The Los Angeles City Council delayed voting Friday, Nov 16, on whether to approve a $1.6 billion solar power purchase agreement that could help the city meet renewable-energy targets but could also trigger future rate increases.
The ordinance to enact the agreement was not ready for the Council’s approval. The panel will decide on Tuesday whether to finalize a 25-year agreement for the Department of Water and Power to purchase electricity from a massive solar panel farm nearing construction on the Moapa Indian Reservation about 30 miles north of Las Vegas.
The agreement with K Road Moapa Solar, LLC, would allow the city to purchase enough solar energy — between 225 and 250 megawatts — to power about 113,000 homes and boost its renewable energy portfolio by nearly 3 percent.
State mandates require LADWP, the nation’s largest publicly owned utility, to generate 25 percent of its power from renewable sources by 2016 and 33 percent by 2020. The department at one time exceeded the 20-percent mark, but it now gets about 17.8 percent of its power from wind, solar and other renewable sources, according to a report by the City Administrative Officer. As part of the agreement, LADWP would have an option to purchase the solar energy farm at various stages beginning in 2026 for a starting price estimated at between $339 million and $398 million.
The Council’s approval would authorize LADWP to build an $18 million, 5.5-mile transmission line on federal land to get the solar-generated electricity to the city.
If the project is approved and starts to come online in 2016, it is expected to add an additional 80 cents per month to the average residential customer’s bill. The City Council last month approved two years of rate hikes totaling 11.1 percent, or about $3.65 per month, for residential customers and $15 for small commercial customers.
An estimated 910,000 solar panels would be built on the 2,500-acre site on tribal land.
The Moapa Reservation is on a migratory path for the endangered desert tortoise. The DWP describes that as an “environmental risk.” The push to protect the desert tortoise has caused delays to other efforts to build solar projects in the desert. For example, the U.S. Bureau of Land Management last year halted a massive solar power project in the Mojave Desert over disputes
about the potential negative effects on the tortoise population.
The project has support from the city’s Ratepayer Advocate, Fred Pickel, who said the agreement guarantees the city a price for solar energy that is about half what it has been in other large-scale solar projects in the last five years.
“We’re under a legal obligation to move forward. The timeline to develop these things is such that we have to move forward now,” Pickel said.
“This is very attractively priced and much cheaper than some of the earlier projects.”
Pickel, however, urged state and local lawmakers to begin a wider discussion about reducing the state renewable-energy targets, given the steep decline in the cost of natural gas. That cost has plummeted to nearly a quarter of what it was in 2008 during a frenzy over setting the renewable targets.
Councilman Jose Huizar, who chairs the council’s Energy and Environment Committee, applauded the Moapa Solar project when it was approved by the Board of Water and Power Commissioners last month.
Through projects like this, the Department of Water and Power is on track to reduce its reliance on coal power and increase its supply of solar and other renewable energy,” Huizar said at the time.
All Angelenos should take pride in knowing we are rebuilding our power system into a cleaner, greener and environmentally sustainable model.”
The agreement also has the support of Mayor Antonio Villaraigosa, who called the K Road Project and another proposed solar power purchase agreement “a defining moment for the city’s economic and environmental future.”