June 15, 2009

City council gives green light to solar plant

By MARJ DARIO, Needles Desert Star

Monday, June 15, 2009 12:55 PM PDT

NEEDLES - Redco, a renewable energy development company based in Utah, wanted to build a solar plant in Needles. All it needed was a guaranteed customer to buy the electricity it would produce. On June 9, the city of Needles took a step forward when the Needles Public Utility Authority agreed to be that customer.

The NPUA voted unanimously to enter into a power purchase agreement with Redco Solar I for the construction and operation of a 5 megawatt power plant which will utilize solar thermal energy technology. The plant is to be located on purchased or leased land in or near the city of Needles. The property has yet to be identified.

The agreement commits the city to purchasing solar energy from Redco at a set rate of $128 per megawatt hour over the next 20 years. That equates to 12.8 cents per kilowatt hour to the electricity customer, but could turn out to be less once Needles starts earning renewable energy credits.

Redco has teamed up with International Automated Systems, Inc. to build the plant, and has projected construction to be completed by April 2011, if not sooner. IAUS will be providing the latest in solar technology and Redco will own and operate the facility.

At the meeting, Ryan Davies, Redco president, hosted a visual presentation about his company and the future of solar energy. Charts and graphs displayed indicated the cost of solar energy would continue to rise over the next 20 years. Davies assured the council that his company's proposed cost per megawatt hour was starting out cheaper than most other providers in the western states.

The power purchase agreement requires the city to purchase all energy produced by the plant; however, the NPUA will be allowed to purchase any “excess energy” at the prevailing hydroelectric rate which is currently $13 per megawatt hour. As for underproduction, Redco agrees to pay the difference if the NPUA is forced to purchase additional power that is more expensive.

Several factors may have convinced the NPUA to approve the power purchase agreement. Besides locking in the solar energy rate, Needles should be able to sell excess power as well as unused credits which would, in effect, offset consumer costs. The city will also be charging a fee for the use of city-owned power lines.

“We believe it is a good agreement, a good project for the city,” stated Bill Way, city manager. “It will set us on the road to energy independence.”

The mayor officially signed the agreement on June 10.