Powering Strong Communities
Distributed Energy Resources

Benefits of Solar Plus Storage Project in Aztec, N.M., Include Resiliency, Cost Savings

 

The following is a transcript of the April 15, 2024, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.

Paul Ciampoli
Welcome to the latest episode of Public Power Now. I'm Paul Ciampoli, News Director for APPA. Our guest on this episode is Denver DeWees, Electric Department Director for the city of Aztec, New Mexico, a public power community. Denver, thanks for joining us.

Denver DeWees
Thanks for having me.

Paul Ciampoli
Denver, to get our conversation started, could you tell our listeners about your career leading up to your current position as Electric Department Director?

Denver DeWees
I started an internship in high school and so this is basically what I've done for most of my adult life going on 30 years now -- went on to receive a degree from San Juan College in instrumentation and controls and electric technology. I've spent some time in the energy sector both in coal and oil and gas doing transmission distribution and generation work. And for the last 10 years, I've been in municipalities working in the electric utility, various jobs from project management. I started a substation maintenance and reliability group [and] was the director of safety and compliance. And the last three years, I've come over to the city of Aztec and ran their electric utility.

Paul Ciampoli
Denver, could you describe your role as electric department director and also offer a description of the electric utility for Aztec?

Denver DeWees
We're a municipal owned utility. We're an enterprise of the city of Aztec. And we have about 3,300 customers, which basically the utility encompasses the city and its residents. We have a one megawatt solar facility that's currently producing. And we have a 69 kV transmission connection with another municipal utility, Farmington electric utility. So we have one radial fed transmission line, and our current solar generation. And that's basically how we provide power to our residents. As the director, I'm the chief executive. So I run the day to day and all aspects of the electric utility.

Paul Ciampoli
So Denver I wanted to spend the next couple of questions talking about plans that were detailed by Aztec last year related to the pursuit of the development of a two megawatt solar PV plus four megawatt hour battery energy storage system. So just wanted to start this phase of questioning on this topic by asking you to talk about how the city's utility and customers will benefit from this project.

Denver DeWees
Well, there are several benefits to this project. First of all, this project will generate about enough power to run about 660 homes. And so the solar PV and battery storage system will provide economic benefits to the city of Aztec. We'll own these assets. So the energy produced by this solar farm will have a fixed cost. And it's lower than what we would pay from a wholesaler at some portions of time, so that fixed known cost with a lower rate -- plus it locks in that lower rate and the energy price for the life of the facility, which is going to be 25-30 years. So there's literally millions of dollars of cost savings for the city and the residents. And then the energy storage will help shave peak energy prices and provide resiliency. As I said, we have one single radial transmission feed into our utility. So if something was to happen to that, that battery storage would offer us the ability to add some resiliency, and some redundancy to the system. So we'd be able to have a little bit of backup power, if you will. And also that battery storage gives us the ability to shave peak capacity payments, potentially could be additional income, because it's a dispatchable resource. So that could be offered to a wholesale provider. So there's just a lot of wins, potentially, that could come out of this project.

Paul Ciampoli
And one question that came to mind is, do you have even a kind of a rough timeline on when the project will be completed? Or is it too early to say at this point?

Denver DeWees
Well, we're still seeking funding. So we're in the grant process on several grants. We're waiting on our ITC approval. So right now we're finalizing the pro forma and, again waiting on some grant funding potentially, that'll come through from the state and federal agencies. And we would hope to have it completed in the next couple of years. But that's dependent on funding at this point.

Paul Ciampoli
So one of the things that was interesting to me about this project is the fact that Aztec said that it was using opportunities created by the Bipartisan Infrastructure Law and Inflation Reduction Act. Aztec also selected the International Center for Appropriate and Sustainable Technology to help it design and implement the project and also help it access the Bipartisan Infrastructure Law and inflation Reduction Act funds, monetize the investment tax credit and access low cost financing. So could you offer additional details about how the International Center for Appropriate and Sustainable Technology has assisted Aztec?

Denver DeWees
That's been a great partnership. Actually, when we first started diving into this project, the city had been saving money for some time, and was in a pretty good place financially, where we wouldn't need any help. And then COVID came, and we saw drastic inflation and components were just astronomically going up -- 1,300%, in some cases. And so once we started evaluating it, we found that there was -- without [a] grant and help from the state and federal government, that there was no way that we would be able to pull this off. So we started exploring options and looking at trying to navigate the infrastructure tax credits and grants and those kind of things. And for a utility our size -- we're a small public power utility -- we didn't have internal resources to take care of that. I was navigating it [and] became very apparent to me that we were going to need to seek some help. So I started looking into the industry partners and trying to find ways to gain some help and we came across ICAST. Most developers for a project of our size -- the scale of this project on an industrial -- on a utility scale -- is fairly small. So it was hard to find support. And we came across ICAST, and they're a nonprofit organization that works with rural and small communities. And boy, they were very eager to help us. And they offered a one stop shop solution, really with with a Pay for Success model that essentially that they would help us from idea all the way through commissioning. And basically, they charge us nothing if we're not successful in implementing our project. But most importantly, they started helping us garner grant funds to file for the bonus ITC and devise ways to monetize our ITC since we're a non taxable entity. And as the developer, their costs are built into the project cost. And so basically, it's subsidized by the ITC and the grant funds that they find for us. So essentially, they pay for themselves and the work that they do, and they've helped us write and submit for grants both at the state and federal level, BIL and IRA, for not only our solar and battery system, but also for the grid upgrades that it takes to connect our new facility to our grid. And we've already been able to win some engineering and front end design type grants. So all in all, it's just been a great partnership working with ICAST. They've really come alongside and partnered with us.

Paul Ciampoli
it sounds like it's fair to say that if you're a smaller public power utility system, you would recommend at least considering partnering with an organization such as ICAST.

Denver DeWees
Absolutely. I've worked for larger utilities that had the bandwidth and people in place to develop these programs and to go about all the engineering and grant support. But for small utilities of our size it's virtually impossible, in my opinion, to do it without some outside help.

Paul Ciampoli
Thanks so much for taking the time to speak with us today. And we'd love to have you back as a guest at some point in the future where we could perhaps talk about developments related to the solar and storage project or other topics as well.

Denver DeWees
I would love to. Thank you.

Paul Ciampoli
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, Graphic and Digital Designer at APPA. I'm Paul Ciampoli and we'll be back next week with more from the world of public power.