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November 30, 2015

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Boulder City OKs deal for solar power plant

Development agreement prohibits city from altering project zoning for 50 years

Plans for a fifth solar power plant in Boulder City’s Eldorado Energy Zone moved forward Tuesday night after the Boulder City Council approved a development agreement between the city and the company behind the project.

The city and Sempra Generation, based in San Diego, signed a 50-year lease on Jan. 11 for about 1,500 acres called the Black Hills site. The development agreement between the city and the company prohibits Boulder City from changing zoning, making alterations to its master plan or otherwise preventing Sempra from completing and operating the plant over those 50 years.

The council approved the agreement, 4-1. Councilman Travis Chandler opposed it, saying he believed it was unnecessary because a lease had already been signed.

“Why would we tie our hands?” he said.

The Black Hills project will be the sixth renewable energy generation plant to be built on city land. Sempra also constructed the 48-megawatt Copper Mountain plant, which began operating in December.

The plant, which will be located west of U.S. 95 and the dry lake bed, will produce about 200 megawatts of power when it’s completed, said attorney Bryce Alstead, who represented Sempra at Tuesday’s meeting.

The initial contract is for 30 years, with two 10-year options to follow. City Manager Vicki Mayes estimated the deal could earn up to $200 million in revenue, including utility bills and other fees, for the city in that time.

Mayes proposed a debt management plan in December to address more than $95 million owed by Boulder City that has accumulated mostly in the last decade, including costs from the construction of Boulder Creek Golf Club and a new water line. A crucial piece of that plan is solar energy leases, which Mayes said could help the city eliminate close to half of that debt in the next seven to eight years.

In contrast to Chandler’s position, City Attorney Dave Olsen said the development agreement would guarantee to Sempra that Boulder City would not attempt to rezone the land or target it specifically for utility rate increases after the company invests a significant amount of money in the project.

Alstead estimated that the photovoltaic plant would cost close to a $1 billion when completed. Construction is expected to begin in late 2012, Alstead said.

“They want to have assurances that we’re not going to change the rules in the middle of the game,” Olsen said.

Alstead said after the meeting that the development agreement would make it easier for the company to secure financing for the project — a concern familiar to Boulder City. The city was forced to address a $2.4 million hole in its budget this year when Sol Bio, which had also planned to build a solar plant in the Eldorado Valley, defaulted on its lease with the city in October.

That hole has been filled through a reduction in services, positions being held open and cutting the public information office. The company’s president had been unable to find financial backing.

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