking oil for SunChips; Mercer Foods, which freeze-dries its products; Gianelli & Associates, a law firm; and Sierra Pacific Warehouse Group.
Chris Murphy, vice president of the warehouse company, said the savings on power bills would help the businesses stay competitive and boost employment.
Swehla said solar projects within the district are preferable to MID's plan to get 50 or 100 megawatts of wind power from Oregon.
Hondeville said the 23-cent rate does not make financial sense and the district would be better off investing in energy conservation measures at less than 2 cents per kilowatt-hour saved.
The board also heard a renewed request from Del Monte Foods to ease the way for a solar system at its Modesto fruit cannery. It has been slowed by an MID requirement that such systems be owned by the power user, rather than leased, as the company prefers.
Bee staff writer John Holland can be reached at email@example.com or 578-2385.