Friday, July 25, 2014

Solar Energy Could Save Lansing Schools $1.4M

The Lansing Board Of Education (BOE) voted unanimously Monday to allow Superintendent Chris Pettograsso to send a letter of intent in support of a solar power company, Dynamic Energy, application for a NYSERDA (New York State Energy Research & Development Authority) grant to build a nearly two megawatt solar array that could provide 95% of the school district's electricity.  The project is estimated to save the district just under $45,000 in energy costs inits first year, and almost $1.4 million over the 20 year life of the contract.

"The concept is we would contract with this company to install a solar array, a big field of panels," said BOE President Glenn Swanson.  "Because we don't want to use up our playing fields and we don't have enough roof space it will likely be on an off-site location.  There is a lot of work to be done to figure that out and all the legal aspects of it."

TST BOCES Energy Management Coordinator Chris Santospirito and Jim Slavetskas, who acts as project manager for many of the Lansing school district's capital projects, attended Monday's meeting to answer questions about the 300 page proposal.  Dynamic Energy has proposed an 1,800 kilowatt system that would generate an estimated 2,226,952 kilowatt hours in the first year.  Santospirito said that the $44,539 savings in the first year accounts for 18.8% of what the district is currently paying.

"In the proposal it's 1.8 megawatts," Sanispirito said.  "We've asked them to rethink that because the schools use about two and a half million killowatt hours of electricity a year.  We're trying to get closer to that, but we don't want to get so close that you are paying for electricity that is generated that you're not using.  Then you don't get the credits back from NYSEG.  So you really don't want to go beyond 90% or 95% in the best interests of the economics of the district."

School Superintendent Chris Pettograsso told the board that Dynamic Energy has worked with institutions including Skidmore College on similar projects.  She said that Lansing is under no obligation until it signs a final agreement, leaving plenty of time to get questions answered, talk to other institutions and vist installations.  She said the only rush is to send the company a letter of intent to support their grant proposal before the July 17 application deadline.

"The resolution (the board was to vote on Monday) really just states that you are giving me the authority to send a letter of intent to allow Dynamic Energy to submit a proposal for a NYSERDA (New York State Energy Research & Development Authority) grant," explained Pettograsso.  "That's where we are in the process right now.  It's clear that we have to receive the grant, we have to agree to the final proposal that Dynamic Energy provides us, and we have some questions we need answered.  Tonight is just about saying I can work with this company to go ahead and apply for the grant."

"Our lawyers are suggesting we enter into an agreement that we can get out of at any time, because legally we can't obligate future boards to something," Swanson said.  "That is the legal sticky point.  There is a lot more study and work to be done."

Sanispirito said that no school systems in the state have been able to successfully implement a solar project of this scope.

"Let's be first," said BOE Vice President Christine Iacobucci.

"You will be first," Sanispirito replied.  "There is no other public school system in New York State  that has been able do a system like this because no other company has been willing to honor the non-appropriations clause in the law.  The key is to work with the solar company so that you're starting out paying for your energy at a lower cost than you're currently paying.  Not only will you be first in complying with the law, but you will be first in terms of having the largest system for a public school district."

Sanispirito explained that the school district will have no capital investment in the project because it will be purchasing the power from Dynamic Energy, which would build the 6,000 panel solar array on about 10 acres of land owned by Cayuga Operating Company (COC), which owns the Cayuga Power Plant in northwest Lansing.  If the NYS Public Service Commission approves a repowering plan in December a 2MW solar array will be part of the project.  She says COC owns over 400 acres, more than enough to accomodate both arrays, and noted that COC attorneys confirmed that if the plant is closed or sold the lease contract can insure that the school array land is not taken away.

"The solar company invests all of the money on the front end," Sanispirito said.  "They take care of it.  They insure it.  They inspect it.  They will also have to enter into an agreement with the Cayuga Operating Company to lease the land.  So there is no money invested by the district.  Instead of Lansing Central School District writing a check to NYSEG they'll write a check to the company that's going to finance this.  You'll buy the electricity generated by the solar panels instead of from the other companies."

The project is by no means assured.  Pettograsso said that providing a letter of intent is only the first of many steps.  Sanispirito added that he company must be able to supply electricity at less than the district is currently paying, and that state and federal grants and tax credits and the NYSERDA grant will decide whether the company can make a firm offer to provide energy for the Lansing schools.

"If they win it they're going to get paid about 24 cents per kilowatt hour to build the system," Sanispirito explained.  "That's their incentive.  In addition to that they offset the cost of this through a 30% federal tax credit, a New York State $5,000 credit, and if Congressman Reed is successful in bringing back the super bonus depreciation factor they'll be able to depreciate 50% of the system in the first year, and fully depreciate it in five.  That's how they get their money back."

"It is a really exciting opportunity for us," Pettograsso said.  "Although we came into in the last few months, Chris and Jim have been working on it for over two years.  Chris has been the one crossing the Ts and dotting the Is for us.  It is certainly an opportunity that we are excited for, but there are still a lot of 'ifs' in it."


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