Explanation
Background: This ordinance authorizes the Finance and Management Director to enter into a solar power purchase agreement (SPPA) with Tipping Point Energy for the Fleet Maintenance Facility, 4211 Groves Road. A SPPA is an agreement whereby Tipping Point Energy will own, operate and maintain a photovoltaic (PV) system on the roof of 4211 Groves Road. The City, in return, will agree to provide Tipping Point Energy a license agreement on the roof and to purchase the electricity produced by the system. This agreement will allow the City to have the benefit of clean energy without the upfront costs of purchasing and installing the system, or the long-term costs of maintaining the system. Tipping Point Energy, as a private entity, is also able to take advantage of substantial tax breaks currently being offered in 2010 by the United States government and the State of Ohio, and Renewable Energy Credits that can be sold on the market.
Tipping Point Energy will install a 531.3 kW system. (The final size of the system could potentially be slightly more or less dependent upon further investigation and negotiation with the City). This would be the largest non-utility owned roof-top solar array in six states. It is estimated that it will provide up to one-third of the Fleet Maintenance facility's electricity needs. Based on negotiations, the City will agree to a twenty-year term with a starting price of six cents per kilowatt hour, to be escalated by 3% annually. Based upon current building electricity usage, it is estimated that the City will be purchasing between $30,000 to $60,000 of electricity per year from Tipping Point Energy. In no case will the City negotiate a price that increases total electricity costs. The City will ensure that the contract does not pay more to Tipping Point Energy for the power produced than it would have paid if the same power had been purchased from the regulated utility.
This power purchase agreement demonstra...
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