By VERNON ROBISON
Moapa Valley Progress
Solar power generation was the main topic being discussed by the Overton Power District (OPD) Board of Trustees during a meeting held in Mesquite on Wednesday last week.
The Board heard a presentation from representatives of Nevada Renewable Systems, LLC (NRS), a company proposing to build a solar power plant on a parcel of land it owns atop Flat-top Mesa, just northwest of Mesquite.
NRS Chief Financial Officer, David Cohen, told the Board that the proposed plant would produce up to 40 megawatts of solar power using an array of flat-plate photovoltaic panels with smotor systems that allow the panels to track the sun across the sky. The current peak load demand at OPD is currently only around 95 megawatts.
The proposed site for the plant is located entirely in Lincoln County and is already zoned for solar and ready for construction, Cohen said. The site is less than two miles from OPD’s existing transmission line across the mesa where the power could tie into the OPD system.
Cohen explained that the solar power could be locked in at a price of no higher than $58 per megawatt hour. This would be 10 percent cheaper than OPD’s average non-hydro power purchases at the present time, Cohen claimed.
Several factors would contribute to the relatively low cost of this particular solar project, Cohen told the board. Firstly, the cost of developing and equipping a solar facility has dropped significantly in the past five years. Secondly, if the district acts quickly it could take advantage of a 30 percent federal tax credit.
This credit is available for solar installations of all sizes and is funded by federal tax dollars collected from all U.S. taxpayers. But since the credit is expected to be rolled back at the end of the year 2016, the project would have to be completed by that date to achieve those savings, Cohen said.
In addition, entering a contract with OPD would allow NRS to access low cost financing available to rural power providers. This would also bring significant cost savings to the project, Cohen said.
Local generation of the power would also mean that it could be received directly without paying the transmission costs for running on NV Energy lines, Cohen said.
Furthermore, the project would reduce the cost of transmission losses that occur along the grid when power is transported for use hundreds of miles from its generation point, Cohen said.
“When you buy from Arizona Power, you are running 100 or 200 miles and not only paying for losses but also for the lines themselves,” Cohen said.
Cohen said that NRS would bear all of the up-front costs to build, maintain and operate the entire solar generating facility. And it would remain a separate entity from OPD. However, the district would be given the option to buy the facility after five years.
“That option could save you even more at that point,” Cohen said.
OPD Board Member James Pugh pointed out that, with existing power sources, the rates vary with the seasons, dropping in the winter and going up during the summer. He asked if such an arrangement could be included in the agreement with NRS.
Cohen responded that such an arrangement would probably come naturally as less power would be produced by the solar plant in the winter due to the shorter daytime hours.
“We can’t guarantee you that, on a given day, there won’t be a little bit of haze or a cloud cover,” Cohen said. “But what we can tell you is that there will be an amount produced in a given period and we expect to have certain percentages based on history in the area. And it would be financed on that basis. No one expects that it would have the exact amount every year. But the variation in solar radiation around here is only 2 percent per year. That’s pretty dependable.”
Cohen added that the solar power would add diversification to the district’s portfolio. Currently 80 percent of the district’s power use is generated by natural gas plants. The rest is with hydro-power.
“With lake levels in decline, power from Hoover will be diminishing and so the natural gas piece will increase,” Cohen said. “Diversification would keep you from the issue of what happens when natural gas prices go up. We don’t have the control that natural gas plants do; we admit that. But we also don’t have any of the upside market forces. If natural gas prices go way up, like it has in the past, our price stays the same. It is frozen and stays there.”
Cohen said that NRS was seeking a power purchase agreement from OPD by the end of this year. With a construction time frame of 6-8 months on the project, this would give enough time to have it completed by the end of 2016 before the tax credit expires, he said.
Board members agreed to consider the proposal and authorized staff to bring back a full report on the subject with recommendations. Staff agreed to bring a report back to next month’s Board Meeting.
In a separate agenda item, the Board authorized OPD staff to gauge public interest, and obtain estimates, on the construction of a ‘solar garden’. This would be a much smaller scale solar project funded only by the OPD ratepayers who express interest in participating.
“There is, of course, a big difference between a solar garden and a solar plant project,” explained OPD General Manager Mendis Cooper. “But we still see a number of people who are interested in installing solar on their homes or other projects.”
The biggest impediment to such projects is the up front cost of installation, Cooper explained.
“Even after we instituted our net metering program and offered rebates for people generating their own power, we have only seen 13 people who have installed solar units on their homes.”
Cooper said that there may be some interest on the part of some ratepayers to participate in a small-scale solar garden project.
“We could size it to the number of individuals who want to be involved,” Cooper said. “And we can add extra for future customers who want to come on later. It would be paid for only by those who want to have solar. We are not going to ask the other customer to help pay for it.”
Rather than being placed on roofs of individual homeowners, the garden would be built in a central location and maintained by the OPD, Cooper said. He suggested that an area adjacent to the district’s Dinosaur substation in Mesquite would have sufficient room for a small solar generation site. And it would be easy to tie it into the OPD system at that location.
To further reduce cost to the participants, the district would seek federal USDA grant funding to assist with the project, Cooper said.
The Board unanimously approved a maximum of $3,500 to allow OPD staff to circulate a questionaire and to gauge public interest in the project; and to gather estimates on costs to build the solar garden.
