Jack,

We are one of the largest users of electrical energy among city bureaus. When we turn on groundwater, we use even more. This array helps offset some of the normal, day-to-day operation of the well field.

You can go to this website http://live.deckmonitoring.com/?id=groundwater_solar to see how much it is generating and general information about the facility. We are looking forward to our "Flip the Switch" ceremony on January 26th to recognize this accomplishment.

David Shaff, Administrator
Portland Water Bureau

Here is an FAQ for you and your readers:
Energy Generation
Q: When did the array begin generating electricity?
A: 12/21/09

Q: How many kWh will the panels generate? What is that equivalent to?
A: The panels will generate 300,000 kWh of electricity each year, equivalent to the energy consumed by about 50 homes.

Q: Can the panel generate energy even on dark winter days?
A: Yes, on the winter solstice (the shortest day of the year) the panels were generating 9,000 watts. That’s enough to power 2-3 homes.

Q: What is the peak amount of electricity the panels can generate?
A: 267,000 watts

Q: How much of the total bureau electricity use will these panels offset?
A: The panels will produce about 1.5% of total bureau electricity used, 10% of the energy used at the groundwater well field.

Q: What happens to the electricity that is generated?
A: Solar panels absorb the sun’s light. The light (photons) is absorbed by semiconductors in the panels and converted to electrical energy (electrons). That process generates DC (direct current) electricity. The DC electricity is routed to the inverter. The inverter converts the DC electricity to AC (alternating current) electricity. AC electricity is the kind used in (home) consumer appliances.

From there, the energy runs through the meter. The meter carefully measures the amount of electricity generated by the array. The electricity is then sent to the pump station where it is used to keep the facility up and running. When electricity is generated that is not used by the pump station the energy is sent to the PGE utility grid where it is used by PGE customers. If the pump station uses more electricity than the array generates, the bureau pays the normal PGE rate for the additional power used.

Q: If the array generates more power than is used by the Water Bureau does PGE pay the bureau for the electricity sent to the grid?
A: No, our meter acts like a bank account, debiting and crediting solar generation and electricity consumption for a year. In one year if we generate more than we use, then the excess electricity is donated to PGE low-income customers.

Q: How many panels are there?
A: There are 1274 total panels. Each panel is rated at 210 watts.

Cost and Funding
Q: How much did the array cost? How much did the Water Bureau pay?
A: The Water Bureau paid $350,000- about 15% of the total cost. (Total cost $2.1 million)

Q: How was the project funded?
A: The financing structure of the LLC was arranged in cooperation by Sentry Financial Corporation of Salt Lake City, Utah, Commercial Solar Ventures/Real Energy Solutions, and BEF Renewable Incorporated using an outside equity investor to utilize the federal solar tax credit and bonus depreciation and a pass-through partner to purchase the state solar Business Energy Tax Credit from the project. The Energy Trust of Oregon also contributed an incentive of $333,583, and the Water Bureau provided a grant to the project in the amount of $350,000. Additionally, Portland General Electric provided funding to the project in the amount of $17,000 on behalf of its Clean Wind customers. The federal, state and Energy Trust incentives, the utility funds and the Water Bureau grant were absolutely vital to this approximately $2.1 million project, which would not have been funded without them.

Q: Is the array cost effective? How much money will it save over time in energy costs?
A: The panels will generate approximately $21,000 worth of electricity during their first year of operation. As electricity rates continue to rise we anticipate that the savings potential will increase as well. In 25 years of operation the panels have the potential to save the Water Bureau over $500,000 in energy costs.

Q: Will the Water Bureau ever own the panels or will the LLC always own them?
A: At the end of the sixth year the Water Bureau will have the option to take over ownership of the panels.

Siting and Maintenance
Q: Who will maintain the panels?
A: The LLC that owns and operates the panels will maintain them.

Q: How are the panels maintained?
A: Panels will be washed each year during the summer. Additionally, the electrical equipment will be inspected, tested and cleaned twice a year. Structural inspections will be performed during each of the first three years of operation.

