The Crested Butte News Serving the Gunnison Valley since 1999
Working out final details of the cost premium
[ By Mark Reaman ]
The Crested Butte town council gave the nod to go ahead and make a 30-year financial commitment to the proposed solar farm that is planned to be built starting next year just south of town in what is commonly known as Avalanche Park.
Town staff will finalize an agreement with the Gunnison County Electric Association (GCEA) that will be purchasing power from the solar farm developer, Outshine Energy. Crested Butte will agree to purchase the so-called “renewable attributes” for 2.5 cents per kilowatt hour for 30 years. Because the town is subject to Colorado’s TABOR limitations on annual appropriations a 30-year contract cannot be signed but there will be a commitment for that time period. In turn the GCEA will enter into a contract with Outshine for the purchase of the power and renewable attributes for 6.8 cents per kilowatt hour.
The GCEA wants to keep the playing field level for all its members and bring in the cost of the electricity produced at the solar farm at the same rate as it pays its main wholesale electricity provider, Tri-State Generation and Transmission Association, Inc., so the town is essentially agreeing to subsidize the cost of the solar electricity from 6.8 cents to 4.3 cents per kilowatt hour.
The 2.5 cent subsidy basically brings the energy cost in line with GCEA’s established rate structure based on the 4.3 cents per kilowatt hour it pays Tri-State. GCEA project specialist Matt Feier explained that by “charging the town GCEA’s established rate structure for energy consumed, plus a $0.025/kWh REC fee, effectively allows the Town to pay for its share of the new solar array without shifting development and operation costs onto the membership as a whole.”
Crested Butte is agreeing to do that. The premium is expected to cost the town between $29,260 and $39,047 per year over the next three decades.
Town planner Mel Yemma explained that by supporting this project, the town and GCEA are physically bringing a new, local renewable energy source online, versus existing “Green Power Programs” that purchase renewable energy from already existing wind and solar farms.
The cost of building the solar farm has also increased with the cost of materials, the current cost of labor and the addition of building some avalanche mitigation on the site. So the ultimate cost of the long-term electricity has gone up as well.
The town agreed last year to lease the land that includes the Baxter Gulch Trailhead to Outshine for 30 years. Outshine Energy has changed the name from Avalanche Park to Sunshine Park and the goal is to place a 1.62 Megawatt solar array on the site.
Yemma said that the hope is to have the solar RECs make up about half of the municipality’s total electric use. Feier said it is important to have significant subscribers lined up to purchase the RECs. While he indicated Crested Butte would be the biggest subscriber, he has talked to other institutional users and while no contracts are signed, he said he feels good that at least 72 percent of the RECs are spoken for. “We have developed a pathway to help fund the entire project without incurring additional costs to the membership as a whole,” he said.
GCEA chief executive officer Mike McBride said Outshine came in with the best overall bid and despite the recent price hikes it was still lower than some of the original bids from other companies. He said the GCEA was working to get as much participation with selling the RECs before the solar is built so that the burden of the additional cost of the energy is not shifted to the entire GCEA membership.
Yemma emphasized that the construction of the solar farm would help the town accomplish major goals within its Climate Action Plan.
Councilperson Anna Fenerty admitted she was new to the council and the details of the project but wondered why that site was considered a good place for a solar farm given its limited sun exposure and the year-round shade from Gibson’s Ridge in the afternoon.
“It is not the sunniest spot on the planet,” admitted Feier. “But the site was chosen for a number of factors. The town was the landowner and was willing to provide a reasonable lease. The cost of private property is very high right now. It is next to the electric substation and transmission lines so that location is very valuable. A sunnier spot further away from a substation could be a lot more expensive to run a line to. Property closer to Gunnison also comes with issues related to the sage grouse. All these things made us choose this site.”
Taylor Henderson of Outshine agreed that the sun exposure wasn’t optimal on the property, but the substation location was. “We really like that element of the project,” he said. “We constantly evaluate and do tradeoffs with these types of projects and we are comfortable with that one.”
“I’ve lived beneath Gibson’s Ridge my whole life and it’s cold,” said Fenerty.
Fenerty also wondered if given limited town-owned land and increasing issues, if perhaps there could be multiple uses on the property and suggested the solar panels could be placed on top of a covered parking garage to help alleviate traffic in Crested Butte. Feier said that would significantly delay the project since a parking garage had not been designed and is not “shovel ready” while the solar farm is ready to start construction in 2022.
Town manager Dara MacDonald said a covered parking garage is preliminarily on the town’s radar in conjunction with other projects.
Councilperson Mona Merrill said the town had looked at a number of things that increased traffic to the site such as a campground and the Colorado Department of Transportation and county indicated there would need to be traffic mitigation included in any plan such as additional turn lanes constructed. That would be expensive and time consuming to get approval. “It’s been pretty fleshed out I believe,” she said.
As for the idea of putting housing on the site, avalanche studies indicated it would be extremely dangerous in a big snow year. Henderson said it was his understanding that the federal Housing and Urban Development (HUD) department wouldn’t provide insurance for affordable housing on the location.
Councilmember Chris Haver said that through the process he was appreciative the town would retain ownership of the land while leasing it for 30 years.
Staff will work out some final details of the agreement to purchase RECs and return to council to have them consider a formal contract.
