The good news is that the City of Lathrop is saving $9,320 a month in energy costs since committing to a solar project on some of the city’s largest buildings.
But getting there was anything but a straightforward path.
On Monday night, the Lathrop City Council voted to streamline the power purchase agreement that through a series of ownership changes ended up being held by a company that declared bankruptcy.
While the financial troubles of SunEdison Inc. presented a challenge in terms of paperwork, their bankruptcy in no way jeopardized the city’s commitment to the project as it was purchased by NRG Energy Inc. almost immediately. And as an act of good faith – since Lathrop’s project had not yet come on-line – the New Jersey and Houston-based energy giant agreed to start cutting checks to the City of Lathrop for the total monthly savings that the city would have enjoyed had the project not hit the bankruptcy roadblock.
According to the staff report, NRG agreed in September of 2016 – almost two years after the city approved the contract with Lathrop Solar 1 LLC – to make the monthly payments until the project came online in mid-January of this year.
The council’s action on Monday involved amending and restating the amendment to clarify that all the power generated by the two phase 1 projects – the corporation yard facility on Louise Avenue and the Harlan Road basin – are being sold to the City of Lathrop through a single power purchase agreement.
Future phases of the solar project will be funneled through the same single agreement.
And even though Monday’s decision by the council was a simple housekeeping action to tidy up the paperwork surrounding the project, it wasn’t without controversy.
Lathrop City Councilman Steve Dresser asked several pointed questions of city staff to try and make sense of the convoluted series of transfers that led to the city’s solar project being held by a company that ultimately filed for bankruptcy – eventually getting clarification from City Attorney Salvador Navarrete that the current holder of the agreement made good faith efforts to advance the city the money if would have saved had it not been held up.
The council initially based its need assessment for the solar project on the intention to offset the escalating costs of energy provided by PG&E. As a part of the agreement that was signed, Lathrop will have the opportunity after six years to purchase the equipment that is being leased – with no up-front cost to the city – outright after six years of the 25-year contract.
To contact reporter Jason Campbell email email@example.com or call 209.249.3544.