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March 13, 2009

Extra savings from solar project brightens VMEU's future

By KRISTI FUNDERBURK
Staff Writer

VINELAND -- Officials from the city's electric utility and Conectiv Energy announced Thursday a change in the pricing terms for the solar panel project the groups announced last month.

The change means the utility will realize three times more savings than the original plan. The effect eventually will trickle down to ratepayers' bills, said Joseph Isabella, Vineland Municipal Electric Utility director.

"This is not an indication that what went before was a bad deal. This is just a better deal," he said.

Both the VMEU and Conectiv Energy proposed an initiative to build a 4-megawatt solar panel field at the Landis Sewerage Authority.

The initial cost savings totaled $100,000 per year, but because the solar technology and market are constantly changing, the original power purchase agreement City Council approved Feb. 24 allowed flexibility to adjust pricing due to changing laws and market conditions.

Under the new terms, the VMEU will save an average of $300,000 per year, or three-tenths of 1 percent on total rates, Isabella said. That's a 30-cent savings on a $100 electric bill for ratepayers.

"The savings for the solar will always cause a downward pressure on the rates," Isabella said.

Isabella explained the utility balances what it receives from ratepayers with what it pays for power. If the utility is paying $300,000 less for power, then it collects $300,000 less from customers.

VMEU collects $100 million from customers in an average year. Once the solar panels are operational, the utility will collect $99.7 million. Even if fuel costs increase, the utility always will have at least that three-tenths of 1 percent savings.

"The reason it's so small is it's not a great big project," Isabella said. "But this was done without the city making any investment."

Conectiv will foot the project cost, estimated at about $5,000 per kilowatt, or $20 to $24 million, to place two solar fields at the Landis Sewerage Authority.

The panels will cover no more than 14 acres, but the energy will be pumped into the VMEU's power grid to benefit all ratepayers.

The utility's total savings will be roughly $7.5 million in the 25-year lifespan of the solar panels, Isabella said.

The new adjustment is the result of Conectiv's plan to use a different type of technology for the panels, as well as a collaborative assessment of the solar market, Isabella said.

Conectiv spokeswoman M.Q. Riding said they now are looking at crystalline silicon, a new type of photovoltaic panels.

"Crystalline silicon is a technology that allows for higher efficiency so we can produce more energy in less space," she said, adding the technology isn't definite until a contract is awarded for the panels.