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An agreement to purchase solar-generated electricity for the Lansing schools will not save as much money as originally hoped, and may not come to be at all.  A 20 year agreement that was anticipated to represent over a million dollars in savings may end up being a 25 year agreement saving the district less than half of that.  But a snag in negotiations may mean the end of what would have been a groundbreaking solar project.

"Suddenly we were starting to hear that they wanted to change other terms of the power purchase agreement," School Business Administrator Mary June King told the Board of Education almost two weeks ago.   "At that point our attorneys were saying this is probably a no.  I wouldn't have recommended it to the Board with those changes, because things like the non-appropriations clause, which we feel strongly we should have according to the law, things like that."

But King said the contract isn't dead, due in part to a good working relationship with RER Energy Group, the company that will own and operate the 1.5MW solar array.  She said that RER President Jim Kurtz is anxious to finalize an agreement, and has obtained Block 2 NYSERTA grant that will lock in lower project costs.  She also noted that a 'remote net metering' subsidy will still apply to the Lansing project, because it is being grandfathered into last year's NYS Public Service Commission's (PSC) action to close a loophole that some companies were exploiting.

The solar array, reportedly to be located on Hardie Farm, was expected to generate 1,712,542 kWh in its first year, saving the school district $1,055,067 over the course of a 20 year contract.  Under the new terms it will save $478,119 over 25 years.  It was hoped that the project, which Kurtz said would be 'a model of environmental progressiveness in the region,' could be started this summer.  But before it can begin the new terms would have to be approved by the school board.

RER says the difference is the result of new state regulations that have made it more difficult and costly to build solar projects in New York.  If the project is completed RER will own the array, and the only involvement by the school district will be as an electricity customer.  King said that RER is using a new finance group, and Kurtz would either resolve the issues with them or shop for another group.  She indicated that the change in dollar figures is probably acceptable, but changes in other clauses of the contract are so unacceptable that she would not even recommend it to the school board for approval.

RER says project costs have escalated by a total of $302,000 due to higher interconnection upgrades charged by the utilities, construction of a new dedicated road at a cost of $32,000 because of the location of the solar array, and a grant reduction of $90,000 because the project fell in the second round of NYSERDA funding, rather than the first, for which there was more money available.   The company says that higher demand for construction work in the state has also impacted the project, raising the cost by an estimated $60,000.

A similar power purchase agreement fell through a few years ago.  But King was cautiously optimistic that an agreement may be reached.

"I think we're in good hands," she told the Board.  "I think we're doing a great job of staying in front of it.  The president of this company has continued to step up to the plate to say 'I hear you.  I understand this, and we're going to hold true to the principals that we initially agreed to.'  Hopefully it will still work.  It's still a question mark as to whether we can make it happen."

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