City Council Agenda and Packet 2015 10 06

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City Council Meeting Minutes September 15, 2015 Page 16 of 19 Lake Pump Station, which experience peaking factors that escalate average monthly bill costs. These credits could also be transferred to meters at the Golf Course and new Wastewater Treatment Plant sometime in the future if these locations prove to have higher peaking factors. Staff performed preliminary validation of the data and calculations presented by Clean Energy Collective. New Clean Energy Collective Solar Lease Purchase for Consideration: The proposed lease considers a slightly different lease purchase with Alpine Bank for solar panels again supplied by Clean Energy Collective. This new lease purchase of 198,555 watts of solar capacity would be at an interest rate of 5.25% for years 1 -5 and then 3.75% for years 4 -15. The total estimated lease payments are $964,499. The total estimated positive cash flow for this lease, based on $1,116,786 in bill credits and $349,276 in Renewable Energy Credits, is $1,466,062. Thus, over a 20 -year life cycle this lease purchase agreement would reduce the City's projected cost for electricity by an additional $501,563. Other Considerations: Clean Energy Collective (CEC) states this is the last opportunity to invest in Community Solar Gardens through Xcel programs that will provide positive net cash flow fairly quickly through Renewable Energy Credits and on -bill credits. Because CEC expects Xcel to change the credit structure, future Community Solar Gardens may not provide net positive cash flows. This proposal would provide for 9,578,546 Ibs of avoided CO2 emissions over the 20 year financial analysis. This equates to roughly 10,861,097 miles driven or 14,773 trees planted. Fiscal Impact: Over a 20 -year life, this lease purchase agreement would result in total lease payments of $964,499, fully offset by $1,116,786 in bill credits and $349,276 in Renewable Energy Credits, and thus reduce the City's projected net cost for electricity by a total of $501,563. The higher interest rate in the early years of the agreement, the current proposal, assuming all estimates and factors hold true, would increase the City's net cost of electricity for years 1 -5 by $11,374 to $5,420 dollars each year. The proposed lease payments equal $4.85 per watt for a total of 198,555 watts. It requires $67,502.70 refundable deposit, 15 year lease to own financing. Amy Thompson, Clean Energy Collective, explained there will be two dramatic changes in community solar especially with Xcel Energy. Future arrays will not have any renewal energy certificate payment (REC) and the investment tax credit (ITC) provided by the Federal Government will stop at the end of 2016 (the current ITC is a 30% discount). They were awarded 12 mega -watts with a negative REC kilowatt, which means there is an opportunity to have the golf course on board. The tax rate structure from Boulder I to Boulder II is different so there is not a collateralization of the actual panels for Alpine Bank on the second financing, there for the interest rate increased. She expressed her hope the City Council would take advantage of this opportunity for this array. COUNCIL COMMENTS 34