LOWER ELECTRIC BILLS FOR BARTOW
No, that reduction in the rate for electricity that appears in your latest utility bill is not an illusion. Nearly all Bartow utility customers, both residential and commercial, will see a reduction of at least 9.5% in the amount billed for electricity under the new rate schedule that was recently adopted by the City Commission. “It’s for real, and the reduction is not expected to be the last one” according to Bartow City Manager George Long.
Events leading to this welcome news actually date back to 2010 when the City solicited bids for the wholesale purchase of electricity. That effort resulted in termination of a 53-year relationship with the former generator and negotiation of a new contract with Orlando Utilities Commission (OUC), the lowest cost bidder, that became effective on January 1, 2011.
The OUC contract differed from traditional utility contracts in two important ways. First, it provided for wholesale purchase of electricity for a relatively short 7-year period as opposed to a more typical duration of one or more decades. The shorter term purposefully limited the period during which both the City and its customers could be “locked into” higher costs than could be justified by fuel market conditions. Second, it provided the City with the latitude to purchase up to 10% of the community’s electricity from a renewable energy generator. If achieved on a long-term reasonable fixed-rate basis, without debt or capital expense to the City, this initiative would serve as a hedge against rising electricity costs in the future and result in a cost savings to Bartow electric customers.
The OUC contract also made it possible for the City to implement a 2-9% electric rate reduction later that year for the first time in its history, despite the still-evolving impacts resulting from the Economic Crash. Unfortunately, those same impacts delayed immediate pursuit of the solar initiative.
By 2016, economic conditions had noticeably improved. The cost of traditional fuels used to generate most electricity had declined significantly, were still dropping and Bartow was in the sixth year of its OUC contract. Concurrently, an excess supply of solar panels had developed in the market, reducing the cost to construct solar projects as well as reducing the cost of solar-generated electricity.
At that point, the City solicited proposals to construct, operate and maintain a solar electricity generating facility to provide approximately 5-7% of the community’s total annual electricity demand. NovaSol Energy was selected to develop the project, at its expense, following evaluation of eleven (11) proposals that were submitted.
NOVASOL FUNDS ROOFTOP ARRAY FOR CITY HALL
The City will be NovaSol’s only customer. The project has been developed on a 40-acre parcel on Gaskins Road which has been deeded to the City. In addition, NovaSol has funded and installed a rooftop solar array at City Hall that is expected to meet approximately 30% of its annual electricity demand.
NEW CONTRACT. TWO ENERGY PROVIDERS PICKED FOR LOWEST COST
Concurrent with the design and construction of the NovaSol project and, with the above-referenced OUC contract in its last year, bids were again solicited for purchase of the City’s base electricity supply. Following analysis of 46 different bid combinations that were considered, the City made an overlapping contract award (lowest cost combination) to OUC and Florida Municipal Power Association (FMPA) for 3 years and 5 years, respectively.
The new electricity contract(s) became effective on January 1, 2018 and will supply the bulk of the City’s electricity demand until January 1, 2023. The new solar project became fully operational on March 30, 2018 and will supply approximately 12 million kilowatt hours of electricity per year, enough to accommodate the needs of more than 1,000 typical Florida homes, for the next 25 years. And, a new electric rate schedule was enacted by the City Commission which became effective on April 1, 2018.
“Bartow’s electricity demand has been fully secured at a favorable cost for the next five years and, to some extent, beyond. That will translate to a substantial rate reduction for our customers,” said Long. Under the new schedule, electric rates will decline approximately 9-13% for most residential customers and 9-17% for most non-residential customers; the higher the level of electricity usage, the greater the rate reduction. “Extremely low usage customers will realize a somewhat lesser rate reduction.”
CITY COMMISSION WITH A VISION: COMMITMENT TO MORE SOLAR FARM USE
In addition to what has already been described, the City Commission recently committed to purchase 13MW of solar-generated electricity through FMPA at very favorable pricing commencing in mid-2020, further reducing the City’s cost and dependence upon traditionally-fueled generating plants. The electricity will be supplied by a new solar facility in Osceola County that will be constructed early in 2020.
Should the project proceed as expected, solar energy will be supplying an estimated 20% of the City’s total electricity demand about two years hence. Long projects that a modest electric rate reduction may be “in the cards” at that time.
But, that isn’t the end of this story.
City commissioners recently approved a revised net metering policy to further incentivize private property owners to generate their own solar electricity. Should a private system generate more electricity than needed to meet its owner’s demand, the excess will be purchased by the City through an interconnect agreement with the owner.
“It’s a win-win arrangement for both the City and its customer. But cost isn’t the only consideration. Utilization of renewal energy sources to every reasonable extent is environmentally important, as well . . . and Bartow is doing its part,” said Long.
Looking even farther down the road, Long expects to be evaluating the feasibility of incorporating large-capacity energy storage into the City electric system. Stay tuned!
A SERIES OF FORTUNATE EVENTS LEADING TO LOWERED ELECTRIC BILLS FOR BARTOW’S RESIDENTS
2010 – City solicits bids for wholesale electricity
January, 2011 – City contracts with Orlando Utilities Commission (OUC), a lower cost bidder, for 7 years, and includes in the contract the latitude to purchase up to 10% of the City’s electricity from a renewable energy generator.
The City implements an electric rate reduction.
2016 – City solicits bids for Solar Farm Construction. NovaSol constructs 40-acre solar farm and installs a solar panel array on the roof of City Hall.
2017 – Bids for wholesale energy. City made an overlapping contract award (lowest cost combination) to OUC and Florida Municipal Power Association (FMPA) for 3 years and 5 years, respectively.
March, 2018 – ribbon-cut on new Solar Farm that provides 5-7% of Bartow’s electricity use. Solar panels at City Hall provides 30% of overall electricity for the building, increasing savings to the Citizens of Bartow.
April, 2018 – City of Bartow is #1 in the State of Florida for lowest residential energy costs.