Summary The Florida Municipal Power Agency (FMPA), of which the City of Alachua is a member, has planned to participate in a large scale solar project. The project will be developed by NextEra Florida Renewables and includes three, 74.5 MW utility-scale solar facilities located in Osceola and Orange counties. FMPA has offered participation in the project to its members.
The City of Alachua engaged the services of WHH Enterprises, Inc. to analyze the project's potential for the City. Following the analysis, it has been recommended the City participate in the 7-11 MW range. City staff recommends participating at 9 MW. The project is planned to go online in mid 2020.
Other planned participating municipalities include Bartow, Homestead, Lake Worth, Wauchula, Winter Park and the Orlando Utilities Commission.
All members wishing to participate in the project are required to enter into a Power Sales Contract (PSC) with FMPA. The term of the agreement is for 20 years with two additional five-year renewal options available. City staff, the City Attorney and WHH Enterprises have worked with FMPA to finalize a PSC that is acceptable to the City.
The City of Alachua currently purchases its power wholesale from Gainesville Regional Utilities (GRU). The City's contract with GRU does not permit the City to purchase energy on a transmission level from any other source than GRU for the duration of the agreement, which term's ends March 31, 2022. Therefore, the City would not be able to receive its solar energy from the time the solar facility begins producing energy in mid 2020 until March 31, 2022. The City has negotiated a separate agreement between FMPA and the City for the purpose of the City selling its solar energy entitlement to FMPA for the overlapping time period. At the expiration of the GRU contract, the City will be able to receive its solar energy entitlement without selling it to FMPA.
The financial impact analysis performed by WHH Enterprises demonstrates the project is projected to have a present value savings of approximately $2 - $7 million for the City over a 30 year term with the City participating at the 9 MW share. The range is dependent upon the projected escalation of natural gas costs, since much of the current energy market is dependent upon natural gas. If natural gas costs do not rise at all over the next 30 years, the City can expect approximately $2 million in savings. If natural gas costs escalate 4% over the next 30 years, the City can expect approximately $7 million in savings.
This project allows the City to invest in clean, renewable energy, decreasing environmental impacts, while at the same time providing a savings to the City's electric utility customers. Furthermore, the City's energy portfolio is further diversified with solar energy as a new component, providing additional shielding to rate payers in the event natural gas or other traditional energy markets spike. |