City Council Minutes 2010 12 21 - Laserfiche WebLink

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City Council Meeting Minutes December 21, 2010 Page 5 of 11 $24,000 per year from Xcel for reducing loads on the electrical grid. Additionally, federal tax incentives may be converted to a one time grant and are available to the private sector. In order to capture the additional tax incentives, as well as the allowable equipment depreciation tax deduction, the equipment must be owned by a private sector entity. In order to qualify for the most favorable tax incentives it is necessary to incur before the end of 2010 expenses for specific equipment or activities in excess of 5% of the project. This is known as the "safe harbor requirement." Public Works Director Phare reviewed several graphs, which outlined the savings over the fife of the. system. When all the rebates and credits are factored in, and assuming the cost of electricity increases at an average rate of 4% per year, the 20 -year life -cycle cost of the project would be roughly the same as continuing to purchase electricity from Xcel. If the solar PV system lasts longer than 20 years, it could eventually offset the City's cost of purchasing electrical power by as much as $24,000 per year over the remaining life of the system. If the cost of electricity increases by an average of more than 4% over the next 20 years, the project would break even faster, but, if the cost of electricity increases by less than an average of 4% over the next 20 years, the project would save relatively little when compared with buying electricity directly from Xcel. PUBLIC COMMENT Michael Menaker, 1827 Choke Cherry Drive, Louisville, CO did not support staff's recommendations for the solar project for the three City's utility plants. He felt there are many uncertainties over a 20 -year period and urged Council to reject the resolutions. John Dallapiazza, Bella Energy, 400 S. Arthur Avenue, Suite 500, Louisville, CO presented graphs illustrating the cumulative savings for installing solar panels at the City's utility plants. He noted the present incentives are as good as they get. R.G. Harrington, 457 E. Raintree Court, Louisville, CO noted the uncertainty of fossil fuel used to fuel energy plants. He explained Peabody Coal will close their Colorado coal mines in the next five years and the coal fields in Wyoming will be exhausted in ten years. He reviewed clean air legislation, which will provide a regulatory process. COUNCIL COMMENTS Councilor Dalton voiced his opposition to the solar power proposal. He supported conserving energy, but felt the solar project was not a good use of taxpayer's money. Mayor Pro Tem Marsella voiced her support for the proposal and her belief the pay back would be less than twenty years. She questioned whether Bella Energy could guarantee installation by the deadline. John Dallapiazza stated the six month period is enough time to install and implement the project. He noted Bella Energy added a penalty clause to the agreement, should they not be able to deliver on time.