LATHROP — Could hedging power costs end up saving taxpayers a bundle?
It all depends upon where electricity costs do over the course of the next three decades.
Last week the Lathrop City Council heard a proposal by a solar energy firm that could eventually lead to an overhaul of the way that the municipality pays for its electricity. They would shun the standard PG&E model and go instead with an extensive solar power system that would fix the rate that the city pays over the life of the agreement.
The argument, in the eyes of the firm, is that San Francisco-based PG&E’s rates will only continue to rise year-after-year, and therefore the flat-rate model would defer massive payments that would only continue to grow as the city expands to meet a burgeoning population base.’
Five carefully selected sites were chosen for the mock-up that was presented to the council. One of the them — a water pumping station on the outskirts of the community — would end up paying half as much per kilowatt of electricity under the reworked agreement.
Not everyone in attendance, however, was sure about whether inking the contract was the best move.
Councilman Omar Ornelas wanted to know whether the city could finance the overall construction of the new power generation sites rather than partnering with a separate agency and renting the use of it.
South San Joaquin Irrigation District General Manager Jeff Shields, who was in attendance to talk about the city selling a portion of its surface water allotment to Tracy, said that the district’s system at the treatment plant in Escalon has the same capacity that the city is pushing for. Solar contracts, however, can be complicated and he offered his expertise to make sure that they don’t agree to anything that could end up hurting them in the long run.
Lathrop will now have to decide whether to move forward with a competitive bidding process that will get them both a price and a bank that can finance the construction of the project.
To contact Jason Campbell, email email@example.com or call (209) 249-3544.