LAKEPORT ? The county Board of Supervisors signed an agreement with SunPower Corporation Tuesday for solar energy at the Lake County Jail, as well as its Northwest and Southeast treatment plants.
The 20-year contract includes an agreement to purchase power generated by SunPower”s solar panels at 11.5 cents per kilowatt hour for the first year of the contract, to increase annually by four percent.
The panels would cover a combined 15 acres between all three sites.
Deputy Administrative Officer Matt Perry outlined fluctuations in natural gas prices and PG&E”s rates over the past several years in a PowerPoint presentation to the board.
“The rates they (PG&E) charge customers rely on how much they have to pay for their power,” said Perry.
According to Perry”s calculations, if PG&E raises its rates by four percent in the next 20 years, the county will save an estimated $1.5 million in energy bills.
The San Francisco Chronicle published an article in its Sept. 1 edition putting PG&E”s projected rate hike at six percent, which Perry said would bring the savings to $5 million.
“If rates over the next couple of years increase by six percent, the savings in the first year will be $100,000. We”ve only projected a rate increase over the next couple of years of four percent, and we”re counting on a savings of $58,000 the first year,” said Perry.
Drawing from her prior experience working for and with PG&E, Supervisor Denise Rushing said while the utility company”s rates have historically risen between four and six percent, the overall savings might be more than expected, offering her own rough estimate between $5 million and $10 million.
Speaking for Steller, which also bid on the project, Keith Rutlidge warned that fluctuating rates might make for less savings than anticipated.
He said Steller had offered a guaranteed 12 percent savings no matter what.
“If you lock yourself into a four percent rate, along way may be losing money, and so that money (estimated savings) is going to have to go to recovering those losses,” Rudlidge said.
He went on to say that he didn”t feel Perry had represented that guarantee accurately, and that Steller wasn”t given an opportunity to revise its bid in the formal process that began in May. “We considered that the 12 percent would be fluctuating,” said Perry of an estimated 12 percent savings in the first year of the contract with SunPower if PG&E”s rates go up six percent. “If we were tied to PG&E”s rates we”d still be fluctuating. There”s a lot more potential to save with the agreement accepted today.”
When asked for comment on Rutlidge”s statement following the meeting, Perry said he had “a lot of questions” about the 12 percent savings Rutlidge alleged that Steller could guarantee.
One of the big draws in picking SunPower, said Perry, is that the company has a track record for meeting PG&E”s rebate deadlines.
The county aims to have the solar system up and running to in time to meet just such a deadline, coming up in September 2008.
Perry noted that after seven years of the contract”s life, the county will have an option to buy the energy system at either fair market value or the value of an investor”s expected return, whichever is greater.
The option would renew every three years.
Contact Tiffany Revelle at trevelle@record-bee.com.
