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Palo Alto approves major solar power purchase agreements

From the July 2, 2013 issue of Public Power Daily

Originally published July 2, 2013

Palo Alto’s City Council has authorized three solar electric power purchase agreements, which together will result in the acquisition of up to 182,500 megawatt-hours (MWh) of solar photovoltaic power per year, roughly 18 percent of the California city’s electric needs. The delivery of the power from the new solar facilities is scheduled to start by January 2017 and the contracts last for 30 years. The price paid (~$69/MWh) was lower than any previously approved renewable energy projects over the last eight years, the city said. Palo Alto will make no upfront payments under any of the three contracts – energy will be paid for only after it is delivered.

The three purchases will bring the city’s renewable portfolio to about 48 percent by 2017 and will allow the city to achieve its goal of 100 percent carbon-neutral electricity by 2017 solely through carbon-free long-term renewable contracts and hydroelectric resources, Palo Alto said. The city said it is already purchasing completely carbon-neutral electricity. Presently, about 70 percent of that carbon-neutral power is coming from renewable resources and the rest is wholesale market power that is "neutralized" by the purchase of renewable energy certificates to offset emissions. The economic impact of being 100 percent carbon neutral is estimated to be about 0.11 cents/kWh, or less than $3/year on the average resident’s electric bill, the city said.

The three contracts are with:

  • Elevation Solar C LLC for up to 80,000 MWh of energy per year over 30 years, at a cost not to exceed $154 million;
  • Western Antelope Blue Sky Ranch B LLC for up to 50,000 MWh of energy per year over 30 years, at a cost not to exceed $97 million; and
  • Frontier Solar LLC for up to 52,500 MWh of energy per year over 30 years, at a cost not to exceed $99 million.

The three projects were selected from 92 responses to a request for proposals issued by City of Palo Alto Utilities in 2012. The three winners had the best total scores (based on price, value, viability and compatibility with the city’s goals) as well as the lowest prices, the utility said. The annual cost of the three contracts is expected to be up to $12.6 million.

More information is posted on Palo Alto’s website.


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