Council OKs $20 million solar lease

Solar power juggernaut company SunPower's attempt to lease a portion of land to create a solar energy field in the Eldorado Valley has passed through City Council by a unanimous 5-0 vote.

The lease will generate $20 million for the city over its 20-year life. There also are provisions for two 20-year extensions.

The San Jose, Calif.-based company obtained the lease earlier this year from Korean Midland Power Co., which first negotiated for the parcel in 2011.

SunPower isn't new to Nevada, as it has been building smaller projects around the state since 2007, but this project would be mutually exclusive to Nevada, with NV Energy purchasing power produced at the plant. Past projects created energy for Californians.

The focus of the company, which has been around for more than 25 years, is to maximize power out of as little space as possible, according to Chris Baker of SunPower, which will install solar photovoltaic panels on the leased land.

"I think this is our first solar lease that were selling energy to Nevada," said Councilwoman Peggy Leavitt. "I think all of our previously leases, the energy has gone to California, so I find that exciting."

The plant will be SunPower's largest development in Nevada, according to company representative Andrew Hamilton. Hamilton says based on the company's projections, it will create more than 200 jobs during the course of the project.

Hamilton also states that SunPower is eco-friendly, using no pesticides or polluting methods to clean its solar panels. Instead, it acquired a robotics company that uses 90 percent less water to clean the panels.

The motion to move forward with approving the lease hit a stalemate early in the meeting when Hamilton showed a map depicting proposed addition to the original power plant.

According to SunPower's engineering team, the original layout had to be changed because a significant portion of the lease area was subject to flooding.

In the new version, SunPower's land lease would extend up the west side of U.S. Highway 95, taking over part of the dry lake bed in Eldorado Valley, which is used as a recreation area.

Instead of spending more on insulating the solar panels in that particular area, Hamilton suggested an acre-for-acre swap with a piece of orphan land that lies just west of the highway.

SunPower saw the most resistance from Councilmen Cam Walker and Duncan McCoy, who were worried about how far along the highway the land would run and for the safety of those using the dry lake bed.

"The way it was represented to me was a swap-for-swap next to the land, and now it's not next to it, it's all the way on the side of the highway," Walker said. "There's a lot of people that recreate down on the dry lake bed."

City Manager David Fraser told council that the lake bed, in fact, would not be compromised. While part of the lake bed on the west side will be used for the plant, the original land will actually create more space for recreation.

"There is a way to engineer your way around that," Fraser said. "It allows us to put those orphan land properties to use while actually freeing up more of the lake bed for recreational use on the other side."

There were also a few notations made by Fraser regarding the previous KOMIPO lease and SunPower's current one.

Under the old lease, KOMIPO's lease payment would escalate by .75 percent per year per acre. With SunPower, Boulder City will receive 25 percent more, with the rate moving up to 1 percent.

The cost of land per acre remains the same at $1,700, which is payable in quarterly payments and due in advance.

Phasing options were added into the new SunPower lease. The solar power plant operator will play the city $26,039 thousand on or before Dec. 31 of every year to hold the potential land options for the next five years. They would fall under the lease agreement after SunPower obtained power purchase agreements for the parcels.

The power purchase agreement for the initial lease of 541.77 acres is with NV Energy.

SunPower expects to break ground for the new solar plant in November, and its lease agreement runs through November 2035.

In other news, City Council appointments were made before the meeting adjourned.

The council voted to appoint members to the Golf Course Green Committee, Charter Commission, Civil Service Commission and the Clark County School District Technical Advisory Committee (as required by Assembly Bill 394).

Those appointed were:

Golf Course Green Committee: David Weir

Charter Commission: MaryAnn Wainwright (reappointed, 3-year term), Harold Begley (3-year term), Bret Runion (2-year term), Bob Giunta (1-year term).

Civil Service Commission: Michael Hughes (reappointed)

CCSD Technical Advisory Committee: Rich Shuman

Contact reporter Randy Faehnrich at rfaehnrich@bouldercityreview.com or at 702-586-9401. Follow him on Twitter @RandyFaehnrich.