MN City Reconsiders and Rejects Solar as Too Risky
Solar power developers routinely make the rounds at City Hall, targeting municipalities with the latest green gimmickery. The most popular go-to option these days allows cities to cash in on the state’s solar energy mandate through so-called community solar gardens (CSG), underwritten at the expense of ratepayers and taxpayers.
But there’s a reason green energy companies target local governments like Centerville in Anoka County, as The Citizen weekly newspaper pointed out.
CSG’s ask municipalities in particular to be members because they are more stable than businesses and are more likely to fulfill the 25-year commitment that the subscription requires. The thinking is that it is unlikely that a city would go out of business; however, businesses fold quite often.
The sales pitch can be tempting. Instead of having to install their own solar panels, a city buys what amounts to a virtual “subscription” to a solar garden, receiving a credit on their electric bill for power generated. At first, Centerville appeared to be all-in.
Geronimo Energy Solar Garden representatives Joe Peltier and Lee Bjerk presented a way for the city to earn a one-cent credit for each kilowatt hour billed by Xcel Energy. The Edina-based energy company estimated the annual energy usage in the city’s buildings to be 218,723 kilowatt hours, which would bring in a credit of around $2,187 in the first year. Over the 25-year subscription period in the CSG, the city would save a total of $51,522.17 in energy costs, Bjerke said.
But after doing their homework, city leaders had second thoughts at a follow-up meeting a couple weeks later.
Councilman Matt Montain noted that the city would be signing on to a brand new company in Geronimo Energy. “They haven’t even started anything,” he said. The city might be wise to take the option to hedge and consider waiting for something better to come along, he said.
“I feel like we’re the guinea pig,” Councilman Russ Koski said. “Is this something we need to do? It’s extracurricular. A 25-year commitment is not worth the risk — too much is unknown.”
“I was one guy on the side of going with the Geronimo plan originally,” said Councilman D. Love. “To me, it’s an obvious choice from a savings standpoint. Now I hear we can triple our income under a different method. That sounds like a massive savings over what we’d get from Geronimo.”
Council members also expressed concerns over the impact of new technology on their investment over the long haul, as well as higher electric bills for ratepayers.
Councilman Steve King said that he had researched the benefits of joining a solar garden community and spoke with representatives from Xcel Energy and Connexus Energy to learn that the rates needed to be high enough to pay the solar investors and maintain the solar company. He told council that inflation would eat up any financial benefit over a 20-year period. He said he also wondered where the money came from to pay the investors and discovered that taxpayers would be paying for the project through higher utility rates.
“Some places, like Australia, are already putting batteries into their houses,” King said. “Battery technology will far outpace anything in 10 years and put this (solar garden plan) to shame — and here we’d already be locked into this.”
In the end, it was unanimous. The Centerville City Council voted to look to a future beyond the confines of community solar gardens.