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Receive an update regarding the landfill solar farm project.
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BACKGROUND:
The City owns a closed landfill at 1399 Valley View Lane and the George Bush Turnpike. The landfill closed in 1987, and various ideas for the site have not materialized due to the regulatory and cost restrictions of building on a former landfill. The landfill was identified as a potential site for installing solar panels in the 2020 Solar Feasibility Study.
The Sustainability Plan aims to increase renewable energy and recommends that the City pursue a 100% renewable electricity contract for municipal operations. In November 2021, City staff released an RFP to lease the site for solar development with the intent of entering a power purchase agreement to source electricity from the site.
On March 22, 2022, the City Council authorized the City Manager to negotiate and execute an option agreement with BQ Energy Development, LLC, to lease the former landfill at 1399 Valley View Lane to develop a solar farm and a related power purchase agreement. The option agreement went into effect on June 1, 2022, granting BQ Energy (now Clean Capital) the option to lease the site for an annual fee of $10,000 while developing the project and meeting regulatory requirements.
On March 1, 2024, Clean Capital provided written notice that they desired to terminate the project's development. Clean Capital cited a decreased system size from the original estimate and increased construction and interconnection costs. Clean Capital stated they would not be able to move forward with the lease and subsequent power purchase agreement at the previously proposed electricity rate of $0.044/kilowatt-hour. Clean Capital's updated electricity rate to continue with the project was a 75% increase from the initially proposed amount and over two cents more per kilowatt-hour than the City currently pays for electricity.
DISCUSSION:
The City's current electricity contract expires February 28, 2025. The City will req...
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