San Diego Gas & Electric, or SDG&E, a provider of energy services through electric and natural gas meters, has entered into two, 25-year solar power purchase agreements for a total of 80MW and revised its agreement with NaturEner to buy power from the company’s Rim Rock wind farm project in Montana.
The first of the solar agreements is a 25-year contract with subsidiaries of Sol Orchard, LLC to purchase as much as 50 MW of locally produced solar energy. The agreement calls for 21 individual, ground-mounted photovoltaic plants that would be built mainly in rural communities in San Diego County over the next two years. Most will be 2-MW projects, but some will be as large as 4 MW.
“This project is a unique, innovative concept that takes the idea of ‘rooftop solar’ to a new dimension,” said Michael R. Niggli, SDG&E’s president and COO. “Sol Orchard has found a way to make solar power available to customers in even the remotest areas of our service territory, while helping us to achieve our goal of adding as many local renewable resources as possible to our energy mix.”
The second new solar power purchase agreement is with subsidiaries of Soitec Solar Development, LLC, a renewable energy company managed by Soitec (Euronext Paris). The agreement includes three contracts with the combined capacity of 30 MW of solar energy to be generated at three solar power plant sites in San Diego County.
The plants will use Soitec Concentrix technology and the concentrator photovoltaic (CPV) technology modules will be manufactured at a new Soitec factory to be built in the San Diego area. The projects will deploy a ground-mounted, dual-axis tracking CPV solar power system, which uses lenses to concentrate sunlight onto very small, extremely efficient solar cells that convert the light into electrical energy.
Subject to the project reaching commercial operations, SDG&E has agreed to refrain from procuring additional TRECs that are not either connected or deliverable to California through December 31, 2017 if those contracts would make up more than 25 percent of its renewable energy requirements.
The utility’s authorized rate of return that will finance the rate-based portion of the project is expected to be considerably lower than the cost of financing with a financial institution. The lower financing costs will be passed on to customers through a lower price for the wind power. Customer costs associated with financing the investment should be offset by the tax benefits and cash flows generated by the project, so, as a result, customers are expected to be rate neutral to this investment.
