Metropolitan Council

Environmental Services (MCES)

Solar Project at Blue Lake

Wastewater Treatment Plant

Fresh Energy; 2013 Power Breakfast

September 24, 2013

Jason Willett, Director MCES Finance & Energy

• A regional governing body of 16

Metropolitan Council Members and

Chair Susan Haigh

• Operates Metro Transit, which carried

81 million bus & rail passengers in

2012

• Operates MCES, which collects &

treats wastewater at rates 40% lower

than peer regions

• Partners with communities & the

public in planning future growth

• Provides affordable housing

opportunities for low- and moderate-

income residents

Metropolitan Council

MCES Wastewater System Seven

Treatment

Plants

600 miles of

Regional

Interceptors

Estimated $5

Billion

Replacement

Value

Capacity to

treat 372

million gallons

per day of

Wastewater

Flow

107

Communities

Connected

MCES Metropolitan Plant

MCES Performance Awards• National Association of Clean Water Agencies

(NACWA) – compliance with clean water discharge

permits• All plants, most years

• MCES/Xcel Energy Awards• 2009, 2010, 2012 Efficiency Partner Award

• 2011 Gold Award

• NACWA Operations Award for Environmental

Achievement (Inflow/Infiltration program)

• Metropolitan Plant Solids Management Building

design

• 2012 Governor’s Continuous Improvement Award

for the Council’s energy saving initiative

• Reduces costs for wastewater rate payers

• Reduces exposure to rising energy costs

• Improves our position for emissions

regulations

• Offers external societal & environmental

benefits (e.g. jobs & pollution reduction)

MCES Interests in Energy Work

• Energy: Creates clean, renewable energy

• Energy: At site energy use eliminates utility line losses

• Capacity: Operates efficiently when utility grid has

most demand less need for other generation

• Capacity: Reduces need for utility reserves

• Environmental: No carbon or other air emissions

• Environmental: Uses little to no water

• Societal: Supports energy independence & security

• Societal: Creates jobs

• Societal: No use of limited fuel resources

Societal Benefits of Solar

• Lower life cycle cost (benefiting wastewater ratepayers)!

• Supports MCES Mission

• Provides beneficial use of buffer land around plant

• Provides price stability of some energy costs

• Reduced carbon emissions may save future costs

• Provides future opportunity to leverage facility

• Learning for MCES staff

• Visibility to encourage others

Benefits of Solar to the Council

Solar – Early Barriers

• High capital cost of solar panels

• Low electric rates meant avoided costs were low

• Federal tax incentives not available to government

agencies.

• Limited staff experience conservative assumptions.

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• Approaches tried:

– Traditional procurement/financing

– State bonding

– Public Facilities Authority’s “Green Reserve”

– Wind source proposal to Xcel

• Panel prices have dropped by 75%

• Electric rates and avoided costs have escalated

• New solar standby capacity credit was implemented

• New solar mandate, creating value for solar renewable

energy credits

• Council passed a new sustainability policy expanding the

definition of economic feasibility

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• Approach utilizes a competitively-selected 3rd party and PPA

helps procure Federal Solar Tax benefits and Renewable

Development Fund Grant

Solar – Now

Blue Lake Solar PV System

• 1.25 MW (ac)

• 5 to 10 acres

• Fixed panel system

• No Council capital;

and little risk

• Oak Leaf LLC

(private) takes

construction,

permitting,

connection,

technology, and

production risks

Minnesota River

Highway 101,

Shakopee, MN

New Anaerobic

Digesters

Future Solar Facility

• Production

• Avoided energy prices, including fuel

• Capacity Credits

• Value of Solar Tariff design

• Renewal Energy Credits (RECs)

Significant Uncertainties

Lessons Learned

• Engineering Assistance

– Electrical distribution & interconnect Specs

– Permitting

• Financial Assistance

– Firm vs. Interruptible Load

– On Peak vs. Off Peak load (impacts avoided costs)

– VOST, net metering, behind-the-meter

• Management Support

– Future Uses of Land

– Procurement decisions (Wages, MBE/WBE, local

content)

– Political Support

Financial Analysis Approach

Council’s Sustainable Policy

Elements:

• Energy and Emissions

• Water

• Fleet

• Solid and Hazardous Waste

Economic Feasibility

• Expected present value payback over life cycle!

Questions?