Florida-based ESA Renewables has retained most-favored status in Johnson City’s move to work out a deal with a company to install and operate photovoltaic (solar panels) systems on 27 city-owned buildings, schools and other structures.
The subject was at the top of the list at Tuesday’s City Commission agenda meeting and will be on the table tonight for discussion at the commission’s meeting.
On Oct. 20, commissioners deferred discussion on the move. The matter was pulled when Public Works Director Phil Pindzola, who solicited proposals from companies specialized in the field, learned the Tennessee Valley Authority had accepted all 27 applications for consideration under its Generation Partners Program.
That was 10 more than what the company had calculated in a rough draft. So the entire plan, including savings estimates, kilowatts used and saved, time frames and other estimates, had to be refigured. That is what commissioners will consider tonight.
Time will be of the essence. The TVA program only allows for a six-month window from when a contract is signed until installation is complete at all locations.
The revised proposal is for ESA to install 200-kilowatt systems on 27 sites, including elementary schools, the Keystone Community Center, Johnson City Public Library, Municipal and Safety Building, as well as other schools and city buildings.
The first proposal revealed an estimated annual saving to the city of more than $122,000 in each of the first 10 years of service. The number tossed around Tuesday was closer to $150,000.
Should negotiations lead to a contract, the city will not finance or be liable for the operation of the systems.
Under the program, ESA would get an up-front credit of roughly 30 percent of the cost of installing the systems. TVA also would pay it 12 cents per kilowatt hour for all electricity generated by the systems that exceed the average usage.
“The tax credit to the company is probably the biggest chunk,” City Manager Pete Peterson said Tuesday. “But the company is taking the biggest risk.”
When the system generates more electricity than is being used, the excess automatically flows into the grid and is sold to TVA, thus the incentive for the firm that installs and maintains the new systems. Meanwhile, the city would be able to lock in current usage rates and receive a royalty consisting of a percentage of the savings. That amount would be negotiated with the company.
If commissioners vote to go forward, negotiations would begin between the company and the city. The city would hire an attorney well-versed in this particular type of relationship, it also would need to conduct a structural analysis of the roofs on which the panels will be placed.
At this point, it’s unclear whether a contract would include an agreement between the two entities regarding any shared responsibility involving roof repair. But as of this week, Peterson seemed to think that would likely be the city’s responsibility and the repairs are a need that would have rolled up on the fix-it list sooner or later.
Pindzola said he wants to set up monitoring devices at all schools on which the panels will be placed. The devices would be used as an educational tool for students who could observe for themselves the energy being saved.