Plans renewable energy, power purchase agreement
THE Guam Department of Education is taking the next move toward adopting more renewable, sustainable and energy-efficient resources after spending millions of dollars every year to provide power for the schools and facilities under its jurisdiction.
After the enactment of Bill 74 into Public Law 32-95 in November 2013, the General Services Agency released a request for information for interested bidders who wish to enter into a power purchase agreement (PPA) for all GDOE schools, and administrative and ancillary buildings.
Speaker Judith Won Pat and Sens. Aline Yamashita and Tina Muña-Barnes introduced Bill 74, which allows the education department to enter into a renewable energy PPA for a term of up to 25 years.
Under the legislation, the qualified providers will be responsible for providing a power purchase agreement to cover no more than 80 percent of GDOE’s power needs.
Jon Fernandez, GDOE superintendent, said the department would like to see the installation of solar panels to take place during the coming school year.
“I think it's important that we pilot a few schools to see whether we are actually capturing the returns that we expect. If it works, then we can expand,” he said in a statement to Variety.
Fernandez said GDOE continues to work with GSA as they gather information to guide the process set forth under the public law. That same law, he said, also gave GDOE the opportunity to work directly with the leased schools.
The measure, he said, also authorizes the department to enter into PPAs without having to go through the normal procurement process required of GDOE directly-owned schools.
Fernandez said GDOE continues to work with the Guam Education Financing Foundation (GEFF) as to how to move forward with the energy solution for the schools. GEFF has partnered with the education department to design, build, finance and lease back Liguan and Adacao Elementary Schools as well as Astumbo Middle School.
In his testimony during the public hearing for then-Bill 74, Fernandez said the education department spent $14.46 million in fiscal 2012 alone for power.
He also said that despite the conscientious efforts made by GDOE to reduce power consumption, its power expenses continue to rise, citing the example of their consumption for the first half of fiscal 2013, which shows that despite a kilowatt-hour usage decrease by nearly 1.36 million kwh compared to the first half of fiscal 2012, GDOE’s power bill increased by nearly $174,000.
In the current budget request cycle, the Guam Education Board approved nearly $300 million for GDOE’S budget. Around $15 million of the amount was allocated for power.
“We know that, here on Guam, the military, private schools, private businesses, residences and the Catholic Church have already pushed ahead to use renewable energy to power their facilities,” he said.
“There's no reason GDOE shouldn't participate and make an effort, not only to lower our power costs, but to participate in more sustainable practices. I want us to be a more progressive organization. I want students to see us model what we teach in terms of renewable and alternative energy sources, aiding the environment, and being protective of our resources.”
William Hagen of Pacific Solar & Photovoltaics said the Guam Renewable Energy Association was present when Gov. Eddie Calvo signed P.L. 95-32 and was instrumental in its passage.
“GDOE has a $15 million annual power bill and if only 25 percent of that power can be produced through PPAs with private power producers, that could mean millions in investment and several years of good jobs in the photovoltaic industry,” he said.
Hagen cited the example of St. Francis School in Yoña. Pacific Solar & Photovoltaics installed a solar power system in 2012, and the system is owned by Pac Sol Generation LLC, a local company which sells the power to the school for 20 percent less than utility rates.
The system, he said, operates under a PPA consisting of 20- to 25-year agreements between a private power producer and a private power purchaser.
“The purchaser leases the roof to the producer and the producer installs a photovoltaic system on the purchaser's roof then sells the power produced to the purchaser. The purchaser gets to go green with cheaper power and no upfront cost. The producer gets a 30 percent tax credit, accelerated depreciation, and a return on investment in the 10 to 12 percent range on a system that at 25 years of age continues to produce power at 80 percent of its originally rated capacity,” Hagen said.
“It is this type of arrangement which P.L. 95-32 is proposing for Guam's public schools. These types of arrangements are very common in the U.S. mainland but have not totally taken hold on Guam yet. To date, Pacific Solar & Photovoltaics is the only company on Guam to have installed any nonmilitary systems under the PPA arrangement.”
PPAs, as private power producers, he said are not subject to the oversight of the Public Utilities Commission and can develop their own rate structure.
The private power producer does the design and engineering, gets the permits and Guam Power Authority authorization, and installs the system.
Plans renewable energy, power purchase agreement