Wastewater plants and drinking water systems can account for up to one-third of a municipality’s total energy bill and these costs are invariably passed on to the consumer. Treatment of wastewater and stormwater requires significant energy to run the pumps and the treatment systems. The drinking water system also uses a lot of energy to pump water from the 700 ft deep ground-water wells to the treatment plant, treat it with chlorine gas, and then pump it up to consumers. Around the time of the inception of the Town of Silver City’s Office of Sustainability, an opportunity became available to decrease the Town’s wastewater treatment costs significantly through the installation of a photo-voltaic array that powers most of the wastewater treatment plant facility.
Legislation enacted in 2011 by the State of New Mexico created a unique funding opportunity for municipalities to install money saving photo-voltaic (PV) arrays through what is called a Power Purchase Agreement (PPA) that requires no money out of pocket from the Town. PPA legislation allows third party entities to install, own and maintain a solar array located on a host customers property (in this case the “host customer” is the Town of Silver City). Since private corporations can get the tax benefits that municipalities cannot, they have the ability to install such a system, reap the tax benefits and sell the electrical power to the municipality at a cheaper rate than the local electric utility rate.
The town of Silver City entered into a PPA contract with Affordable Solar, an Albuquerque-based solar provider, where the Town buys the power produced from the PV system at a set rate for a 20-year period. The Town was able to lock into a solar renewable energy credit at a rate much higher than the current PNM credit by applying early in the process (over time the credits decreased as PNM’s renewable energy quota was reached). The savings on the electric bill for the Town and its citizens is estimated to be between 2 and 4 million dollars over the 20-year contract. These savings were calculated using the rate we were previously paying to the utility, the new lower flat rate we will be paying for the next 20 years, and predicting the increase in rates over that time period. The solar facility is owned, operated and maintained by Affordable Solar. The Town’s only responsibility is to buy the power from Affordable Solar for 20 years. The 51 page PPA legal document was years in the making and covers both parties in various defaults or problems which could arise.
Once the contract was signed in 2013, construction started, and in less than 6 months the 1 Megawatt array of photovoltaic panels covering six acres adjacent to the Wastewater Treatment Plant was up and running. There are around 5,000 photovoltaic panels that make up the array.