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CPS Energy pact with solar firm aims to turn San Antonio into a major hub for solar development


From the January 13, 2012 issue of Public Power Daily

Originally published January 13, 2012

CPS Energy in San Antonio said Jan. 11 it is negotiating a major power purchase agreement with OCI Solar Power that is expected to lead to the development of solar power on a massive scale in that area of Texas. The municipal electric utility said it expects OCI Solar, a subsidiary of South Korean chemical company OCI, to build 400 megawatts of solar power in and around San Antonio over the next few years.

As part of the agreement between CPS Energy and OCI Solar, the solar company said it will move its headquarters from Atlanta to San Antonio. Another solar firm, Nexolon Co., a South Korean manufacturer of solar-panel components, also will establish its North American headquarters in San Antonio as part of the deal, CPS Energy said.

The offer from OCI Solar Power is expected to bring the city 800 or more professional and technical jobs with an annual payroll of nearly $40 million, and $1 billion in construction investment, San Antonio officials said.

"San Antonio has reached a sweet spot at the intersection of job creation and environmental stewardship," said the city's mayor, Julian Castro, at a Jan. 11 press conference. "A lot of folks out there wonder whether these two things are mutually exclusive. This is about doing both."

"This accelerates San Antonio's leadership in the New Energy Economy, and provides the kind of good-paying, brainpower jobs that are becoming the staple of our local job-creation efforts," Castro said.

The effort to attract a solar manufacturer to San Antonio was announced a year ago. South Texas in general, and San Antonio in particular, is promising territory for solar power, said Doyle Beneby, CEO of CPS Energy. "We have a lot of wide open space here -- flat land and sunshine," he said at the time (see Public Power Daily, Jan. 20, 2011).

OCI Solar beat 18 other companies in a competitive bidding process over the last year, reported the San Antonio Express-News.

"This proposal would diversify our energy sources in a manner that makes good business sense and meets our objectives," Beneby said at the Jan. 11 press conference. "Our goal is to always provide our ratepayers safe, reliable and affordable energy, and wherever possible, bring additional value to our community," he said.

"As San Antonio becomes a central hub for solar development in the U.S., there is also a beneficial opportunity for other Texas-based municipal utilities to achieve their renewable energy goals by becoming sites for parts of the project," Beneby said.

"In just a few short years, this initiative could help CPS Energy achieve our Vision 2020 goal of attaining 20% or 1,500 MW of renewable resources by the end of the decade," said CPS Energy Board Chair Derrick Howard.

In 2009, CPS Energy launched its first solar endeavor with the 14-MW Blue Wing solar farm owned by Duke Energy. An additional 30 MW are under contract with Sun Edison. The utility is also a leader in wind energy, with 1,059 MW under contract. It has a diversified energy portfolio that also includes nuclear power, gas and clean coal.

CPS Energy has 717,000 electric customers and 325,000 natural gas customers in and around the city of San Antonio. It ranks among the nation's lowest-cost energy providers.

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