City of Lathrop’s power bill is about to get a major adjustment. 

Thanks to the blessing of the city council – who on Monday night voted to approve entering into a contract with San Diego-based Borrego Solar for a 1.046 megawatt generation system – it’ll take only 12 months before the city sees just under $80,000 in annual savings over what they would pay based on current PG&E market rates. 

With energy costs expected to rise over time, the amount of money the city will save is expected to increase also – nearing $4.5 million in savings over the life of the 25-year contract that will require no money upfront – and the option to further expand the existing footprint will still be on the table. 

The city has been working hand-in-hand with TerraVerde Renewable Partners to evaluate the city’s need and what sort of a system would be best based on that assessment – working within the council’s parameters that no avenue be researched if it doesn’t save the city at least $20,000 annually. The cost of that consulting will be incorporated into the overall cost of the project which is being financed by Borrego, with the company owning the system for the life of the 25-year lease and in turn providing the city with a flat rate of just over $0.14 per kilowatt-hour for its electricity. 

Of the three companies that TerraVerde examined, Borrego came out on top because they provided not only the lowest power price cost but also the lowest power price escalator – 2.95 percent – and a system buy-out option at year six for just over $3 million. 

Panels will be placed at city hall, the community center, the corporation yard and water treatment plant and the South Harlan Road storm drain basin. Those sites were trimmed from a much more expansive list that was originally proposed. 

The power purchase agreement platform has become a popular way for government entities to set their energy costs in stone while at the same time not leveraging their future or borrowing more than is economically feasible. Companies like Borrego – which has been around since 1980 – cater specifically to commercial and government accounts. 

As a backup the city will still have all of its facilities connected to the existing PG&E power system and in the event of a solar outage or system malfunction it would automatically kick over to prevent the loss of power. A representative from Borrego said that the company utilizes both in-house and contracted technicians to fix problems depending on the severity and the impacts, and that it’s also in their best financial interest to have everything functioning properly. 

The council voted unanimously to approve the contract.