St. Albert city council voted on Monday to proceed with the detailed design of a solar farm that would both supply power to the commercial grid and offset consumption at the city’s own facilities.
Administration will bring forward a detailed cost-analysis of three solar-farm options, as well as alternate options including commercial, residential, and industrial development, this July, said Regan Lefebvre, the city's senior manager of utilities — a first for the city in the course of its examination of a solar-farm project.
A remediation study looking at what it would cost to decontaminate the Badger Lands, which were formerly used as a snow dump, will be part of that analysis.
A hybrid commercial and municipal own-use generation (MOUG) solar farm was one of three options presented to city council in an update from administration. While the city will continue to explore all three options in an upcoming detailed financial analysis — with council set to approve one or none of those options in July — focusing on one option’s design will help cut down on costs, said Lefebvre.
Council approved a project charter for a $26.1-million solar farm project in June 2021, to be funded through a borrowing bylaw. Later in August, council postponed passing the borrowing bylaw after hearing resident concerns about the project’s ability to generate revenue, voting instead to pull $200,000 from city reserves to conduct pre-construction work, a remediation study, and enhanced public engagement.
The first option, a commercial solar farm, is projected to produce 20,393 megawatt-hours (MWh) in its first full year of production, enough to power about 2,832 homes, according to Lefebvre, which he based on a consumption of 600 KWh/month per household, equivalent to 7.2 MWh/year.
Lefebvre noted that a municipally-owned commercial solar farm would mean a “number of different rules” would come into play to ensure the city complies with the provincial electrical utilities act.
For example, because municipalities are exempt from paying provincial and federal taxes, the city would have to pay a Balancing Pool Payment (BPP) to the Alberta Electric System Operator (AESO) to level the playing field with private power generators.
Municipal Energy Corporation
Lefebvre also noted that while a municipal corporation is not explicitly required for a commercial solar farm, the city would need separate accounting to prove that the farm is not being subsidized by the city through exemptions — for example being exempt from municipal taxes — and calculate the taxes it would pay.
For this reason, Lefebvre said a municipal energy corporation (MEC) would be useful, but noted this could be “less cumbersome” than the previous, large-scale MEC that council received a feasibility report for in June of 2021.
“We do not expect that a dedicated board is required, nor do we expect dedicated employees are required,” Lefebvre said.
The second option looked at a municipal own-use generation solar farm, where the generated electricity would offset the power used at the city’s own facilities.
For this option, the city would have to demonstrate that 100 per cent of the electricity produced is also being consumed, Lefebvre said, meaning the project would be much smaller than what’s currently proposed — only a third of the size of the commercial farm.
Lefebvre said one advantage of this approach is legislation would not require the city to pay a Balancing Pool Payment as it would with the commercial solar farm. Also, the city would not be required to demonstrate that the solar farm isn’t being subsidized, meaning an MEC would be less important.
Combining both the first and second options, the hybrid commercial and MOUG solar farm would use two-thirds of the city-owned Badger Lands site for commercial generation, and the remainder to offset the city’s own power.
“It’s expected to have the same economies of scale as the commercial solar farm,” Lefebvre said of the hybrid, adding the project would also be more innovative, therefore boosting its eligibility for grant applications.
He noted that it’s not clear whether Fortis, an electric and gas utility holding company, would require two grid connections for this model. Lefebvre said a second connection would increase the total cost of the project by $800,000. Putting in one application for the hybrid solar farm will help the city seek clarity on the potential added cost, Lefebvre said.
For this reason and others, Lefebvre said administration recommends the city proceed with detailed design of the hybrid solar farm.
"It's much easier to remove things that have been designed from the project than it is to add scope to the project at a later date," Lefebvre said.
For example, the application fees with Fortis would increase by around $200,000 should the city explore an additional option at a later stage, instead of exploring both options simultaneously through the hybrid model.
In terms of the rate of return for all three projects, Lefebvre said it is “still too close to call” which would be best.
“If one of them was an obvious front runner, then that would be the recommendation for today,” Lefebvre said.
Killick favours focus on MOUG option
Coun. Mike Killick put forward a motion to focus on the design of the municipal own-use generation solar farm, instead of the hybrid farm, arguing it would set the city up for success by avoiding “analysis paralysis” with too many options.
Some examples of the MOUG project’s benefits Killick listed include cutting down on administrative time, the potential to get the solar farm up and running sooner, and the city’s proven success with solar panels on top of the Campbell Park bus depot and Servus Credit Union Place.
“It could cost us a little bit more later on to add to it, but in project management history, keeping it simple is the key to success,” Killick said.
Coun. Ken MacKay said Killick’s motion seemed “premature” to him.
“I don't want us to narrow down our scope just yet when we have a more complete picture arriving in July,” MacKay said, referring to when administration is set to bring back the in-depth cost analysis.
Killick’s motion failed 4-3, with Coun. Shelley Biermanski, Coun. Sheena Hughes, and Killick in favour.
Coun. Wes Brodhead put forward administration’s recommended motion to focus on the detailed design of the hybrid commercial and municipal own-use generation solar farm.
“We need to hear all the information so we can make an informed decision,” Brodhead said. “If we don’t answer those questions, they’ll always be hanging out there.”
Mayor Cathy Heron spoke in support of pursuing the design of the hybrid solar farm, noting she would like to see the city put out an expression of interest to see if a company such as ATCO or Enmax would be interested in partnering with the city, and to bring back the results at the same time as the cost analysis.
“If you’ve got … somebody who’s in the business willing to share the risk and the revenue of this project, it kind of makes it seem more worthwhile,” Heron said. “If we can’t find anyone maybe it’s not worthwhile … but that’s only available if you do the commercial piece of it.”
Hughes also spoke in favour of the motion.
“Unless we get that information, we’re not going to have this come to a close, and it will be a ‘what if’ situation,” Hughes said.
The motion for administration to focus on detailed design of the hybrid solar farm passed 5-2, with Biermanski and Killick opposed.