Q: Why is the array installed here and why is the Water Bureau interested in solar in general?
A: This piece of land was selected for a number of reasons:
1) Lot size and good solar potential. Proper zoning.
2) Pumping groundwater is the bureau’s single-highest use of energy. Siting the solar array at the groundwater pump station helps to offset some of that energy.
3) The site is surrounded by a public walking trail and canoe launch. This provides a good opportunity to share information about solar energy and about our water system to visitors.

The Water Bureau is committed to using and generating renewable energy in many forms, including solar and hydro electricity. Installing renewable energy facilities capable of generating 400 KW is a specific goal in the bureau’s 2009 Sustainability Action Plan update. The City, as a whole, recently released the 2009 Climate Action Plan. A 2012 action in the plan seeks to “Purchase or generate 100 percent of all electricity required for City and County operations from renewable sources, with at least 15 percent from on-site or district renewable energy sources such as solar and biogas.”

Q: What is the life expectancy of the panels?
A: The panels are warranted for 25 years, but will likely last much longer than that.

Q: Won’t those trees shade the panels?
A: Yes, the trees do slightly shade the panels in the winter months when the sun is low and the shadows are long. However, this is also the lowest production time for the panels so the trees are not expected to effect overall production much. The trees will not shade the panels in the summer when production is at its highest.

Bureau Energy Use and Upcoming Projects
Q: How much energy does the bureau use in a typical year? What percentage of that energy will be offset by this array?
A: In 2008 the bureau used 22,857,002 kWh of electricity. ~60% was used to power pump stations, ~25% to pump groundwater, ~10% to power occupied facilities and ~5% for fountains.

The solar array will offset about 1.5% of the bureau’s total electricity use.

Q: What other solar projects are in the works?
A: Currently, the city is working on a city-wide contract to install solar arrays at 6-10 sites around the city (Parks, PDOT, BES, Water locations). The Water Bureau will host two of those arrays. The bureau has done solar site assessments on a number of our properties including well fields, tanks, and on the rooftop of our 2010 Interstate facility.
The Water Bureau recently installed solar electric and solar hot water on our newly remodeled Meter Shop which has received a LEED Gold designation.

Q: What about hydropower?
A: The Water Bureau currently maintains 3 hydropower generations facilities and is looking at more in the future.
• Mt. Tabor micro-hydro rated at 175 kW.
• Dam 1 Powerhouse rated at 24 MW.
• Dam 2 Powerhouse rated at 12 MW.
• Currently applying for third-party certification of the bureau’s hydropower operations at the Bull Run dams as “low impact hydro.”
• Currently working on the design of a micro-hydro project at our Vernon pump station. This will generate 25-30 KW of electricity. Excess electricity will be sent back to the grid.
• Other micro-hydro opportunities include Mt. Tabor, Kelly Butte, C-valves between Powell Butte and Tabor.

I think Mr. Shaff is a little sensitive about this. Did I say "sensitive"? I meant "insecure".

They need all the busy-work they can get over there so they can justify absorbing the crop of Leonard cronies from BDS...

Gee, thanks David... so you'll MAYBE save $500K in 25 years after spending 2001K of taxpayer dollars (WHO CARES what fraction your bureau kicked in? It's still your customer's money. You should be embarrassed that you pursued this program based only on assumptions related to your own internal balances sheet. Even at that, I strongly suspect a realistic estimate of the upkeep costs was not included in these values. GREAT investment. GREAT leadership. You should be ashamed of yourself for trying to spin this as anything other than more Portland government waste.

The panels will produce about 1.5% of total bureau electricity used, 10% of the energy used at the groundwater well field.

In one year if we generate more than we use, then the excess electricity is donated to PGE low-income customers.

Interesting. How could it ever produce more than you would use, if its designed to only provide 1.5% of what you need in the first place?

