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Community Solar Garden Memorandum 3 Subscription Structure and Considerations: Community Solar Garden subscription agreements represent 25 year contracts. The city may subscribe up to 120% of the annual electricity consumption of one or more facilities. Once a community solar garden is operational, the city will make monthly payments to the garden operator for its portion of the energy produced. The city will also receive credits on its electricity bill from Xcel Energy for the city’s portion of the solar energy produced. The utility bill credit may also include a payment for the “renewable energy credits,” which would represent Xcel Energy’s acquisition of, and legal claim to, the solar energy attributes. The developer determines the subscription rate over the life of the project, and it is locked into the subscription agreement. Both developers offer a “pay-as-you-go” subscription with no upfront payments required from subscribers for the construction costs of the solar garden. Depending on the terms of the developer, subscription rates may vary based on the Xcel Energy rate plan of the facility subscribed and in some cases may include an annual escalation in the rate. Bill credit rates are determined by the Xcel Energy rate plan that applies to each facility the city subscribes and may change annually following review by the Minnesota Public Utilities Commission. Bill credit rates for 2015 varied by customer type as follows:  Residential: $0.12743 per kWh  Small General Service: $0.12431 per kWh  General Service: $0.09914 per kWh Additional Renewable Energy Credit payments are set at $0.03 per kWh for gardens smaller than, or equal to, 250 kW and $0.02 per kWh for gardens larger than 250 kW. The city has several facilities that qualify for the “Small General Service” bill credit rate, however the majority of the city’s facilities and electricity use qualify for the “General Service” bill credit rate. While electric demand from the city’s accounts exceeds the 920 kW of solar garden capacity offered to the city through the lottery, the city’s “Small General Service” accounts represent approximately 86 kW of solar garden capacity. The city may transfer or terminate its community solar garden subscription under certain conditions and termination fees may apply. Both subscription agreements provide guarantees for a percentage of the solar garden’s estimated future production under certain circumstances. Estimated Savings and Risk: Under business as usual conditions, the proposed subscriptions are expected to generate a net savings to the city over the life of the agreements. The Metropolitan Council and the Clean Energy Resource Teams (“CERTs”) provided calculators to estimate the potential financial impact of subscribing to a community solar garden. Details of the two proposed subscription agreements before the City Council were entered into the calculators, and the results from three scenarios appear in Appendix I. The calculators are 37