City Council Minutes 2010 09 07 - Laserfiche WebLink

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City Council Meeting Minutes September 7, 2010 Page 6 of 12 made based on a confidential memorandum and suggested Council wait until the City Manager and the Public Works Department make a recommendation. Mayor Sisk requested a Staff presentation. Public Works Director Phare explained one of the Staff's goals for 2010 was to evaluate energy conservation measures and efficiencies in City facilities. This goal included evaluating the feasibility and comparing cost and benefit of installing solar photovoltaic (PV) panels at City facilities such as the Library, City Hall and possibly the Recreation Center. He noted there may be structural challenges to the buildings. Staff then looked at the City's utility plants, which have adequate land for reasonably sized photovoltaic installations. Staff requested proposals from qualified applicants. The four proposals were submitted by teams comprised of installers and financers. The four proposals were from fully qualified installation and owner operated finance teams and all proposers met the initial requirements for experience and qualifications. PPA's receive three subsidies in order to bring the cost of power closer to the utility grid cost. Without these three incentives solar power installations could not compete with expected utility grid prices for power. Solar power facilities receive incentives from Xcel and federal tax credits. In the case of PPA's these incentives are typically assigned to the operator /owner. Xcel Energy is requiring a 20 year term for the PPA, but there may be options if the City is willing to pledge to generate power with solar facilities. Staff analyzed whether the City should continue to purchase power from Xcel, a traditional governmental equipment lease or an outright purchase of solar PV equipment. Depending on the initial cost of power of the PPA and the provisions for annual cost escalation it is possible to purchase power near the expected cost of a traditional utility grid. Staff requested Council discussion and direction on what premium limit should be considered in any PPA purchase agreement for facilities and whether there is any interest in a different payment schedule and possible ownership at an earlier date. Staff's recommendation was for Council authorization to enter into final negotiations for a PPA, or for an altemative lease approach, for one or all three of the City's utility plants, provided the projected power cost does not exceed the anticipated cost of power purchased on the utility grid by more than 5 PUBLIC COMMENT R.J. Harrington, 457 E. Raintree Court, Louisville, CO referred to the financial analysis, which noted Xcel Energy's 10% inflation rate per year. He explained Xcel uses coal from the Wyoming Coal beds to fuel their plant, but within the next decade the coal will be harder to extract and the cost of fossil fuel to rise. He noted the $2,000 cap for