Texas - just giving Jack some info. All he had was the press release. Do with it what you want.

Jon - Good question. I will have to get someone to help me with that tomorrow and post an answer. I think I know, but I dont want to post a guess and be wrong.

David Shaff

Allan L., any exhibition or even suggestion of transparency toward the residents of Portland by an employee of the City of Portland should be applauded and encouraged.

$2.1M to save $500K over 20 years.

Great job, Mr Shaft, its not bad enough PURB tells you you are wasting money and to not raise rates, you do it anyways. Then you have the gall to stick us with this idiocy.

You guys should stick to water bottles and stickers, you seem half-competent doing that.

David, the cost of the project does not include the value of the land it sits on. Shouldn't that be calculated into the mix? Almost always it is. What about all the water bureau, other bureau, permit costs, etc.; are they figured into the total cost?

Secondly, $2.1 Million cost if invested in a conservative investment (and not accounting for future dividend/interest income increases possible since we are at a historical low point) would provide a minimum return of $42,000 per year @ 2% return. That exceeds by double your projected annual return of $21,000. How is this beneficial to take a $21,000 dollar hit/year for the limited tax dollar we have?

I think the public is catching on to these false economic green analysis's that claims solar/wind/etc. only costs some amount but over 85% of total cost is actually coming out of other taxpayer pockets besides the water bureau's, which of course is the taxpayers again. That is what the wind farm tax issue is all about at the state level with Kulongoski's give-aways, and same with solar. The federal, state, city and Energy Trust give-aways need to be fairly considered.

Lee

The land value is pretty limited. It can't be developed because it's part of our groundwater pumping complex and is a maze of underground pipes that connect our wells to the pumping facility. Take a look at the satellite picture on Google Maps. The solar array is in the empty space to the east of the buildings within the security fence.

We didn't require us to get a permit from oursleves. :)

Our costs include our BDS permit costs. We don't have $2.1 million in the deal. We have $350k in it.

I will let the certified smart people who like to argue about tax policy and whether energy credits are good or bad weigh in. For our ratepayers, we think it makes sense and it helps us offset our energy usage.

David Shaff

"How is this beneficial to take a $21,000 dollar hit/year for the limited tax dollar we have?"

You forgot the lost intial investment of $2.1M which you won't get back. Plus he forgot to account for any maintenance.

So if you treated the $2.1M like a vanishing fund over 20 years at 2% return, then it should be $128,429/yr.

Or alternatively, he's spending $128K/yr to save $25K/yr. Needless to say, it doesn't take much intelligence to find a cheaper way to save $25K/yr.

These people don't care, the taxpayers pay their salary, they never get fired for incompetency and they can spend out omoney any way they feel without any accountability.

I’m going to write something here I’ll probably regret.

I think the solar experiment is a good idea. We are in the infancy of using the sun to generate the electricity we use. It will take a lot of trial and error before the best and most economical ways are found. It makes sense for the deepest pockets like government entities to fund the trials.

Perhaps in the not too distant future, we will be able to look back and realize some of the crazy ideas we had to go through to reach our goal.

any exhibition or even suggestion of transparency toward the residents of Portland by an employee of the City of Portland should be applauded and encouraged.

I completely agree, and thank David for at least making the effort to address questions before a skeptical crowd.

Of course there is the issue that since the land this solar array is on is owned by the City, it generates no tax revenue. And frankly, Oregon is a lousy place for solar projects. They work much better in sun belt and desert locations.
I also bet if this little Water Bureau BOONDOGLE was made widely known there might be a more than a few red faces at the Water Bureau.
One thing I do know for sure, is that the combined water and sewage bills at our new home in Reno are about 40% of what we paid these putzes in Portland. And we don't have poo poo going into the river every time we get a big rain storm!

It makes sense for the deepest pockets like government entities to fund the trials.

Deepest pockets? That mentality is problem with the "government class" in this state. Thats taxpayer money. They bitch on TV & radio about shorter school years, large class sizes, and "reducing services". Last I heard we have EIGHT state troopers for the entire state. We dont have "deep pockets".

