Los Angeles Department of Power & Water, the largest municipal electric utility in the US, has issued a request for proposals for a 250MW solar PV installation.
LADWP will develop 50MW of the programme at the utility’s Beacon Solar Project in Kern County, California, and will seek bids from up to four developers for the remaining four parcels of 40MW to 60MW, but a single developer may be chosen for all four parcels.
Anh Wood, manager of the utility's solar initiatives, told PV Tech: “It's very creative, no one has done it before. Our goal is to bring in large-scale developers so that they can bring their financing and their purchasing power. Fifty megawatts is big but it's not something that shocks us.”
LADWP already has two large-scale power purchase agreements with two projects in Nevada that exceed 200MW.
Power purchase agreements for Beacon will be for a 25-year term and capped at $85/MWh. Developers will also be able to enter a competitive bidding process to develop projects in the LA Basin. The associated local solar offering will consist of four 10-14 MW blocks of solar projects built on private properties within the LADWP's Los Angeles service territory for 20-year contracts capped at $140/MWh.
California's Renewable Portfolio Standard requires investor owned utilities and municipal utilities to procure 33% of their electricity from renewable sources.
LADWP aims to have 1200MW of solar capacity by 2020, representing 12.2% of its 33% total. LADWP aims to reach 25% of its 33% goal by 2016.
So far, LADWP has focused on wind projects, but PV cost declines, good insolation in southern California and the Investment Tax Credit make solar an attractive option for the utility, said Wood.
“The next phase is to add more solar especially since the ITC is still available until 2016,” she said. “Most of our solar projects will happen in the next few years.”
LADWP, which serves 1.2m customers, currently sources 40% of its electricity from coal-fired generation, which it plans to divest over the next couple of years.
“That's what our customers want and that's what our city leaders are asking for,” she said.
Permits for the site have already been granted for the Beacon site, 70 miles north of Los Angeles. LADWP purchased the Beacon site for a reported $31.5m last December from NextEra Energy, which had planned to build a 250MW solar thermal plant on site. The RFP process will close in July and construction is scheduled to start in January 2015.
Earlier this year, LADWP launched a feed in tariff programme aimed at the commercial rooftop segment at 30kw to 3MW.
Twenty megawatts was allocated at the start of the year, but LADWP received 150MW-worth of applications. Another 20MW will be released in July. The current rate is 17c kwh with a 1c step down rate at each phase.