On the agenda for the Nov. 3 meeting of the Minnesota Public Utilities Commission is the question of whether to approve Minnesota Power’s compliance filing on the Camp Ripley solar project, including the initial cost recovery amount for its land lease and proposal to adjust its Fuel and Purchased Energy (FPE) and Solar Energy Adjustment (SEA) Riders.
On Feb. 24, the commission formally approved the recovery of the investments and expenditures for the Camp Ripley project. The investments and expenditures were approved subject to further adjustment after Minnesota Power filed an independent property appraisal for the leased land. The utility’s land lease with Camp Ripley includes total payment of $1.6 million over 35 years, or a net present value of $592,723, said an Oct. 25 briefing memo from commission staff.
Commissioners had unanimously approved the 10-MW installation, which will be built at the Minnesota National Guard’s base in central Minnesota on the southwestern edge of Minnesota Power’s service territory. The $30 million project will help Minnesota Power, a utility division of ALLETE Inc. (NYSE: ALE), achieve about one-third of its requirement under the state’s Solar Energy Standard.
Minnesota Power explained that when fully operational for Midcontinent ISO purposes (end of 2017) the project will add about 5 MW of accredited capacity per year to the utility’s power supply for solar-paying customers. Once qualified, the capacity can be sold through the MISO Planning Resource Auction.
Once the project operates through its first MISO peak season (June to August), it will qualify and be eligible for capacity sales and thus have a theoretical capacity value. The earliest this would occur is June 2018.
Based on MISO’s last capacity auction, the utility said this equates to about $36,000 per planning year for Camp Ripley’s 5 MW of capacity. The company explained that since there can be no positive market value of the solar capacity until June 2018, it continues to believe the best approach is to address the methodology of allocating the solar capacity valuation between solar-exempt and solar-paying customers in its next rate case.
Says the Minnesota Power website: “Minnesota Power and the Minnesota National Guard are building a major solar energy project at Camp Ripley, a regional training facility for the Guard near Little Falls, Minn. The 10-megawatt array will be the largest solar energy installation on military property in the state and the largest at any National Guard base in the country. It will be among Minnesota’s largest single-site solar arrays. The solar project will cover nearly 80 acres of underutilized government property at Camp Ripley with photovoltaic panels on racks. Projected to cost $30 million, the project is expected to be completed by November.”