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Calif. agency inks solar deal for $39/MWh

Four Northern California cities and the Port of Oakland are on the brink of securing solar power from a 17-MW solar photovoltaic project in Los Angeles County at a fixed rate of $39/MWh over 20 years, in one of the lowest-priced U.S. solar power purchase agreements signed to date.

Negotiated by the Northern California Power Agency on behalf of its member cities Biggs, Gridley, Healdsburg and Lodi, and the Port of Oakland, the contract with Sustainable Power Group LLC, or sPower, calls for the developer to begin delivering power by 2021. The low-priced PV generation will help the public utilities meet their targets of reaching 50% renewable energy by 2030, as required by state law.

To become final, Gridley's city council must still approve the deal, which the NCPA and sPower signed in February. The other four NCPA members approved separate resolutions in March. "I expect the city council to vote on it in the next month or so," said Gridley's city manager, Paul Eckert.

"This price is among the lowest prices staff has ever seen for a renewable energy contract and is competitive with non-renewable energy prices in the wholesale market," according to a March 23 Port of Oakland report issued ahead of a vote approving the contract. "Due to the lower cost of the PPA, staff believes there is a low probability that renewable prices will drop below the contract price, even considering the contract will not begin delivering for 4 years from now," it said, adding that an NCPA request for proposals just two years ago yielded bids for PV "ranging from the high $40's to high $60's per megawatt-hour."

Pending ratification by Gridley's city council, the Port of Oakland, a municipal utility supplying power to the Oakland International Airport, will purchase output from 4 MW of sPower's Antelope Solar Expansion 1B project in Lancaster, Calif. Lodi will purchase power from a 10-MW share, Healdsburg will purchase output from 2 MW, and Gridley and Biggs will split 1 MW.

"This project helps illustrate the value our publicly owned electric utilities experience through joint action," said the NCPA's general manager, Randy Howard, in a statement. "They receive tremendous value by working together to achieve the economies of scale that make these types of cost-effective renewable energy opportunities possible."

AES Corp. and Alberta Investment Management Corp. on March 3 filed with federal regulators to acquire sPower. The company did not immediately respond to requests for comment on its contract with the NCPA.