The City of Kimberley is proposing to sell the SunMine solar facility to Teck Metals Limited. Section 28(4) of the Community Charter, related to disposal of water systems, sewage systems and other utilities, states that Council may only dispose of the works for the supply and distribution of gas or electrical energy with the approval of the electors.
The assent voting is going to take place at the same time and place as municipal election. The following key dates have been established, and voting hours for all opportunities will be from 8:00 a.m. to 8:00 pm at Centennial Centre: Advance Voting Opportunities:
SunMine Elector Assent (Referendum) Information Package The City of Kimberley is proposing to sell the SunMine solar facility to Teck Metals Limited. Section 28(4) of the Community Charter requires that the sale of a utility that supplies electrical energy requires the approval of the electors. Electors will have an opportunity to vote on the sale of SunMine in conjunction with the municipal election on Saturday, October 20th, 2018, or at the advance voting opportunities on October 10th and 17th. The question being submitted to electors is: Are you in favour of the City of Kimberley selling the assets of SunMine to Teck Metals Limited for fair market value? Why does the City want to sell SunMine? Issues with Operational Costs: In November 2011, the City of Kimberley conducted a referendum on borrowing up to $2M to construct a two (2) megawatts (MW) solar facility to be known as SunMine. Seventy six percent (76%) of Kimberley’s resident electors voted in favour of borrowing the $2M. However, prior to the start of construction the project lost $1.6M in federal grant funding. This prompted the project to be reduced from two (2) megawatts (MW) to 1.05 megawatts (MW). In three years of approximately $600K in revenue has been generated and only $32K has been allocated to reserves for future maintenance and capital replacement. Although SunMine has been financially self-sustaining for the first three years of operation, these costs are expected to increase. This would result in SunMine requiring subsidization from taxation to cover operational costs and capital replacement. In the 2011 referendum information package, the City stated that it “anticipates that this project will be self-sustaining and pay for itself through the sale of the solar-generated electricity to BC Hydro through their standing offer program. Since the revenue received from the sale of energy will more than cover the loan payments and the annual operating costs there will not be any increase to City of Kimberley property taxes.” Utilizing taxpayer’s funds to operate SunMine is not consistent with the City’s original vision for SunMine. Issues with Expansion: The City of Kimberley has an Energy Purchase Agreement with BC Hydro through the Standing Offer Program to purchase two (2) megawatts of power, and is currently fulfilling only 1.05 megawatt (MW) of that commitment. The SunMine needs to expand to two (2) megawatts of power (that the City is already contracted to sell to BC Hydro) to make the project financially viable. The Standing Offer Program is under review and has suspended applications, so expansion of the SunMine beyond two (2) megawatts (MW) of power is not imminent. The City of Kimberley has other infrastructure priorities competing for the more than $2M necessary to expand the SunMine, so a private sector partner was sought to fund the expansion. What has the interest from potential partners and investors been? More than a dozen private sector companies expressed interest in partnering with the City for expansion of SunMine. As owners of the brownfield land upon which SunMine is located, and the substation infrastructure to which SunMine is connected, Teck is a party to any potential expansion and must give their approval. After weighing the options of working with potential partners for expansion and considering that the Community Charter has restrictions on the type of partnership the City can enter into, Teck suggested and the City agreed that Teck itself would be the best proponent to take over the expansion of SunMine to two (2) megawatts (MW) of power and beyond. How has market value for SunMine been determined? Due to the unique nature of the asset being Western Canada’s only grid-connected solar facility it is difficult for an independent appraiser to determine fair market value. The most recent (2018) BC Assessment value of the SunMine is $1,693,301, which the Ministry of Municipal Affairs and Housing suggests can be used as a reasonable proxy for fair market value. The development cost of SunMine was $5.5M, which included $4.2M in construction cost with the balance being engineering, legal and other administrative costs. $2M of that total was funded with donations received from Teck. The book value of SunMine as of December 31, 2017 after depreciation is $4.9M What will be done with the proceeds of the sale of SunMine? Teck Metals Limited will pay the City of Kimberley the balance of the outstanding debt as of the date of purchase, which is currently approximately $2.15M, including interest charges. This will be used to pay off the amount of outstanding debt as the City of Kimberley share of the project cost, and result in Teck’s total investment in SunMine to be $4.15M. The proceeds from the proposed sale of SunMine would be placed into a reserve fund in order to continue to make debt payments on the outstanding debt. Summary of expected benefits to Kimberley
Information Meeting An information meeting to address questions on the proposed sale of SunMine will be held on October 1st, 2018 at 7:00 pm in Council Chambers. As of June 2018, Kimberley's SunMine has been in operation for three full years.
