Jemez Mountains Electric Cooperative’s tentative plan to purchase electricity generated by two local solar arrays may be impeded by a Tri-State Generation and Transmission policy.
According to the Co-op’s contract, the Co-op must purchase all of its power from Tri-State with an exception of 5 percent, which can be generated by renewable energy resources. Instead of building its own renewable energy infrastructure, the Co-op is in negotiations with Pojoaque Valley Schools and Rio Arriba County to purchase electricity generated from their own independent solar array projects.
During the Co-op Board of Trustees regular meeting, May 25, Board member-at-large John Tapia said Tri-State’s Member System Distributed Generation Policy could make this plan difficult.
“It is all dependent on how these entities get their money,” he said. “If they get it through the bank and finance the money it is going to be difficult for the Co-op to actually break even with purchasing power from them. Now, if they have bonds or they have money available to construct it and do it, it’s going to be a lot easier. Tri-State, that policy, just makes it really, really difficult for Co-ops.”
While the policy allows the Co-op to purchase power from a third-party, the two entities must enter into a Purchase Power Agreement that outlines how much the Co-op will pay for each kilowatt hour generated by the array. Tri-State credits the Co-op for each kilowatt purchased.
When a third-party, such as the County or Pojoaque Schools, chooses to finance the construction of a project through an outside lender, the two entities have to come up with a purchase agreement that is beneficial to both parties. The third-party has to factor in all costs, including loan interest, when coming to an agreed upon price.
Pojoaque School Board President John Paul Romero III said they are waiting to look at the results from the Co-op’s feasibility study for the solar array and have made no financing decisions for the proposed project.
“It has to be a win-win for both people (sic),” Romero said. “Initially on these projects, there is going to be some monies put in by one side and monies gained by the other. It takes money for infrastructure building if there is going to be monies gained by people who purchase the power and the people who are selling the power.”
Rio Arriba County is moving forward with its plans to construct a 1.5 megawatt solar array with Albuquerque-based Yearout Energy Services.
Earlier this year, Yearout began an investment grade audit of all County buildings to identify possible equipment and building improvements to make them more energy and cost efficient.
The County pays nothing for the services and equipment up front. Instead, the County will make monthly payments to Yearout for five to 25 years, dependent on the agreed financing terms. The County will use the utility cost savings generated by the building and equipment upgrades, along with any other necessary funds, to make these payments.
If the solar array plan goes forward, the County will finance it through Yearout.
County Economic Development Director Christopher Madrid said they have identified a range for the cost for the project, but the price has not been set.
Yearout Project Director Alex Montaño said, during the May 24 regular County Commission meeting, San Jose, Calif.-based company SunPower will manufacture and build the array.
SunPower has offices in Albuquerque, Santa Fe and Los Alamos.
Yearout submitted May 3 a preliminary design for the array to the Co-op. The company submitted a financial analysis May 22. He said they anticipated finalizing terms of a Purchase Price Agreement with the Co-op in “the coming days.”
An Inspection of Public Records Act request for the financial analysis and solar array plans has been pending with the County since May 29.