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City approves 15-year solar purchase deal with Frankfort Plant Board
Summary
The Board approved an agreement with the Frankfort Plant Board under which the City will purchase all output from new solar facilities under a 15-year ‘take-or-pay’ blended-rate contract; Phase III estimated capital cost: $3,527,025 and O&M $714,937.50.
The Frankfort Board of Commissioners unanimously approved a 15-year agreement with the Frankfort Plant Board (FPB) to design, build, own and operate new solar generation facilities and sell all generated output to the City under a blended-rate, take-or-pay structure. The motion to approve was moved by Commissioner Leesa Unger and seconded by Commissioner Rob Richardson and passed 5-0.
Staff described the financial structure as a blended solar rate comprised of a fixed Facility Output Cost Component (capital and O&M, net of tax credits) and an escalating Distribution System Cost Component. Staff disclosed an estimated Phase III capital cost of $3,527,025.00 and estimated operation and maintenance costs of $714,937.50 that will be incorporated into the blended rate formula. The City bears the risk if federal Investment Tax Credit eligibility is denied, limited, or recaptured except in cases of the Board’s gross negligence or intentional misconduct.
The agreement assigns construction and long-term maintenance responsibilities to FPB, and includes termination language allowing either party to end a facility agreement if final construction contracts exceed original proposal prices by more than 5 percent. Staff also noted FPB would be responsible for decommissioning and site restoration at the end of facility life, with specific costs to be negotiated in future documents. The Board approved the agreement during the work session and directed staff to finalize related documents for execution by the Mayor.