It is a well known fact that SunMine has been an award-winning project, and has brought major attention to Kimberley. It has won many awards since 2015 to date, including:
Over 2,000 visitors have toured the SunMine site. Tod Caton from Simply Kimberley and Resort Tours has been assisting the City with meeting the demand for SunMine ecotours. Tod can be reached at 1-844-474-6759 to arrange for a tour. The past three months has brought in the following revenue: April 2018 Revenue - $18,603 on 176.81 MWh May 2018 Revenue - $21,481 on 240.48 MWh June 2018 Revenue - $18,058 on 203.8 MWh Production for the second quarter was 102.8% of projected, after a particularly productive month of May. June 22nd marked the third anniversary of commercial production. As of June 30th, 2018, the SunMine has generated $569,864. Annual debt payments on the $2M are $125,722/year. Any surplus once debt and operating costs are paid goes into a reserve, which was at $32,746 at the end of 2017. There are 36 different rates paid for the electricity that is generated by the SunMine, dependent upon two factors. The first factor is which month of the year. Rates paid in May and June are much lower than those paid in December and January. The rates are lower when hydroelectric power is plentiful, and higher when water levels are lower. The second factor is time of day, divided into Peak (6 am to 4 pm and 8 pm to 10 pm), Super Peak (4 pm to 8 pm) and Off Peak (10 pm to 6 am and Sundays). The most profitable months for the SunMine are July and August, and the least profitable months are November, December and January. December in particular has been very disappointing compared to projections. June 2017 marks two full years since the largest solar facility in BC became operational. During the first full financial year in 2016 revenue was $179,006 or 88.4% of projections and energy generation was 87.4% of forecast generation. Production was impacted by smoky skies during the summer and a wetter than normal fall. 2016 expenses were $55,203, 72% of budgeted. Debt payments were $125,626 and there was $32,105 in the SunMine equipment reserve at the end of the year. SunMine continues to generate substantial publicity. There have been over 16,000 unique visitors to the project website and over 2,000 media articles since installation, including a recent story from CBC business news that was featured on the national newscast about the potential use of solar on other decommissioned mine sites .
There have been some technical challenges. Spring 2016 four of thirty two (4 / 32) inverters failed due to a circuit board manufacturing defect that was covered by warranty and which the City received $14,544 from business interruption insurance coverage before the situation was remedied in October. Spring 2017 seven of ninety-six (7 / 96) vertical elevation motors failed just off warranty. They will be replaced for $11,444 and the City is working closely with the manufacturer to address condensation found in the motor housing which caused the malfunction. Despite that, dry sunny weather this spring and summer 2017 boosted energy production above projected output. From June 2015 to June 2016 SunMine produced 1915 MWh, 98.6% of expected energy, and earned $195,700, which was 91.6% of expected revenue. During the first year less than $30,000 was spent on operating and maintenance, less than 58% of what was expected. The most significant variances were avoiding having to clean the panels. Dust is being cleaned by precipitation, with the snow scouring affect taking care of bird poop.
The other major variance was a decision not to contract-out SunMine maintenance and operation at an annual cost of $30,000. Instead maintenance is being performed by City electricians with the expertise of the electrical engineer who acted as the Owner’s Engineer and Payment Certifier during construction, who advises on technical issues City electricians are not qualified to troubleshoot. We expect operating costs to rise marginally in the future because the first year of operation was covered by a labour and materials warranty. During the first year warranty repair work was completed on 2 solar panels that were lost during a windstorm because they had not been installed correctly and one tracker motor. The 32 inverters, which have a 10 year warranty with ABB, were treated to a circuit board upgrade but not before 4 failed and are being replaced under warranty. Recently the City spent $36,000 to create an inventory of spare parts that will be available to swap out with. Each component of the system is under warranty but the spare parts inventory will ensure minimal downtime while the warranty repair work is being completed. Awards, recognition, and publicity continue One of the objectives of SunMine was to raise the community’s profile as a sunny, innovative community and this has proved to be a great success. Fall 2015 Mayor McCormick was a feature presenter on SunMine at the CivX Lower Mainland Local Government Conference. In 2015 SunMine and its partners were honored with:
In 2016 SunMine received:
Most recently we have been honored by:
1,096, people have toured the facility, including students from the local elementary, middle, and high school, as well as College of the Rockies and Selkirk College. 178 media articles have been published since construction was announced. The project video has received 4,111 unique views, and sunmine.ca has seen over 13,000 unique visitors.
