2016.04.04 CC Minutes - Laserfiche WebLink

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Hugo City Council Meeting Minutes for April 4,2016 Page 4 of 5 six for washing machines and four for toilet replacement for a total rebate amount of$1,800. Annual water savings are estimated to be around 100,000 gallons. Moving forward, the rebate amounts will increase, and the program will be promoted in the City newsletter. The program will end in June, 2017. Update on Solar Subscription Agreement Community Development Assistant Rachel Leitz updated the Council on a proposed solar subscription agreement. In July 2015, the City joined the Met Council's request for proposals along with 23 entities for solar subscriptions. Lottery results were released in February, and the City was paired with Geronimo Energy. Hugo was allotted two lottery tickets equivalent to 240 kW (402,960 kWh). The City of Hugo uses approximately 1 million kilowatt hours a year, and solar would provide approximately 38% of the total use through this subscription agreement. The process would start with Geronimo building a solar garden and providing energy to Xcel. The City would see a bill credit from Xcel and would pay a portion to Geronimo. The result would be the City saving one penny per kWh, resulting in an annual saving of$4,029.60 the first year and $3,572.86 the 25th year, considering a degradation factor of.05% each year. The total savings to the City would be $94,921.06 over the 25 year subscription agreement. Xcel has not approved the projects yet and Scandia has not yet approved the site for the proposed solar garden. Also, Geronimo has more proposed gardens and could offset more of the City's usage with a subscription. The downside would be future solar panels or energy sources may offer something better during the 25 year subscription agreement. The Council talked about the state mandate that requires, by the year 2020, that 20% of energy comes from alternate sources such as solar. There was discussion about Connexus Energy's program that allows for customers to buy shares in their solar gardens, and how it compared to Xcel Energy. Also discussed was a possible increase in customer costs by Xcel to pay for projects and the possibility of other forms of energy, such as wind, that may become available in the future. It was also noted that projects were not moving forward very quickly due to concerns, and there was a general hesitation from Council to commit to something when things are not yet in place and operational, and the benefits were not clear. City Administrator Bryan Bear explained there are many solar subscription offers being made in Xcel's territory due to the state mandate. There is also a federal tax credit being offered as further incentive to develop these projects. He said it could be put in contract that, if a mandate caused this program to seize, the City could be released from the contract. He also pointed out the savings would only be about $4,000 per year, so there is not a lot of pressure to do it. Bear stated that the Met Council has provided the contract that the providers were using, and agreed that time and effort needed to be spent on reviewing it. City Attorney Dave Snyder suggested asking those who were proponents of these contracts to make their case, perhaps Geronimo and Xcel. Council reached consensus to get a summary from the providers of the businesses on the pros and cons of solar subscription contracts.