Warren County Report

April 16, 2010

$100 Grand down the drain -- town nixed solar RFP's

Is RFP pull back the first step in bailing out of any solar power project?

By Roger Bianchini

I really hate to say I told you so-but I told you so.

In a stunning move at its April 12th meeting the Front Royal Town Council unanimously voted to reject all proposals received in its RFP process on a solar power project here.  That Request for Proposals process was launched last December through consultant GDS Associates Incorporated at a cost to the town of $100,000.

The reason given in a Resolution of rejection is stated as "the price of the electricity identified in each one of the proposals."

Asked to elaborate on that reason, both the maker of the motion, Tom Conkey, and Mayor Eugene Tewalt said there were, "too many unknown variables related to prices."

Those prices in top-rated RFP applicant Standard Energy's proposals ranged from $92.67 per megawatt hour in a purchase from a private entity arrangement to $177.48 per megawatt hour in a design-build scenario.  Our understanding of the consultant's summary was that these were peak hour prices and competitive with more traditional power sources in that context.

At a March 15 work session GDS Project Manager Garrett Cole reviewed 39RFP submissions and placed the company that originally brought a solar project proposal to the town at the top of its list of submissions in either a Purchase Power Agreement ( PPA) or Design-Build context.  The PPA was favored due to lower prices tied to the availability of Renewable Energy Credits (REC's) available to the private sector only.

While Cole told the town that Standard Energy, formerly SolAVerde, had the best RFP in both categories he also suggested the town take a wait and see attitude.  The reason was Standard's discussion outside the RFP process with the town's municipal energy cooperative, AMP-Ohio.  Essentially Cole told the town that a private sector arrangement between Standard and the AMP municipal network, leaving the town as the source community in a solar project with the option to purchase as much power as it saw fit, appeared to be the best, least risky and costly fit for the town.

But two weeks earlier sparks flew at a March 1st work session when Town Manager Michael Graham, filling in for Waltz, informed council a potential AMP Standard Energy proposal might be forthcoming in the wake of an upcoming AMP Ohio Board of Directors meeting.  At that point both Carson Lauder and Chris Holloway objected to private sector talks unrelated to the RFP process council had committed $100,000 to.

However both Vice Mayor Bret Hrbek and Shae Parker defended private sector discussions between AMP and Standard Energy.

"We had a company come to us looking to invest, [and] looking at us as an investor and we said well, before we invest with you let's see if we can build the same thing -- trying to undercut that company- cheaper ... And we got the idea from them in the first place,"  Parker said on March 15 adding, "It wouldn't stop us if we like one of these RFP's from another company to find our own land and go build it on our own.  But we can't stop another company from doing business."

At the March 15 work session Lauder and Holloway suggested holding a potential private sector AMP business proposal to the same 30-day timeframe included in the RFP process.  However Cole suggested caution along those lines.

"You do want to maintain a sense of equity but not limit you options," Cole said in suggesting leeway in seeing what might be offered in the wake of Standard Energy-AMP discussions under way since December.  "I would suggest you hold off on any action until you hear what AMP has to offer," Cole told council.

When Vice Mayor Bret Hrbek suggested notifying the other 36 applicants they had been eliminated, Cole again suggested caution before any action prior to input from AMP on potential involvement.  It appeared that latter recommendation was based on the outside chance AMP might elect to become involved with a solar partner other than S6tandard Energy.

At that March 15 work session RFP presentation Town Director of Energy Resources Joe Waltz, the town's representative on the AMP Board of Directors, said he had been told by AMP's CEO that the municipal, non-profit cooperative was poised to bring a 300 megawatt solar proposal to its membership with Front Royal likely to be cited as the source site.  Prior to being connected to Standard Energy through Front Royal town staff, AMP had been discussing a solar field with Danville, Virginia officials.  But with AMP shifting its focus toward Front Royal after three months of discussion with Standard Energy, the short odds would appear to be pointing Standard's way.

So what could possibly be going wrong?

To quote from our March 19 edition story-- "It now appears the anticipated AMP proposal and the solar RFP process have verged into one preferred option- and sometime between March 17, and now it appears mid April, all the solar cards may finally be on the table with the Town of Front Royal sitting in the "catbirds" seat ... unless of course some nefarious, clandestine opposition to anything environmentally sound, potentially profitable, or new in concept rears it ugly head in the intervening month to try and sabotage the project- naw, not here in River City, never happen... would it?"

Like I said, I told you so.