SunMine has been presented with a prestigious award from the Engineers Canada: the National Award for an Engineering Project or Achievement. This is in addition to:
- Following the first 19 months of operation SunMine has begun to yield concrete results: Construction •Direct local construction labour: –8,711 hours –29 locals with 7.5 weeks of full-time employment •5.1% or $271,000 over budget •Completed 5 months behind schedule Operation •Over 19 weeks of commercial operation: –752 MWh of electricity sold to BC Hydro –$88,610 in revenue; estimated break even $216,000/year –$12,940 in operational expenses; compared to $61,800/year estimated Public Relations •500+ people toured facility •150+ media articles and blogs •1,800+ unique views of project video •8,500+ unique visitors to sunmine.ca •Mayor McCormick was a feature presenter on SunMine at the 2015 CivX Lower Mainland Local Government Conference •Awards: –Clean Energy BC, 2015 Community of the Year Award –Union of BC Municipalities , Community Excellence Award –Association of Professional Engineers and Geoscientists of BC, Sustainability Award (EcoSmart) On September 24 the City of Kimberley was presented a Community Excellence Award by the Union of BC Municipalities for Leadership and Innovation in Green Initiatives for SunMine, BC's first grid-connected solar facility and the largest use of solar trackers in Canada.
SunMine means bright future for sunny resort city Kimberley, BC
(KIMBERLEY, BC) The City of Kimberley is pleased to announce that SunMine is commercially operational. The 1.05 MW (megawatt) solar project is B.C.’s first grid-connected solar facility, as well as being Canada’s largest project to use solar trackers. Production data since June 22nd confirms that the energy being generated by the SunMine is exceeding the modeled design potential. According to Kimberley Mayor Don McCormick, “SunMine is a great example of the resiliency of our community. We are thriving and pursuing new and innovative directions. Although SunMine is the largest solar facility in BC, it is relatively small. As the SunMine proves its potential, the City of Kimberley is looking to expand it and have already had several inquiries from prospective partners.” SunMine is supplying enough electricity to the BC Hydro grid to power approximately 200 homes. “SunMine is a symbol of Kimberley’s commitment to the environment. When Kimberley’s mineral resources were depleted, we took advantage of our solar potential and developed a new resource which is renewable,” said Scott Sommerville, Chief Administrative Officer for the City of Kimberley. Kimberley receives the most sunshine in B.C. (over 300 days per year), and the community-owned SunMine is well suited to capitalize on these clear and sunny conditions. “Innovative, private clean energy projects have helped power B.C. since the 1980s and are a cornerstone of B.C.’s energy policy,” said Minister Bennett, Minister of Energy and Mines. “The Sun Mine project has the potential to spur interest in development of other solar projects, bringing more jobs and economic benefits to communities across B.C.” Teck provided use of the land and site infrastructure as well as a $2 million contribution towards the project. SunMine is located on Teck’s former Sullivan Mine site, which has been fully reclaimed. “Participating in SunMine reflects both Teck’s commitment to supporting local communities, even after mining has ceased, and our focus on expanding the use of alternative energy,” said Don Lindsay, President and CEO of Teck. “We’re proud to be contributing to the long-term prosperity of Kimberley and commend the City for their entrepreneurial spirit.” The City of Kimberley gratefully acknowledges the support of Columbia Basin Trust and the Southern Interior Development Initiative Trust and the Province’s $1 million contribution through the Innovative Clean Energy Fund. The SunMine project was conceived and supported by the Vancouver-based EcoSmart Foundation. “I’m extremely pleased that SunMine’s initial operation confirms the expected performance benefits of the project’s innovative design,” said EcoSmart CEO Michel de Spot. “Solar energy is one of the fastest growing industries in North America and its potential in BC is exceptional. EcoSmart is proud to have collaborated with Teck and Kimberley on this innovative project.” Free public tours of SunMine are being offered several times per day from July 31st to August 5th. To sign up for tours, visit www.sunmine.ca or call the Kimberley Visitor Centre at 778-481-1891. |
SunMineA Kimberley, BC solar power partnership, procuring energy from the sun. Archives
July 2018
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