October 6, 2010

By Tracy Idell Hamilton
San Antonio Express-News

CPS Energy today will announce a solar partnership with SunEdison that will result in three 10-megawatt installations being built in the utility’s service area, the Express-News has learned.

The three separate ground-mounted solar photovoltaic arrays are to in use by 2012, and CPS has agreed to buy all the power they generate for the next 25 years, the utility confirmed. Locations have not been determined.

Sources say CPS will pay 15 cents per kilowatt hour for the energy — less than the utility’s other major solar agreement for 14 megawatts from the Blue Wing Solar Farm in southeast Bexar County. That project, owned by Duke Energy, is in the testing phase and should be fully operational by year’s end.

A CPS spokeswoman would not confirm the price, but CEO Doyle Beneby called the deal a good one for the utility.

"The market for solar energy continues to improve, and this agreement takes advantage of that," he said.

The average cost to customers for all the power CPS produces — from coal, natural gas, nuclear and renewables — is about 9.5 cents per kilowatt hour.

SunEdison is the country’s largest solar energy services provider, managing more than 108 megawatts of solar power plants in the U.S. and Europe.

It was founded in 2003 by Jigar Shah, who has spoken at forums in San Antonio several times. Shah subsequently sold the company.

As part of its latest solar deal, CPS has asked the company to collaborate on research and development, likely with the newly formed Texas Sustainable Energy Research Institute. CPS has committed $50 million to Texas SERI over the next decade for research on issues facing the utility, such as carbon capture and energy storage.

An education center at one of the installations also is planned, along with a community outreach program.

The investment in local facilities and research "will provide a great energy and economic benefit to San Antonio," said Mayor Julián Castro, who sits on the utility’s board and has been a tireless proponent of bringing more clean energy investment to the city.

"It’s innovative, forward-thinking and helps put San Antonio further on the map in the new energy economy," Castro said.

The additional 30 megawatts essentially will replace the 27 megawatts CPS planned to buy from Tessera Solar, which recently was forced to delay its project for lack of funding. The solar thermal plant, which uses mirrors to concentrate the sun’s power, was to be built outside of Marfa.

When CPS signed a 20-year agreement to buy Tessera’s power in June 2009, it was the utility’s first purchase of solar energy, and the first step toward its goal of acquiring 100 megawatts of solar capacity.

That’s part of the utility’s effort to secure 1,500 megawatts of renewable energy capacity by 2020. CPS already has agreements in place for 850 megawatts of wind power, in West Texas and along the coast.

"We’re very excited about the presence of a major solar company and the size of the installation," said Lanny Sinkin, executive director of Solar San Antonio. "Their commitment to an energy center and additional research and development is very encouraging."

Beneby is bullish on CPS’ continued investment in solar energy, which also includes rebates for up to 50 percent of the cost of home solar systems.

"With 300 days of sunshine here each year," he said, "it just makes sense that San Antonio becomes a hub for solar energy in the U.S."