You want to fund trials, go to the "deep pockets" of billionaires and venture capital firms.

David, most prudent appraisers/real estate/business people would put a value on land needed for an improvement, or even the raw land. For the water bureau to initially to have bought the land, they paid a value for the whole sq. footage. If land is underutilized, then used for solar panels or the like, there is value to that segment of the parcel.

Where is the information of where these underground pipes are located? And why would the water bureau place a solar array over pipes that need access? Is it going to be like PGE Park where a stadium will be built over pipes and worry about the maintenance problems later?

Also, I was very conservative in using the 2% return. The latest bond benchmarks are showing that an investment in a muni bond fund at 22 years plus term can earn 5.1% (WSJ). Instead of the double return I quoted, it becomes 5 times better ($107,100 per year) return on the $2.1 Million investment than solar. And that isn't even taking into account Steve's comment above.

Even if you want to discard the remaining tax dollar outlay beyond the water bureau's $350,000 investment, the return on the $350,000 water bureau investment with a 5.1% return makes 3/4ths ($17,850) of the $21,000 return you claim (which is only a high guessimate). For conservative times and even better, I know how most people would invest.

Your discarding the point about letting others discuss the 85% of other tax dollars to do the solar project is a sad commentary on government accounting and the water bureau. It's like staff at Portland's PDC telling URACS they they do not include land values, or even administrative costs in determining the cost of their projects. Even the commoners have figured the insanity of this. Too bad you have joined that thinking.

I've not always been a fan of the water bureau, and I've sometimes expressed it on this blog. But - let's be fair.

The bureau invested $350K, not $2.1M. Yes, some of the funds came from public sources outside of the LLC, tax credits, etc. But these funds are available to anyone with a worthwhile project. And the way we would be measuring any private company that had done the same thing, would be to compare the $21K/year savings to the $350K outlay. Not the $2.1M.

And yes, 6% still is pretty meager, in today's dollars. But it is a positive return. And how high will rates increases inflate the $21K/year savings over the 25 year life of the panels? My guess is that they will continue to outpace inflation, and we could easily be looking at 10-15% annual returns within the decade.

It's not just the investment -- it's also the relentless self-promotion that goes with all the nonessential activities of this city agency whose core function couldn't be less newsworthy or less complicated.

John, it isn't unfair to look at all the public "investment" (that includes the water bureau's tax dollars) in this solar project. It totals $2.1 Million with only a $21K/year return that isn't verifiable. But like noted, even subtracting the $1,785,000 (85%)in other tax subsidies, the return on the water bureau's $350,000 investment hardly has a better return than a conservative investment of the same amount of dollars. There has to be some accountability in all these "green" investments so we can stay green financially.

How about the competing uses for that $350,000? How many elderly shut-ins could have had their water service restored with invoice forgiveness?

How many leaking neighborhood sewers could have been repaired? There are a myriad of higher for $350k. Just pandering to the green voters doesn't improve our environment or standard of living.

The bottom line: the subsidies from the city/state/feds made this solar boondoggle happen...even with all those subsidies it is still the most expensive power source in town.

"But these funds are available to anyone with a worthwhile project."

Solar power is worth investigating, however the issue is how much?

After Mr Shaft raises water rates 18% on a whim and without PURB approval, then he buys into a plan where they spend $128K/yr to save $25K/yr - They're losing touch with the reality of rate payers who fund these fool's errand while they are taking pay cuts and paying higher rates.

Just saying he enabled it by only throwing $350K into the pot instead of the whole thing doesn't make it any better.

Sam and friends have been playing this "see we can find other fools to help pay for this" game for far too long.

Isn't time someone cried BS on their hobbies that we fund?

I know the panels themselves are quite durable (as long as they aren't vandalized), but is it reasonable to expect the inverters and other parts to last for 25 years?

