Buckman Direct Diversion Project Adopts Landmark Renewable Energy Contract

Solar PV - by DVW

In 1Q 2009, David Van Winkle and Dexter Coolidge of the Northern New Mexico Group of the Sierra Club met with Santa Fe Mayor David Coss, City of Santa Fe City Councilors and Santa Fe County Commissioners to convince them to use renewable energy for the Buckman water project. It became a reality last week.

$200,000 Utility Bill Savings Expected in 2011

The Buckman Direct Diversion Project Board (BDD has authorized a landmark Solar Energy Agreement (SEA) for the BDD Water Treatment Plant. American Capital Energy, Inc. (ACE) will build and operate a 1-megawatt solar photovoltaic (PV) plant to satisfy most of the electrical energy required by BDD’s advanced water treatment facility.

About eight acres of solar panels located in an out-of-view location next to the water treatment plant will generate as much as one megawatt of solar electricity. The SEA provides for a 20-year fixed solar electricity price of $0.155 per solar kilowatt hour (kWh). During the first year of operation more than 2.34 million kWh will be generated, supplying much of the water treatment plant electricity at peak production and about 30 percent of total energy needs.

In October 2009, (ACE) was selected as the top-ranked bidder as part of competitive procurement advertised by the BDD Board for solar energy services. ACE is a national solar developer, which has a Santa Fe office and has built a 500-kWh solar project in Taos, New Mexico. Since last fall, the New Mexico Public Regulation Commission (PRC), the Legislature, and the New Mexico Supreme Court have addressed the legality of solar developers selling solar electricity to a host customer. The New Mexico legislature passed a new law that goes into effect in 2011specifically authorizing such arrangements and the New Mexico Supreme Court has dismissed an appeal of the PRC ruling by two public utilities. These events clear the way for ACE to proceed with construction of the photovoltaic electrical generating system, which ACE will finance, design, build, operate and maintain. Construction is scheduled to begin this summer and be completed this fall.

According to Rebecca Wurzburger, BDD Board chair and Santa Fe Mayor Pro Tem and Santa Fe City Councilor, “The benefits to our customers are significant: fixed price solar electricity for 20 years, no upfront capital costs, reduced carbon footprint, and economic benefits from the construction and 20 years of maintenance. We are delighted to have authorized this contract, and have instructed the BDD Project Manager to secure more solar energy.”

The solar system will be located on federal land owned and managed by the Bureau of Land Management (BLM) adjacent to the south border of the BDD water treatment plant. The BDD will pay $10,000 annual rent to the BLM for an additional 8.5 acres of right-of-way.

The SEA requires ACE to minimize soil disturbance during construction, restore vegetation, and to effectively control weeds, dust, and erosion. Drinking water cannot be used for construction, and water used to clean solar panels during operation is restricted to a maximum of 5,000 gallons per year. ACE expects to use less than that.

The SEA allows ACE to use tax incentives and accelerated depreciation, which would not be available directly to the BDD as a non-taxable public entity. The BDD will receive all the Renewable Energy Certificates (RECs) and other environment credits for sale to PNM under the utilities’ current large solar PV program. PNM will not legally commit to purchasing the RECs until after the solar generating plant has been constructed and tested to pass PNM requirements. The BDD has no price guarantees for the RECs. Under PNM’s existing solar incentive program, the value of the RECs will reduce the BDD Water Treatment Plant total annual power bill by nearly $200,000 in 2011.

“The customers we serve deserve the benefits of clean, fuel-free, renewable solar energy. We are trying to get the solar project built before the rules change again,” said Virginia Vigil, BDD Board vice-chair and Santa Fe County Commissioner. “We will get the project built by fall before the BDD Project goes on line. Cooperation between city, state and federal governments have been necessary for the success of this project and I have confidence that PNM will also be a cooperative partner in this project,” she said.

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About the Buckman Direct Diversion Project - The BDD Project will provide a sustainable way for the City of Santa Fe and Santa Fe County to access surface water supplies by diverting San Juan-Chama Project water and native Rio Grande water to reduce their reliance on over-taxed ground water resources. Design and construction on the BDD began in September 2008 and is expected to be completed, with the project operational, in spring 2011.

About American Capital Energy –With offices across the country, including Santa Fe, New Mexico, American Capital Energy (ACE) provides full-service project development, finance, and construction services for large-scale solar energy projects. ACE is committed to furthering the utilization of solar power by America’s most forward thinking decision makers by offering customized solar photovoltaic systems designed for reliable long-term performance