Article courtesy of Las Cruces Sun-News
By Steve Ramirez
LAS CRUCES – To buy or lease? That is the question for SunEdison. The answer could mean at least an additional $1 million profit to the city.
In consecutive weeks, SunEdison, a global leader among solar companies, has entered into one-year options with the city of Las Cruces to either buy or lease city land to develop and operate a solar generation plant. Monday, the Las Cruces City Council unanimously approved a proposed sale agreement with the company that could bring as much as $1.2 million to the city’s West Mesa Economic Development Fund.
Last week, the council approved a lease agreement that has the possibility of raising as much as $2.3 million during a 30-year term stipulated in the agreement. Those proceeds would go to the city’s Airport Fund.
Both agreements include one-year options to enable company officials and engineers to conduct feasibility and technical tests to determine the best location for the solar generation plant. The option year is also expected to provide SunEdison with enough time to learn if a proposed power purchase agreement with El Paso Electric is approved by the New Mexico Public Regulation Commission. Those options include a $1,000 payment to the city, and there is a provision that if another option year is needed, SunEdison would pay the city $1,500 for the extra year.
Christine Logan, city administrator for economic development and revitalization, clarified to the council and city administrators there will only be one solar generation plant. “Contrary to prior information, it’s important that the public understands that there is potential for only one solar project on the West Mesa,” Logan said. “The purchase agreement is one of two options SunEdison is considering, and they will pick one of them.”
SunEdison has entered into a planned power purchase agreement with El Paso Electric. That agreement calls for SunEdison to sell 24 megawatts of solar power to the utility. El Paso Electric Co. provides electricity to about 80,000 customers in southern New Mexico, most in Las Cruces.
The proposed power purchase agreement has been submitted to the New Mexico Public Regulation Commission, and Jared Schoch, Southwest Regional Sales Manager for SunEdison, said company officials are hopeful PRC approval could happen within the next few months. “We’re hopeful there will be a decision by the end of December,” Schoch said.
If the purchase power agreement gets PRC approval, SunEdison would be able to increase its solar power production in North America by more than 21 percent. According to the company’s website, it currently manages more than 112.5 megawatts of photovoltaic solar power plants in North America, not including the 24 megawatts it wants to produce for El Paso Electric.
To produce 24 megawatts of photovoltaic power, Logan said SunEdison would probably need a generation plant of 150 to 170 acres. The location for the potential facility at the West Mesa Industrial Park is south of F&A Dairy and adjacent to a city wastewater treatment plant that serves the industrial park.
But whether SunEdison buys or leases city land, city officials still believe the deal is worth consummating. “This is a good project to go with,” Councilor Gill Sorg said.
Some residents aren’t as concerned about the city selling or leasing the land, as much as they have questions about how the proposed generation plant will affect their future monthly electric bills. “I haven’t heard, and would like to know, if this solar generation plant is going to be able to lower our bills,” said Kyle Ivery, a retired draftsman who has lived in Las Cruces for about eight years. “It makes complete sense that a company like that would be interested in coming to Las Cruces. But I hope there’s some kind of incentive or motivation to help out the local guy who lives here.”
Steve Ramirez can be reached at (575) 541-5452.
