Glendale will shell out roughly $731 million over the next 25 years to receive renewable electricity from a solar plant that’s being built in Nevada, according to an agreement unanimously approved by the City Council this week.
The plant could start delivering power as early as the end of 2015, which will help bring the city into compliance with state requirements for renewable energy use, said Glendale Water & Power Manager Steve Zurn during a council meeting on Tuesday.
Fifty percent of the new power, to be provided by Skylar Resources, LP, is renewable and will account for about 146,000 megawatt hours, which is the amount of added renewable energy the city needs to meet the state’s threshold by the end of the decade, according to a city staff report.
If completion of the solar plant is pushed back, arrival of the new power could be delayed as late as the beginning of January 2017, the report states.
The new energy would be delivered 16 hours a day, seven days a week, but would only make up about 10% of the overall energy Glendale uses. Other sources include Hoover Dam and a coal-fired generating station in San Juan, N.M.
Another site, a coal plant in San Juan, is scheduled to close in 2017, meaning the purchased power from the new solar plant can fit into the utility’s budget without the need for additional spending, Zurn said.
“We do not require additional funds beyond that for this purchase. It will simply replace other types of power we would have needed to purchase on the open market to meet our needs,” Zurn said in an email. “This gives us a long-term, stable, renewable and cost-effective source to meet our daily power needs.”
For its first year, the new power source will cost $78.65 per megawatt hour, escalating by no more than 1.95% annually over the 25-year term.
Councilman Ara Najarian said he liked how purchasing the power would be on a pay-as-you-go basis, rather than prepurchasing.
“It’s a guaranteed price for the 25 years, which would create stability in our rate structure, at least for this part of it,” he said. “Personally, I think this is very good work. I think it’s good for the residents of Glendale and good for the environment. It’s a win-win for everyone concerned.”
Councilwoman Laura Friedman said she was also supportive of the new energy source, but asked what it would take to get power that was entirely renewable, not just 50%.
City Manager Scott Ochoa said pursuing a 100% option would be “extremely expensive” at this time and the state is only requiring half of that for now.
Friedman said she’s received letters from residents who inquire about whether the city would ever fully rely on renewable energy and that the cost issue is something that should be investigated.
“It’s important for us to, at some point, have that number,” she said.