50 MW of Solar? Make that 400 MW

Nothing sparks investment like a good bargain. So when officials for San Antonio, Texas, municipal utility CPS Energy started receiving bids for a 50-megawatt project, they saw a good deal and an even bigger opportunity.

“We were noticing that the prices were very attractive,” said CPS Energy spokesman Victor Robledo. “It shows that the cost of solar is coming down. We have to do what’s right for our ratepayers and for the environment.”

The right thing, from CPS’ perspective, was to increase its development proposal eight-fold to 400 MW. CPS will begin evaluating proposals from 39 participants from across the globe before awarding contracts in early to mid-August.

It’s all part of a shifting strategy for the nation’s largest municipally owned utility that provides both natural gas and electric service. The utility’s portfolio currently includes nuclear, coal, natural gas, wind and a small amount of solar. The current solar capacity stands at 14 MW with a signed contract for another 30 MW. An additional 400 MW would represent about 6 percent of its current total capacity, but it would position San Antonio at the forefront of the renewable energy market — a stated goal for the company.

According to published reports, customers pay an average of 9 cents per kilowatt hour. The price for the solar electricity could be marginally more expensive, though company officials have not made the price range public.

According to SEPA’s 2010 Utility Solar Rankings, the 10 U.S. utilities with the most solar activity added 561 MW of new solar capacity last year. This CPS Energy project would produce the equivalent of more than 71 percent of that new capacity on its own. Municipal utilities have recently lagged behind investor-backed utilities in installing solar capacity. The San Antonio project, however, shows how a municipal utility can provide leverage on many fronts.

In addition to private industry jobs that will be created in the San Antonio region during the construction phase, the move is also expected to be an economic boost in other ways. The city is working to lure technology companies to the region, and the development is expected to add new solar manufacturing.

“We want to become a hub for the solar market,” said Robledo.

Two other developments related to the solar announcement underscore the growing influence of solar. First, as part of the bidding process, companies were required to include a plan that will help support education in the San Antonio area.

Secondly, the company has announced a plan to mothball a coal plant in 2018, well ahead of schedule.

“Instead, we’re going to pursue renewable energy,” said Robledo.

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