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August 3, 2015

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New solar plant coming to Boulder City in $46 million deal

Debt-laden Boulder City inked a $46 million deal at Tuesday’s city council meeting with Sempra Generation, which plans to build a photovoltaic solar panel plant on city land.

The city council unanimously approved the lease proposed by City Manager Vicki Mayes.

The contract spans 30 years with two 10-year options for renewal. Boulder City will collect $210,000 for the 2011 fiscal year; $743,500 for 2012 and 2013; to be followed by $1,485,700 annually for the remainder of the lease, totaling about $46 million.

Sempra -- a subsidiary of Sempra Energy, based in San Diego-- will build on the Black Hills site, which is about 1,400 acres west of U.S. 95 and the dry lake bed. It will be the fifth plant in the area and the sixth in Boulder City.

Phase 1 of its plan covers 887 acres, for a price of $1,675 per acre. Also part of the deal is an annual payment of $20,000 a year, or $41 an acre, for the next five years to lease an additional 486 acres the company can use for expansion.

The Black Hills land was appraised at $1,500 per acre, Mayes said.

Alberto Abreu, project manager for Sempra, said the plant should generate between 120 and 150 megawatts. Construction is expected to begin in late 2012 with operation starting in late 2013 or early 2014, he said.

Last month, Mayes announced and city council approved her preliminary plan to eliminate most of the $96.2 million the city owes for various projects and expenses incurred dating back to the turn of the century, including Boulder Creek Golf Club and a new water line.

Over the next eight years, Mayes estimated increased revenue from the six renewable energy projects under construction on the city’s land -- expected to total more than $335 million over the life of the leases, the last of which expire in 2067 -- should allow the city to pay back about half of its debt.

The Black Hills project will be Sempra’s second on Boulder City land. The company constructed the 48-megawatt Copper Mountain Solar plant, which opened in December, in Eldorado Valley.

The company hopes to build drainage facilities and possibly more photovoltaic panels during Phase 2, Abreu said, but it must conduct more research because that land lies over two earthquake faults that could prevent the panels from being installed.

Although Abreu declined to give specific estimates on employment during construction, he said the Copper Mountain project, about one-third of the size of the Blacks Hills plant, had employed more than 850 workers during its yearlong construction.

He also pledged that Sempra would hire as many area workers as possible. In February 2009, the company went before the Nevada Legislature amid allegations that it had taken state tax breaks for the Eldorado Valley project and then hired out-of-state workers. The company’s representatives testified that 65 percent of the workers were locals.

Boulder City solicited proposals for the Black Hills site in June 2009, and Sempra was actually the city’s second choice. It stepped in when Tessera Solar, which uses solar dish technology, said the land was unsuitable for its project.

Abreu said Sempra is still in the process of contracting a power purchase agreement. Pacific Gas and Electric funnels energy from the Copper Mountain plant to California.

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