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Board approves nonbinding LOI with developer to pursue Franklin Elementary solar PPA
Summary
The board approved a nonbinding letter of intent with BAI Group LLC to pursue a solar power purchase agreement for Franklin Elementary; facilities staff said the LOI gives the developer 180 days to resolve site issues and estimated possible lifetime savings near $1 million, while warning many infrastructure costs remain unresolved.
The North Allegheny School Board approved a nonbinding letter of intent (LOI) with BAI Group LLC on June 12 that opens a 180-day exclusive window to negotiate a power purchase agreement to install solar panels at Franklin Elementary.
Facilities staff member Mr. Kirk described the LOI as a nonbinding step to allow the developer to resolve site unknowns and to negotiate a final power purchase agreement. Kirk said the district's objective is to have "no money out of pocket" and to be "net positive day 1," but he cautioned that several site and infrastructure issues remain to be negotiated, including transfer switches, switchgear and other electrical connections. "Based on a 1 and a half percent annual escalator in price, we estimate that we could potentially save nearly $1,000,000 over the term of the contract," he said, adding that the figure is an estimate and that the LOI is intended to tighten those terms.
Board members asked whether terms in the LOI would carry into a final contract; staff said the LOI is nonbinding and its terms may not appear in the final agreement. Discussion also raised the question of who would pay to upgrade electrical infrastructure — contractors and the LOI's commercial terms will determine that allocation.
The property and supplies package that included the LOI was moved and approved by the board. The LOI does not commit the district to capital expenditures; it authorizes pursuing due diligence and negotiation with BAI Group within the exclusive period.
What happens next: the district and BAI have an exclusive 180-day due-diligence window to resolve site issues and negotiate a final power purchase agreement; any final agreement would be returned to the board for approval.
