City could wait on solar power offer

Original article.

TRAVERSE CITY — City commissioners may hold off on buying electricity from a solar array after a second clean energy provider showed interest in helping Traverse City meet its renewable energy goal.

Heritage Sustainable Energy plans to build a 1-megawatt solar array on M-72 near a wind turbine the company owns. Commissioners on Monday could decide whether to buy the output from that array through Traverse City Light & Power at 10.25 cents per kilowatt-hour for 20 years. Doing so would advance the city toward its goal of powering all municipal operations with renewable energy by 2020.

But city Manager Marty Colburn said he’ll ask commissioners Monday to wait.

“I recommended that we defer a decision regarding the M-72 project until we have an opportunity to identify what possibilities are out there with this other company,” he said.

Spartan Renewable Energy is willing to sell the city clean energy to power its operations, said Traverse City Light & Power Executive Director Tim Arends.

Power from Heritage Sustainable Energy’s solar array would cost the city utility about 2.5 cents more than what it typically pays per kilowatt-hour. The utility would charge the city a special rate to make up the difference.

Colburn in a memo to city commissioners said the company would sell the city power without a surcharge.

Spartan Renewable Energy contacted the utility in early July, Arends said. That’s several months after the utility and Heritage Sustainable Energy began negotiating a power purchase agreement for the company’s planned solar array.

TCL&P board members on July 11 voted to approve a purchase agreement with Heritage Sustainable Energy, then forward it to city commissioners for their final say, Arends said. They gave city commissioners a September deadline, and Arends said he should know by then if Spartan Renewable Energy has an offer worth considering.

But another delay by the city could kill Heritage Sustainable Energy’s solar project, company CEO Marty Lagina said. He already bought the land, made a down payment on solar panels and spent $40,000 on a study to determine how to link the array to TCL&P’s system.

Lagina said he understands he assumed these costs at the company’s own risk. But time is running out.

“I would have to look for alternatives if it gets turned down, and those alternatives include scrubbing the project or looking for other markets,” he said.

It’s time to act on Heritage Sustainable Energy’s offer, city commissioner and TCL&P board member Tim Werner said. He favors moving ahead with the project, regardless of what negotiations with Spartan Renewable Energy might produce.

“Whatever this opportunity from some other company for renewables for the city, that’s great, or that could be great, we don’t really know what it is yet,” he said. “So to slow down or set aside something that we have in the works for something that’s possible, I’m not in favor of that.”

Electricity from the M-72 solar array would provide part of what the city needs to meet its clean energy goal, Werner said. That means the city could approve Heritage Sustainable Energy’s offer, then consider the second company’s offer for the rest of its needs.

City commissioner Brian Haas said he isn’t opposed to waiting. Locking into a 20-year contract on electricity and advancing the city’s clean energy goal are both appealing to him. But there’s no Monday deadline to do either one.

“If staff needs time to evaluate that other offer, I’m certainly in favor of giving them that time,” he said.

There’s no need to rush into a deal, commissioner Gary Howe agreed. He wants to make sure the city is exercising its due diligence before committing taxpayer dollars.

But Howe also said there are times where commissioners need to act. He’s waiting to hear the full details, and is willing to consider offers from both companies.

“I’m totally open if there’s perhaps a path to do both of them,” he said. “At this point, all options are on the table.”