Montrose to Solicit Renewable Energy System RFPs
by Kati O'Hare
Aug 16, 2012 | 1064 views | 0 0 comments | 2 2 recommendations | email to a friend | print

MONTROSE – With help from a federal grant and a renewable energy company, the City of Montrose hopes to meet some of its electrical needs through solar power.

To that end, officials are looking for a renewable energy company willing to install, own and maintain a 150-kilowatt photovoltaic system at its existing communication site on Sunset Mesa, from which the city would purchase power for use at that site and at its Elks Civic Building.

"Part of the cost reductions for the [third-party] provider is that it is our land; we have this grant funding; there are investment tax credits available that could equate to about 30 percent, and there are also renewable energy credits that they could use to further reduce their costs for the project," said Virgil Turner, the city's administrative services director.

The city was recently awarded a $105,000 grant from the state that can offset capital costs for building the solar system.

The 150 kw system would be ground-mounted in a 15,000-square-foot fenced area at the communication site, and would produce 337,800 kilowatt-hours of electricity annually.

The city wants to create a power-purchase agreement with the firm chosen through a city request for proposal process. That RFP is expected to be distributed by Sept. 10, Turner said.

The details of the power-purchase agreement, including the cost of power, length of the contract and cost of the salvage equipment to the city when that contract expires, will be included in the city’s RFP, he said.

"I think the city has a lot to gain by having locally generated power right here in the community," Turner said.

Currently, the city's communication site on Sunset Mesa consumes 30,976 kwh annually, and its Elks Civic Building in downtown Montrose uses about 1.5 million kwh. The city hopes to purchase enough renewable energy through the power-purchase agreement to cover the electrical costs of the communication site, plus 20 percent of the Elks buiding’s electrical expenses.

Having access to renewable energy also would give the city some cost assurance, Turner said.

"We'd know what the [energy] rates will be with the terms of the contract," he said. "It's knowing what we'll be paying for the next [approximate] 10 years, versus not knowing what we'll spend in 10 years. The certainty of knowing what we'll be paying could be considered an advantage, and could sway us into paying a little more for renewable energy now."

In reviewing the RFPs, the city will be considering each company’s contract terms. Turner said it doesn't necessarily mean the city will get cheaper power, but the benefits of that percentage of city-used power from renewable energy outweighs many of the drawbacks. What is detailed in the RFPs will determine if the city moves forward with the project, he said.

Within the contact, the city will be looking at salvage costs, as well as energy costs and contract terms; it is hoped that, when the power-purchase contract expires, the city could purchase the solar equipment and continue to reap its benefits. The company also could choose to remove the equipment and return the site back to its original condition.

"We'll be asking them to give us their most attractive offer," Turner said.

The total project could cost a renewable energy firm up to $1 million, but the benefits to that company include the guaranteed power purchase from the city, he said.

After the RFP is released, companies have just over a month to submit their offers for review by a city committee, that will then bring its recommendations to city councilors for approval. Turner expects a selection announcement at the Nov. 20 city council work session, and hopes construction can start by mid-December, for a mid-March completion.

The project for this second solar array to be constructed for the city could help the city reach its goal of producing 5 percent of its needed power from renewable resources by 2016.

BrightLeaf Technologies, a Montrose-based renewable energy company, is working to install a 23 kw system at the city's wastewater treatment plant, as part of an Energy and Minerals Impact Fund grant provided by the Colorado Department of Local Affairs. That system is expected to provide the city with at least $7,800 in savings per year, and the city should recover the cost of the project within seven years, said Municipal Services Director Jim Hougnon.; twitter @katiohare

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