Turning Open Plant Property Into Renewable Energy on the Cheap

A New Mexico town arranges to receive a major supply of renewable energy with no upfront investment and no responsibility for system operations.
Turning Open Plant Property Into Renewable Energy on the Cheap
The solar power system is located next to the treatment plant and was built under a power purchase agreement.

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The solar power system at the Silver City Wastewater Treatment Plant is not exactly what town officials first envisioned. For one thing, it’s a lot less complicated.

A private company, Affordable Solar, owns and operates the solar panels, produces the electricity and connects to the Power New Mexico grid. The town is just a customer with an agreement to purchase the power generated. “Our only responsibility now is to purchase power,” says Alex Brown, town manager. The town buys the power at what Brown considers a favorable rate that is locked in for 20 years.

The treatment plant, with a design capacity of 3.2 mgd and an average daily flow of 1.4 mgd, serves a population of about 11,500. It uses an activated sludge process and UV disinfection. The plant’s electric bill used to be $280,000 a year. In the first year of solar array operation, the bill dropped 27 percent, to $204,000. Considering expected price increases, the town expects to save $2 million to $4 million on electricity during the 20-year agreement.

Stimulus funding

The town assisted in financing the project by issuing industrial revenue bonds, but basically the savings come with no investment by Silver City in new infrastructure or new equipment. The story began during the Obama administration with the government stimulus program known as the American Recovery and Reinvestment Act, or ARRA. The town got a grant, with Grant County, to open an Office of Sustainability that’s tasked with finding ways to save money on energy.

The ARRA was passed in February 2009, and the Silver City Office of Sustainability was founded in May 2010. One of its first projects was weatherizing homes; eventually, more than 700 homes were made more energy efficient. Another early program was changing the lighting in various government buildings.

Before long, the office identified the wastewater treatment plant and the water system as targets for energy conservation. “We ended up looking at the wastewater treatment plant because it had larger consumption throughout the day,” Brown says. “We identified it as an opportunity for a solar array to replace the power that was used during the day.”

Wise negotiation

The town put out a request for proposals and was working toward purchasing a solar array. As part of that process, it applied to Power New Mexico for a Renewable Energy Credit, or REC. Because Silver City was among the first to apply, it got a favorable REC of 12 cents per kWh sold to the utility.

Silver City was on the path toward buying and operating a solar array and was negotiating with a large energy company when town officials saw an opportunity to accomplish the same goal in a different way. Legislation passed by the state in 2011 enabled the town to enter into a power purchase agreement, or PPA, with a third party that would own and operate the solar array.

“We realized that it would be a lot cheaper for the town and the private entity if we went into an agreement where the company actually purchased, built and operated the solar array and we would just buy the power we needed from them during the day,” Brown says.

The negotiations took about three years. Eventually, the company that Silver City first worked with to build the solar array dropped out, but Affordable Solar, which had been a subcontractor, stepped in and agreed to design, build, own and operate the solar plant. The array, occupying 6 acres next to the treatment plant, is rated at 1.14 MW and contains 4,675 solar panels. The PPA was a first for Affordable Solar, but the company has since entered into other similar agreements.

More to come

The success of the solar project has the Office of Sustainability looking at other applications for solar power. It has already put a 7.6 kW solar array on the roof of the carport of the visitor center. The Silver City Sustainability Plan 2030 lists more renewable energy production projects, which include adding more solar power to municipal buildings.
The wastewater plant is also involved in a long-term project for a regional water system.

Robert Esqueda, utilities director, says the plant’s effluent is used for irrigation by a local landowner and the municipal golf course. The rest travels down an arroyo until it is absorbed into the ground.

“We did a project where we demonstrated that the water is actually making it back into the aquifer,” Esqueda says. That enabled the town to get recharge credits, which conveyed rights to pump more water out of the aquifer. The town has applied to use the recharge credits near the Grant County Airport to help support a planned regional water system.


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