David,

Do you think you're the first bureaucrat to explain how the unaffordable, unsustainable mission creep and corresponding neglect of core function and infrastructure is good idea?

That's the nature of government mission creep and too many bureaucrats with too much time on their hands.

FYI there are miles of dilapidated water and sewer pipes in need of replacing.

Yet for decades the bureaucracy and politicians couldn't find a way to make it sound like a good idea to upgrade them.

This continues to be the case.

It's amazing that Urban Renewal money, property taxes from the general fund, can be spent on so many boondoggles and silliness while basic maintenence is deferred.
Adding insult to insult is the Creepy claim that UR cannot be spent any other way.

Our children and our grandchildren will be paying the debt service on the money borrowed to fund the 85% tax credit for this project. The opportunity to invest these funds in projects and activities that have a much more substantial benefit (including what are sure to be with technological improvements dramatically better clean energy alternatives) will be forever foregone by virtue of the current expenditures.

More CoP double speak to try and justify boondoggle spending.
I would sign my real name but I am afraid of Randy's HIT squad.

"I know the panels themselves are quite durable (as long as they aren't vandalized)"
I suspect Michelle is on to something. If knuckleheads can shoot up a 120 year-old lighthouse, can this solar target be far behind?

Yes, it is very brave for Mr. Schaff to be so forthcoming about the investment in Solar Power and its meager returns. I also think he is rather brave to continue taking this beating at the hands of Jack's audience. It's pretty clear that this was not a well considered investment by the City.

David Shaff has shown himself over the years to be a great guy, by responding on this blog to just about everything we've thrown his way. The "my way or the highway" attitude in that bureau seems to flow more from the commissioner in charge.

David Shaff IS indeed a great guy, smart as hell, and a straight shooter. I'm glad to see some of the great comments on behalf of his efforts, which I see on a day to day basis.

it isn't unfair to look at all the public "investment" (that includes the water bureau's tax dollars) in this solar project...

I'll stand by my statement. Any private company taking advantage of the public investment would be measured on the $350k.

...a $21K/year return that isn't verifiable

Going by David's numbers above, the installed capacity (267 kW) produces 300,000 kWh/year - so that amounts to an average output of 12.8% of the installed capacity, which is reasonable, considering our climate and latitude. The retail cost of 300,000 kWh, by my latest PGE bill, is about $30,000. I think David's numbers are pretty conservative.

is it reasonable to expect the inverters and other parts to last for 25 years?

These sort of arrays were first put into service in Japan in 1959, are still in service. They didn't have the benefit of today's technologies.

If knuckleheads can shoot up a 120 year-old lighthouse, can this solar target be far behind?

So, taking this to its logical conclusion, anything anywhere can be shot up by vandals. Does that mean we shouldn't invest in anything?

"Posted by Sarah Bott"

Spoken like a true city employee.

"a straight shooter"

So how come on his little blog we never heard anything about water/sewer rate increases or the PURB's disapproval of PWBs spending habits?

I don't think he's a bad guy, but he needs some backbone instead of having Randy pull his strings all day long.

How about the competing uses for that $350,000?

How about paying their bills? Isnt the water bureau in pretty serious debt? Where did they get the $350k for this?

John Rettig, Yes, in a narrow scope "any private company" would look at only the $350,000 expenditure for their return ratio, and the rest of the $1,750,000 balance is "free" (somewhat).

But in this case it isn't a private company, it us all of us-all Taxpayers,their total expenditure, that must be examined. It is costing the taxpayers $2.1 Million. Is it a fair return? Any logical auditor would have to examine it this way and not as a "private company".

Lee - As I understand both the credits and accelerated depreciation, it's a fixed pool of funds that are there for the taking by anyone that meets the qualifications, until they are depleted. So if CoP water doesn't take advantage of it, someone else will, and the cost to the public will happen regardless.

And I'm being careful here because I'm on a tax prof's blog and been called on tax issues before. Professional opinion, Jack?