The Monticello School Board listened to an energy savings proposition last week that was self-deemed a “win, win, win.”
The school board invited Jamie Borrell, Chief Operating Officer of Innovative Power Systems, in to present at the Aug. 7 board meeting. Borrell presented Monticello with an opportunity to invest in a solar garden, an investment he told the board could save the district more than five millions dollars during the next 25 years.
Borrell met with Superintendent Jim Johnson, Finance Director Tina Burkholder, and others a few months back, and the presentation went well enough that they decided to bring him back to present to the board. What Borrell and Innovative Power Systems is pitching to Monticello, is a chance to buy into a solar community garden for six million kilowatts of energy during the next 25 years. The benefits are many, according to Borrell – highlighted by clean energy and big savings for the district. Monticello would have the option of subscribing to a number of different IPS solar gardens, provided they are located in either Wright County or a county that borders Wright County.
For every kilowatt of power that is produced, a 12.3 cent credit goes to the subscriber in this community solar gardens plan. The subscriber then turns around and pays an 11.3 cent credit to the garden owner/operator, leaving a one penny differential for the subscriber for every kilowatt produced. That adds up quickly.
Borrell estimated the district would save in the ballpark of $60,000 during the first year of its subscription, $100,000 by the fifth year, and $400,000 by Year 25.
The estimated increase in money made annually is based off an escalating bill credit. Borrell estimates the credit to go up 2.75 percent annually, which he told the board is on the low side. Borrell said the national government tends to estimate a three percent increase. If the bill credit went up only one percent annually, the savings for subscribers would be less than what Innovative Power Systems is currently predicting.
“I’m using 2.75 percent because I want to be conservative in what I’m saying the bill credit is going to go up by,” said Borrell, adding they want to under promise and over deliver.
The other biggest benefits for the district would be that there is no cost up-front, and it is cash-flow positive. The only time they need to pay money out is after they’ve received their credit at the end of the year, and they pay ninety plus percent of that to the garden owner/operator.
“The question I usually get right now is this sounds too good to be true, there’s no way this can be legal,” said Borrell. “I assure you this is exactly legitimate.”
Innovative Power Systems has several partners in the venture, including Xcel Energy. Customers must be Xcel Energy customers to subscribe with the community solar gardens plan. They also partner with WGL Energy, and New Energy Equity.
They have more than two dozen schools that currently subscribe to the solar gardens, including the University of Minnesota, Red Wing School District, Waconia School District, and Annandale School District.
“Most of the subscribers that we have for our solar gardens are school districts, actually. It’s been a great partnership for us,” said Borrell. “WGL wants to make sure the people that they’re billing are going to be around for a long time, so school districts are just a natural fit.”
To make it an even better fit, Borrell said they develop free curriculum for schools to use, relating to solar energy and the community gardens.
Borrell and Johnson both pointed out that a number of businesses offering a subscription service similar to this have come and gone in recent years. Innovative Power Systems prides itself on its longevity, having been around for more than 25 years and planning on many more.
“We’ve been around for 25 years,” said Borrell. “We’re going to build the garden, we’re going to be around for another 25 years to maintain and operate the garden. And to make sure it’s going to produce what we say it’s going to produce and our subscribers are going to save what we say they’re going to save.”
Borrell told the board that there were almost no real downsides to becoming a subscriber.
“The risk is somebody invents a cold fusion box that can sit on this table that provides enough electricity for the entire town of Monticello and gives it away for free,” said Borrell.
Following Borrell’s pitch, Johnson, in his last meeting as district superintendent, explained why they decided to bring Borrell in for a presentation, and why he thought the district should consider this partnership going forward.
“We’ve seen a number of people come in over the last three to five years with different presentations, and as you said, many of those companies are no longer in business,” said Johnson. “You have to be able to have something that’s sustainable.”
Johnson said that three things really stood out to him about Innovative Power System, including the Xcel connection.
“Xcel has been around for a long time, they’ve been a great community partner for us as a school district,” said Johnson, adding that the idea that IPS has been in business for 25 years is a second strong point. “Then when you take a look at the savings piece. When I take a look at 60,000 dollars, that’s a teacher. That’s kind of how I equate that, when going back to the classroom and how does this help us out.”
The item was a non-action item at the Aug. 7 meeting. Johnson told the board he wanted to present them with the information, and that this will now go to the budget committee, who will decide if it is something Monticello should move forward with. If they decide it is, it could come back to the school board in September as an action item.
Contact Clay Sawatzke at [email protected]