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New Business   Item #:
City Council Regular Meeting
Proposed Whitmell Solar Project
Business Meeting: 09/18/2018
Danville Utilities has energy replacement needs starting in 2021 due to an expiring power supply contract. After extensive evaluation, staff recommends pursuing two solar peaking generation projects that would be beneficial to the ratepayers of Danville Utilities. These two projects will help reduce the City's rising transmission, capacity, and congestion charges. Staff proposes to enter into two 25-year purchase power agreements with two different solar developers, to build a total of twenty-two megawatts of solar generation within our service territory. The Whitmell solar project, located on Irish Road, would include a ten-megawatt solar array. The City would not be responsible for any of the upfront capital costs or the maintenance of the facility.
Staff evaluated approximately a dozen possible solutions for the 2021 power supply replacement needs. Several solar and natural gas responses were considered compared to current and forecasted market prices. Solar generation was the lowest cost solution, mainly due to the federal investment tax credits private developers can leverage. In order to take advantage of a 30% federal investment tax credit, a prospective solar developer would need to have a project under construction by December 31, 2019. The estimated generation for the two solar farms is approximately 50,000-megawatt hours per year. This equals to be approximately 5% of Danville's system load.
Staff recommends Danville City Council approve entering into a purchase power agreement for ten megawatts of renewable solar power to be constructed within the Danville Utilities service territory as recommended by the Danville Utility Commission.
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