IPL staff reported the city is exploring whether to request a contract buyout for community solar farms that the city currently purchases from a private owner.

Staff said the solar contracts were signed circa 2015 and include a seven-year option that allows the buyer to request a sale if both parties agree; the buyer would pay for an outside assessor to determine value. Staff said they have opened preliminary conversations with Gardner Capital (the owner identified in the packet as MC Power’s owner) and are also vetting alternative options that they will bring back to the board later.

Why it matters: staff noted the city is paying roughly $81 per megawatt-hour (about 8.1¢ per kilowatt-hour) under the current contracts, while staff said the utility could buy energy from the Southwest Power Pool (SPP) at something closer to 3.5¢ per kilowatt-hour annually. That price gap is a core driver of staff interest in exploring buyout or alternative arrangements.

Financial trade-offs and bonding considerations
Staff said they do not have unrestricted cash to purchase the farms and would likely need to bond. Board and staff discussed whether to use bonding capacity on a solar buyout versus other generation investments that would add capacity (for example, gas generation, wind, or storage). Staff said they are also exploring options that could lower the solar contract price for the remainder of its term without tying up city bonding capacity.

Production and performance
Staff referenced an industry report (Indy Energy) that included historical production figures for the solar farms around the 2018–2019 period and stated a recent multi‑year average “around 20,000,000” (figures quoted as presented at the meeting). Staff said the farms are producing, but the primary concern is the contract price the city pays for that energy.

Next steps
Staff asked for patience while they vet non‑disclosure-covered discussions and financial models and said they would return with options that could reduce the effective cost of the contracted solar energy or provide a buyout path that does not impair other capital programs.