L.A. Council To Vote On $1.6 Billion Solar Contract

L.A. City Council Chambers | Photo: Mr. Littlehand/Flickr/Creative Commons License

[Update, 12:03 PM: the City Council's vote has been delayed until Tuesday, November 20. We'll bring you more information as we receive it.]

The Los Angeles City Council is poised today to approve a $1.6 billion solar power purchase agreement by the Department of Water and Power (DWP) that could go a long way toward helping DWP meet its renewable energy targets.

The council will decide whether to finalize a 25-year agreement for the DWP to buy power from a 250-megawatt solar power plant nearing construction on the Moapa Indian Reservation about 30 miles north of Las Vegas. The agreement with K Road Moapa Solar, LLC, would boost DWP's renewable energy portfolio by nearly 3 percent.

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Under the state's Renewable Portfolio Standard law, DWP, the nation's largest publicly-owned utility, must generate 25 percent of its power from renewable sources by 2016 and 33 percent by 2020. The department at one time exceeded the 20 percent mark, but it now gets about 17.8 percent of its power from wind, solar, and other renewable sources, according to a recent report by the City Administrative Officer.

As part of the agreement, DWP would have an option to purchase the solar energy farm at various stages beginning in 2026 for a starting price estimated at between $339 million and $398 million.

The agreement has the support of Mayor Antonio Villaraigosa, who has called the Moapa project and another proposed solar power purchase agreement with the Sempra Gas and Power's Copper Mountain Solar 3 facility in Boulder City, Nevada "a defining moment for the city's economic and environmental future."

The council's approval would authorize DWP to build an $18 million, 5.5-mile transmission line on federal land to get the solar-generated electricity to the city. A favorable vote would trigger the drafting of an ordinance by the City Attorney's Office to finally ink the deal before the end of the year.

The project is expected to add an additional $0.80 per month to the average residential customer's bill when the project starts to come on line in 2016. The City Council last month approved two years of rate hikes totaling 11.1 percent, or about $3.65 per month for residential customers and $15 for small commercial customers.

K Road Solar plans to build an estimated 910,000 solar panels on the 2,500-acre site on tribal land. The project, the first utility-scale solar power facility approved for tribal lands in the U.S., was green-lighted by Interior Secretary Ken Salazar in June. The Moapa Reservation is on land considered an important migration corridor for the federally threatened desert tortoise.

The project has support from the city's Ratepayer Advocate, Fred Pickel, who said the agreement guarantees the city a price for the solar energy that is about half what it has been in other large-scale solar projects in the last five years.

"We're under a legal obligation to move forward. The timeline to develop these things is such that we have to move forward now," Pickel said. "This is very attractively priced and much cheaper than some of the earlier projects."

Pickel, however, urged state and local lawmakers to begin a wider discussion about reducing the state renewable energy targets, given a steep decline in the cost of natural gas due to the increasing use of hydraulic fracturing, a.k.a. "fracking," to extract gas. That cost has plummeted to nearly one-quarter what it was in 2008. Given that California voters just approved tax increases to fund more renewable energy projects, Pickel's suggestion may not get very far.

With contributions by City News Service.

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