(11/15) City officials received a briefing from Richard Anderson, of CQI Associates, which was tasked by the Council to do a detailed review on the benefits and options for the town utilizing solar energy.
The City currently in the 3rd year of a five-year contract to purchase its electricity from Constellation Energy at 6.39 cents/KWh. However, it has to pay Baltimore Gas and Electric (BGE) 3.3 cents/KWh for delivery, for a total cost of 9.69 cents/KWh. The town utilizes 3,390,000/KWhr, for a total yearly cost of $328,491.
Rates have gone up since the City signed its contact to purchase electricity from Constellation Energy, Anderson said. Today, the cost of purchasing electricity is 10.469 cents/KWh, which would result in the town electricity bill increasing to $464,026/year in 2025 if nothing changes – a 50 to 60% increase in electricity cost.
Anderson told the Council that the cost of building solar installations is borne by the actual owners of the installations. The facility owner not only makes money selling the electricity produced, but also in taking the Federal Solar Tax credits.
How the City acquires the electricity produced by the installations pays a key role in how much savings the City can realize. The two options open to City are Net Metering or Aggregate Metering.
In the case of Net Metering, power produced does not enter the ‘grid,’ but is instead used on-site, thereby eliminating the cost of going through the BGE power lines. All the City would have to pay for is the actual cost of the electricity produced which is established in the ‘power purchase agreement’ with the solar facility owner.
A Net Metering system, Anderson said, makes sense for the City’s wastewater treatment plant. The plant uses 1,584,000 KWh and there is room for 705,866 KWh in solar panels, representing 44% of the plant’s electrical need, resulting in a savings of close to $700,000 over 20 years ($395,422 in the purchase cost of purchasing of electrify and $304,000 since the electricity does not have to be delivered by BGE.)
The second location identified by Anderson was Memorial Park. Canopy solar panels can be built over the parking area and a ground mounted system could be built on park land for a grand total of 1,730,000 KWh. But as there is only a few building that consume power there – 83,569 KWh, a Net Metering system would not work and the town would have to pay to send the excess electric over the BG&E grid.
The Park Department expressed concerned that a ground mount systems could inhibit future enhancements in the parks, which left only the solar parking canopies on the table, leaving the total solar production short of the City government’s current needs.
This is where the Aggregate Metering System comes. In an Aggregated system, electricity produced goes into the grid. The city pays for both the cost of the production of the electricity, as well as a fee for transporting it.
Aggregate Metering System can be built outside of the City limits. All the electricity is sold toe BG&E and then used as a credit to offset the remaining 2,68,134 KWh of City electrical use. Given the initial cost of solar power is now cheaper then the current prevailing rate, this option could result in an additional $1,306,000 savings to the town over 20 years, for a total savings of over $2 millions dollars of 20 years.
Another option would be if to do a RFP for an aggregated net meeting at an offsite location to produce all of town’s electrical needs. This would result in a savings of $1,880,300 over 20 years.
Anderson recommend the City build as much it can at the waste water system and then do a RFP for an offsite system for the remaining power needs.
Anderson remind the Council of the Maryland Climate Solutions Now act, which requires governments to reduce their green house gas emissions by 60% by 2031 from their 2o06 baseline. If not accomplished, Anderson said, the City could be fined $150,000/year.
If they City opted to do the waste water treatment plant solar option, it would address 50% of the town’s needed reduction in green house gases, if they town opted for the aggregated net meeting system, that would meet the town’s 2031 goals and make the town carbon neutral.
The City council will now evaluate if going solar is economically viable and funding options, and hopefully avoid the issues Emmitsburg has incurred that has cost it hundreds of thousands of dollars from its over embracement of solar power.
