Council pauses city solar redesign contract, asks for feasibility analysis after PUC rule changes

Melville — Council members on Feb. 26 pulled item 3B6, a proposed contract to update and re‑bid a city solar project originally designed in 2018, and directed staff to present a narrower, phased scope focused on feasibility and return‑on‑investment before committing to full design work.

Background and concern: The public utilities landscape has shifted since the original 2018 design, council members noted. One council member said the state PUC made changes that reduced solar buyback credits from roughly 30¢/kWh down to a fraction (reported in testimony as about 5¢/kWh), which substantially changes projected payback and the project’s economics. Councillors also questioned spending nearly $290,000 on design before confirming the project still makes financial sense under current rates and incentive programs.

What staff proposed: Public works staff said the consultant would update equipment and design alternatives, perform a cost analysis, identify grant opportunities and estimate construction costs. Staff agreed a staged approach is reasonable: an initial feasibility and economic analysis (smaller cost) first, followed by any full construction documents only if the numbers support it.

Council action: After debate, the council voted to reject approval of the full $290,000 design contract and directed city staff to return with a scaled, feasibility‑first proposal and updated cost estimates. Council members suggested contacting Clean Power Alliance and other regional partners for potential alternatives such as off‑site renewable procurement or turnkey third‑party proposals that could deliver green energy without on‑site capital expense.

Why it matters: The city’s earlier estimate for the total project approached several million dollars. Given PUC and market changes, council members sought to avoid committing design dollars until staff models current rebate and rate scenarios and potential grant funding.

Next steps: Staff will present a reduced‑scope feasibility analysis back to council, with updated cost estimates and options (including solar carports, battery storage, partnerships with community choice aggregators and alternative procurement models) before moving forward with final design.