Water district looks into solar
With public agencies looking for ways to cut costs, rebates available under the California Solar Initiative (CSI) are quickly being drawn down, Sophie Akins, legal counsel for the Ramona Municipal Water District, said.
At the board’s last meeting on March 9, Akins asked if the directors are interested in submitting an application for a state solar rebate. To do so would not cost anything, she said.
Explaining that CSI rebate rates are established over 10 steps, with Step 1 being the highest rebate amount, Akins said the steps decrease as more applicants apply for and reserve the rebate funds.
“We’re currently at step six and each time we drop down in steps, the rebate drops by half a million dollars or so, depending on the project size,” said Akins.
Akins said she believes in a month the rebates will drop to step seven, from about $1.5 million to $1.1 million.
RMWD would have a 30-day window to submit a reservation fee, she said, with the fee depending on the size of the project. During those 30 days the board may withdraw the application without penalty. For the size of the project the RMWD would be considering, Akins said the reservation fee would amount to about $20,000.
Sequoia Solar has approached the district about pursuing a solar project at no cost to RMWD under a “Power Purchase Agreement” (PPA) structure before the state rebates drop, according to Akins. Under such an agreement, a private company, known as the power provider, constructs a solar project on property owned by the water district at the power provider’s sole cost. In exchange, the water district agrees to purchase all electricity generated by the solar project for the length of the PPA at an agreed upon price. The price paid would be less than the amount paid to San Diego Gas and Electric. After six years, the water district would have the option to purchase the solar project at fair market value.
Akins said the matter can be brought back to the board at its next meeting after evaluating proposed sites best suited for solar, which include the Santa Maria Sewer Service Area and the San Vicente Wastewater Reclamation Facilities.
Director George Boggs asked whether the environmental aspects would be considered also.
“All the options will be vetted with the due diligence process,” Akins said. The water district would have to comply with the California Environmental Quality Act (CEQA), she said.
“I think it’s a worthwhile project to consider,” said Director Darrell Beck, adding that the environmental costs to do this may exceed the savings.
The board voted 5-0 to submit an application to reserve a rebate.
The board also discussed RMWD customers in the Interruptible Agricultural Water Program (IAWP) and the refunding of IAWP penalties since the district overall did not incur any penalties.
The IAWP is a Metropolitan Water District (MWD) program that provides a discount to qualified agricultural customers. The terms and provisions of the IAWP are dictated by the metropolitan district, including the amount of cutbacks (currently 25 percent) and penalties. The IAWP program is monitored by MWD on a total district basis. If IAWP customers in the Ramona water district, in total, do not exceed the district’s IAWP allocation, then RMWD does not incur penalties.
Of the nearly 200 RMWD customers in the IAWP program, 23 were penalized for an approximate total of $20,000 in calendar year 2009 for exceeding their allocation, said RMWD Chief Financial Officer David Barnum.
The district, as a whole, did not exceed its allocation and therefore did not incur penalties. Barnum said it has been the practice in prior years to refund the customers. However, he added, it is at the discretion of the board.
Board President Jim Robinson said there could be many reasons that some customers exceeded their allocation and others did not. The refund, he said, could help keep some customers in business.
The board approved the refund, 3-1, with Director Red Hager voting against it. Boggs stepped down and did not vote, saying he is an IAWP customer and potentially a beneficiary of the decision. Barnum said each year the IAWP discount becomes smaller and the MWD will end the program Dec. 31, 2012.