Aztec special meeting to cover solar farm
FARMINGTON — Aztec will have a special City Commission meeting at 7 a.m. Monday to discuss a power contract with Guzman Energy.
City Manager Josh Ray said the city will need to amend its purchase power contract due to changes in the way that Guzman Energy is financing the solar farm that is being built in west Aztec.
Edwin Reyes, a consultant with Enchantment Energy Consulting LLC, said Guzman Energy had initially planned on doing financing through a tax-equity partner but has since decided to go through a standard project financing.
"In order to do project financing, there has to be some protection for the lender," he said.
Reyes said that is why an amendment to the contract is necessary.
Ray explained that Guzman Energy will be borrowing money to finance the solar farm and using the solar farm as collateral.
"It really doesn't impact us," Ray said.
He said if Guzman Energy defaults on the loan, the lender would assume the same role that Guzman Energy is currently providing to Aztec. The city would still acquire the solar field at the end of seven years as planned, Ray said.
The City Commission also will have to approve a solar power purchase agreement that would go into affect if Guzman Energy defaults on the loan.
Ray said he drove by the solar farm site on Thursday and was pleased with the progress.
"Everything's running right along," he said.
The solar farm is expected to be operational this summer.
The City Commission also will discuss a temporary transmission agreement with the Farmington Electric Utility System. With the exception of the energy from the solar farm, the power that Guzman Energy will be providing to Aztec will be delivered to the city through Farmington transmission lines. The two cities have not yet come to a long-term agreement on the transmission of power.
Ray said the city uses about eight megawatts of power, but it pays Farmington for 10 megawatt of transmission.
"That's costing us about $20,000 a month," Ray said.
He said Aztec is hoping to negotiate an agreement with Farmington under which it would only pay for transmission of the amount of electricity that it uses.
"If we could get them to only charge us for what we use, we could save ... $4,000 to $5,000 (a month)," Ray said.
Hannah Grover covers Aztec and Bloomfield, as well as general news, for The Daily Times. She can be reached at 505-564-4652.