Willmar, Minn., utility officials to discuss viability of solar project
WILLMAR -- Discussion will continue this week on whether or not a solar project is economically feasible for the Willmar Municipal Utilities.
A report from Christianson and Associates of Willmar, which was hired as an independent en-tity to analyze expenses and returns and calculate whether or not the project is economically viable, is expected to be available Thursday when a three-member planning committee and utility officials meet to continue the discussion.
Jon Folkedahl, director of electric production, told the Municipal Utilities Commission on Monday that the planning committee will decide whether to bring a preliminary decision to the full commission or send the idea back to the drawing board.
The concept is to have investors purchase, install and own a 600-kilowatt solar array and the utility to buy electricity produced by the array. Estimated cost is $2 million-plus, said Folkdahl. The array would cover about two acres and provide roughly 750,000 kilowatt-hours of power per year, or enough electricity for about 100 homes annually.
At the end of about six years, the utility would buy the array.
Commissioner Matt Schrupp asked if Willmar would have the option to buy or would be required to buy.
Folkedahl said both the purchase price and the option would have to be negotiated.
"I think that it would be preferable for the utility to exercise such an option but it will depend on the price at that time,'' he said.
Steve Salzer, a commissioner and a planning committee member, said he understands the investor would expect the utility to ultimately own it.
Folkedahl said the goal is to keep the net cost to the utility below the retail price of energy provided to the ratepayers. Folkedahl said he's been involved with this for some time and said it's really difficult to do a solar project and keep the rate reasonable and still provide a good rate of return to investors.
Commissioner Dave Baker asked about incentives, federal subsidies and grants.
Folkedahl said timing is a problem regarding a federal treasury cash grant program that expires at the end of 2011. He said the program is the only way this project can work and provide electricity at a reasonable rate for ratepayers.
Folkedahl said there has to be a commitment made by the end of the year in order to take advantage of the program.
"If that doesn't happen, then they'll have to go back to square one and start recalculating and come up with a different way to make it happen,'' he said. "I don't know if that will be possible or not.''
Commission President Doug Lindblad asked Folkedahl about the status of solar technology improvements.
Folkedahl said prices have been falling and people say they will continue to fall. But others say prices are not and that it will be very difficult to improve efficiencies and drop prices much further than they are now.
Folkedahl proposed other parties involved in designing the current concept also attend the planning committee meeting this week. They include the University of Minnesota's West Central Regional Development Partnership, which has contributed funding toward developing the concept, Christianson and Associates and a solar array vendor.
The planning committee last met Nov. 4 but the financial analysis was not completed at that time and the committee decided to wait for that report before proceeding further.
" ... It's kind of a teetering balance that we have to achieve and we're going to have to do a few last-minute adjustments, but I'd like to propose that all of the parties involved attend the next planning committee meeting,'' Folkedahl told the commission.