El Paso Electric (EPE) on April 20 petitioned the Public Utility Commission of Texas to amend a Certificate of Convenience and Necessity (CCN) to include a 20-MW solar project to be located on Fort Bliss in Texas, on land that Fort Bliss will provide to EPE at no monetary cost.
“The Project will contribute to EPE’s strategy to diversify its fuel/energy sources,” the company told the commission. “The Project will also advance the Army’s national security goal of deriving energy from renewable resources on the Army’s land. Fort Bliss is not only far and away EPE’s largest customer but also plays a critical role in the region’s economy. The Project was selected through a competitive bidding process. The Project will be eligible for important federal tax benefits so long as it is completed before the end of 2016. To meet that timing imperative, EPE respectfully requests an order granting EPE’s request no later than November 30, 2015.”
This is a 20 MW ground-mounted solar photovoltaic system. Fort Bliss has agreed to provide a 218-acre easement at no monetary cost to EPE. The project will be a single-axis tracking system, which allows the photovoltaic panels to rotate around one axis to follow the sun as it moves across the sky over the course of a day. The Project will be interconnected to EPE’s wires system, but no CCN authorization is required for the interconnection facilities. The Project is expected to generate 59,983 MWh in the first full year of operation. This represents approximately a 34% first year capacity factor.
In August 2014, EPE issued a Request for Proposals (RFP) for solar resources. The RFP sought a turnkey solar project to be built on a 218-acre land easement at Fort Bliss provided by the Army. EPE received 11 proposals. EPE, with the assistance of Wayne Oliver as the independent evaluator, analyzed the bids and ultimately ranked them. Negotiations with the highest-ranked bidder “broke down.” the company said. EPE has successfully negotiated a contract with the next highest ranked bidder, SunPower.
“There is a distinct cost advantage to building the facility now, so that it is completed before 2017,” said the application. “If completed before then, the Project will be eligible for the 30% federal Income Tax Credit (‘ITC’). Under current law, the ITC will revert to 10% after December 2016. Therefore, in order to be certain to claim the 30% ITC, completion before January 2017 is prudent and necessary. EPE’s customers will benefit by the higher ITC amount. The estimated cash capital cost for the Project is approximately $42.1 million. This amount represents only the cost that EPE will pay to SunPower. In addition, allowance for funds used during construction are estimated to be $1.6 million, and interconnection costs are estimated to be $3.0 million. The $46.7 million is also not reduced by the 30% ITC.”
James A. Schichtl, employed by El Paso Electric as Director-Regulatory Affairs, testified about this project and the general desire for solar power: “Local governments within EPE’s service territory, notably the City of El Paso, have consistently expressed a desire for expanded use of solar generation resources. EPE constructed several small solar facilities throughout the area, and EPE has expanded access to renewable resources for its customers through purchase power agreements for, cumulatively, over 100 MW to date. Over 2,000 EPE customers access distributed renewable generation through rooftop solar and net energy metering, and EPE has received positive feedback from customers in advance of proposals the Company plans to make to establish Community Solar programs in Texas and New Mexico. Solar radiation is an abundant resource in EPE’s service territory, and additional system resources are clearly an accommodation and convenience for EPE customers generally.”