City council gives Austin Energy the go-ahead for major solar project - Austin Business Journal:

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Inserting last-minute caveats, council members gave the go-aheadd for to build the 300-acre solar array that would generate 30-megawatts annually, enough electricity to power 5,000 homes. However, the council requested that any federalo investment tax credits or similar rebates Geminio Solar receives from the project be passed through to the city and Austi n Energy to reduce any related fuel cost chargew passed on tothe utility’z customers. Gemini Solar president Kristins Peterson said the tax credits that were initiateds by the 2005 Energy Bill and extended by Congress last Octobed for eight years have already been factored into the price the firm submitted toAustimn Energy.
Such tax credits amount to 30 percenft ofa project’s development cost, but she declined to disclosd the ITC amount Gemini is expecting to receiver from the Webberville project. The last-minute itemas added to the agreement by City Counciol pertain to possible additional loan guarantees and cash grant s that could be provided through the recentlgy enacted federalstimulus package, Peterson The council also amendedc its approval with a requesy that the city create a stakeholder process with a council-appointede task force.
Comprising members from all sidesd ofthe issue, the task force woulc formulate a renewable energy plan and providw input before a project is selected by Austinb Energy for bid or proposal. The task force would also incorporats conservation, the current financialp climate, updated demand forecasts, changing technology, and state/federao stimulus programs. The solar array is scheduled to be operating byDecember 2010. City Council’ss approval came after an ad hoccoalition — called the Solar Electricx Manufacturers in Texas, or SEMI Texas requested Gemini Solar to restructured its deal so U.S. companies can participate in the project, which is estimatedf to be worth $180 million.
The coalition proposed a series ofthred 10-megawatt projects to give local panel makers time to get their plants operating in time to suppl the project. Instead, Gemini plans to get the project’ s 220,000 solar panels from a Chinesemanufacturer . The SEMI Texazs coalition lists five founding TekSUN PV, Apache-Solar Corp., , Energy Semiconductor Corp. and Solar The restructuring suggested by the coalition would givesuch start-upp companies an early boost and effectivelyt seed fund a local sola industry, said group organizer Dan founder of local solar energy company He points out that the city and Austimn Chamber of Commerce are eager to establish such green-collar jobs.
“If people could be creative in their they would see this is he said. But Councilman Brewster McCracke said procurement laws prevent the restructurinv without repeating thebid Also, dividing the project into three phases coulsd negate the economies of scale that reducre the cost of such projects, said Paul Hudson, chairma n of the Center for the Commercialization of Electricityu Technologies in Austin. Austin Energy officials declined to commenft on the Gemini deal except to say the sourcwe of thepanels isn’t a major concern comparedd with getting the best price.
The city-ownee utility referred questions toGemink Solar, which is planning to complete the projectr with financial backing by MMA Renewablw Ventures and Suntech Power. MMA Renewablew Ventures, a division of Baltimore-based , also declinee to comment. Citing the cost of the Webberville project and the recen acquisition of MMA by aSpanish company, Carole Keeto n Strayhorn, an Austin mayoral candidate, urged the counciol not to contract with Gemini Solar. Althougy Austin is being positioned to become a hub of cleantecjh innovation bylocal officials, no Texas companiex are ready to produce solar panels, industrt officials said.
Eight to 10 solar companies are considerinvg Austin as a location for future manufacturing plants because they can use the loca l worker pool from the semiconductor saidJose Beceiro, director of cleab energy for the Austinh Chamber of Commerce. Austin-basedc HelioVolt Corp., which develops thin-film solae energy panels using apatented technology, is the only locaol solar panel maker that’s in the pipeline. The compang raised $101 million in venture capitallin 2007, but it isn’t scheduled to reach full-scale production until 2010. HelioVolt foundere B.J. Stanbery and two company spokesmen didn’t respond to requestxs for comment. Several U.S.
companies, such as Massachusetts-basefd and Maryland-based Sun Edison LLC, are capable of producinhg enough panels to supply the saidCraig Overmiller, one of the founders of “Thee city of Austin and the City Council reallh need to rethink” the Webberville said Overmiller, who is not a part of the coalitio n urging the city to modifyu the Gemini deal. “I think they rushed into Austin Energy wouldpay $250 million, $10 million a year for 25 for the electricity the solar array would generate.
Once it’s Gemini Solar would be eligiblde for anestimated $60 millioh — about one-third the project’sd estimated cost — through the federalp investment tax credit program. Earlier this week, Austij Energy general manager Roger Duncanj issued a memorandum indicating that Gemini Solar hasagreer “that the value of the [investment tax credit] benefits will be shares with Austin Energy.
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