Solar Project Completed

South Feather Water and Power completed construction in May 2004 of a 566 kW solar photovoltaic system that will generate all the electrical power necessary to operate its Miners Ranch water treatment facility. The solar panels cover a 2.2-acre site adjacent to the treatment plant and convert sunlight into electricity that can be used to operate all of the pumps, equipment, and controls at the treatment plant.

At night and during days when clouds or fog obstruct the sun and no electricity is being generated by the solar panels, the treatment plant will continue to have its energy needs met by PG&E. On sunny days, and especially during the summer months when days are longer, the solar system will generate more electricity than is needed by the treatment plant. The excess electricity generated by the solar panels will flow back into the PG&E grid and be available for use by other PG&E customers in the community. The solar system is designed to generate enough electricity over a 12-month period to “zero out” the treatment plant’s PG&E bill.

Agency staff worked for several years to modify plant operations, including installing more efficient pumps, to reduce the treatment plant’s electricity demand. But even with their energy-saving improvements, the Agency paid PG&E $160,000 in 2003 for electricity at the treatment plant, representing an increase of 17% annually over a five-year period.

Looking for ways to stabilize water rates, and knowing that significant increases in future electricity costs is a fact of life, the Agency’s Board of Directors unanimously approved construction of the solar project in September 2003, and authorized financing half of the $4 million price tag by issuing Certificates of Participation (COP). The first $2 million of the project cost was funded through a California Public Utilities Commission rebate. The COPs, providing the remaining $2 million, are like a home equity loan. They bear interest rates between 4.75% and 5.375%, and are payable in annual installments over a 20-year period.

Through 2009, the Agency’s debt service on the COPs will be $140,000 annually. From 2010 through 2024, after the financing for a previous pipe replacement project is paid off, annual payments will be $264,000.

Not only did the solar project provide an immediate avoided-cost savings starting at $20,000 annually (the difference between the financing payment and what the PG&E bill would have been), debt service on the COPs is fixed over the 20-year payoff period. This means that the Agency can now budget with certainty for the treatment plant’s energy costs and not be subject to escalating PG&E rates. After 2024, electricity from the solar system will cost the Agency nothing.

The cost of energy is a large component of the Agency’s annual budget and directly impacts the ability of the Board of Directors to maintain a stable rate structure for water service. Construction of the solar project will help to keep water rates reasonable for many years to come.

SPG Solar designed and built the system, with Agency personnel and equipment doing a large part of the initial site preparation, grading, and trenching. The project took seven months to build, including winter-weather delays.