Fresh Energy's 2013 Power Breakfast | Jason Willett: Case Study
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Transcript of Fresh Energy's 2013 Power Breakfast | Jason Willett: Case Study
Metropolitan Council
Environmental Services (MCES)
Solar Project at Blue Lake
Wastewater Treatment Plant
Fresh Energy; 2013 Power Breakfast
September 24, 2013
Jason Willett, Director MCES Finance & Energy
• A regional governing body of 16
Metropolitan Council Members and
Chair Susan Haigh
• Operates Metro Transit, which carried
81 million bus & rail passengers in
2012
• Operates MCES, which collects &
treats wastewater at rates 40% lower
than peer regions
• Partners with communities & the
public in planning future growth
• Provides affordable housing
opportunities for low- and moderate-
income residents
Metropolitan Council
MCES Wastewater System Seven
Treatment
Plants
600 miles of
Regional
Interceptors
Estimated $5
Billion
Replacement
Value
Capacity to
treat 372
million gallons
per day of
Wastewater
Flow
107
Communities
Connected
MCES Metropolitan Plant
MCES Performance Awards• National Association of Clean Water Agencies
(NACWA) – compliance with clean water discharge
permits• All plants, most years
• MCES/Xcel Energy Awards• 2009, 2010, 2012 Efficiency Partner Award
• 2011 Gold Award
• NACWA Operations Award for Environmental
Achievement (Inflow/Infiltration program)
• Metropolitan Plant Solids Management Building
design
• 2012 Governor’s Continuous Improvement Award
for the Council’s energy saving initiative
• Reduces costs for wastewater rate payers
• Reduces exposure to rising energy costs
• Improves our position for emissions
regulations
• Offers external societal & environmental
benefits (e.g. jobs & pollution reduction)
MCES Interests in Energy Work
• Energy: Creates clean, renewable energy
• Energy: At site energy use eliminates utility line losses
• Capacity: Operates efficiently when utility grid has
most demand less need for other generation
• Capacity: Reduces need for utility reserves
• Environmental: No carbon or other air emissions
• Environmental: Uses little to no water
• Societal: Supports energy independence & security
• Societal: Creates jobs
• Societal: No use of limited fuel resources
Societal Benefits of Solar
• Lower life cycle cost (benefiting wastewater ratepayers)!
• Supports MCES Mission
• Provides beneficial use of buffer land around plant
• Provides price stability of some energy costs
• Reduced carbon emissions may save future costs
• Provides future opportunity to leverage facility
• Learning for MCES staff
• Visibility to encourage others
Benefits of Solar to the Council
Solar – Early Barriers
• High capital cost of solar panels
• Low electric rates meant avoided costs were low
• Federal tax incentives not available to government
agencies.
• Limited staff experience conservative assumptions.
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• Approaches tried:
– Traditional procurement/financing
– State bonding
– Public Facilities Authority’s “Green Reserve”
– Wind source proposal to Xcel
• Panel prices have dropped by 75%
• Electric rates and avoided costs have escalated
• New solar standby capacity credit was implemented
• New solar mandate, creating value for solar renewable
energy credits
• Council passed a new sustainability policy expanding the
definition of economic feasibility
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• Approach utilizes a competitively-selected 3rd party and PPA
helps procure Federal Solar Tax benefits and Renewable
Development Fund Grant
Solar – Now
Blue Lake Solar PV System
• 1.25 MW (ac)
• 5 to 10 acres
• Fixed panel system
• No Council capital;
and little risk
• Oak Leaf LLC
(private) takes
construction,
permitting,
connection,
technology, and
production risks
Minnesota River
Highway 101,
Shakopee, MN
New Anaerobic
Digesters
Future Solar Facility
• Production
• Avoided energy prices, including fuel
• Capacity Credits
• Value of Solar Tariff design
• Renewal Energy Credits (RECs)
Significant Uncertainties
Lessons Learned
• Engineering Assistance
– Electrical distribution & interconnect Specs
– Permitting
• Financial Assistance
– Firm vs. Interruptible Load
– On Peak vs. Off Peak load (impacts avoided costs)
– VOST, net metering, behind-the-meter
• Management Support
– Future Uses of Land
– Procurement decisions (Wages, MBE/WBE, local
content)
– Political Support
Financial Analysis Approach
Council’s Sustainable Policy
Elements:
• Energy and Emissions
• Water
• Fleet
• Solid and Hazardous Waste
Economic Feasibility
• Expected present value payback over life cycle!
Questions?