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District moves forward with solar power purchase plan after RFP shows 54% lower rate
Summary
After an RFP review, staff recommended Sunpeak as the top proposer for a power purchase agreement; the board gave consensus to return the vetted contract for approval.
District staff presented results of a solar energy request for proposals and recommended Sunpeak Power Holding Company as the top-ranked proposer to supply solar energy to most district sites under a power purchase agreement. Board members and vendor representatives said the top-rated proposal offers an all-in rate of about 4.07 cents per kilowatt-hour, compared with the district's current electric rate of roughly 8.9 cents per kilowatt-hour. Board members gave consensus to bring the recommended contracts back for final approval.
District staff said the RFP drew six high-quality proposals that were scored anonymously by the district's consultant. The scoring criteria included qualifications, experience, price and technical components; the top proposer was also the lowest bidder. Presenters described the power purchase agreement as a no-upfront-cost arrangement: the vendor constructs and operates arrays and sells the generated power to the district under a fixed rate for the contract term.
Nania Energy Group and district staff noted that the proposed 4.07'cent rate is fixed for the 20-year contract and includes operations and maintenance for the arrays. Presenters estimated that, compared with earlier conservative estimates of about 6 cents per kilowatt-hour and a projected savings of roughly $8 million over the contract term, the new lower rate could raise projected savings to about $12 million over the contract period. Staff said Sunpeak is based in Madison, Wisconsin, and that references for the vendor and other proposers returned positive checks.
Board members asked how maintenance and vendor solvency would be handled if the company failed; presenters said assignment or sale of the contract would likely occur in that event and that the vendor is financially incentivized to keep arrays producing since revenue accrues only when generation occurs. After questions and a review of redlined contract language vetted by staff and legal counsel, the board indicated consensus to bring the vetted contract package back to a future meeting for formal approval.
No final contract was executed at the meeting; the board authorized staff to return the recommended, legally reviewed agreements to the board for a formal vote.
