Council votes for deeper study into solar project

By Rosanne Fohn

Anvil Herald Reporter

Hondo City Council voted 4-0 to enter into a feasibility study to consider constructing two solar energy projects at the South Texas Regional Airport. The vote was held at council’s regular meeting on June 9.

According to Ira Nicodemus, president and owner of Holistic Utility Solutions of Grapevine, Texas, one project would occupy approximately 30 to 60 acres and generate 13 megawatts of electricity. This project would supply Hondo with 20% of its power, at a rate equal to or less than its current power supplier’s rate. 

  CPS Energy provides electricity to the city at the current rate of 7.3¢ per megawatt.

A larger project of about 275 acres would be built to the west and south of the smaller project. That project would produce about 125 megawatts, which would be sold to other entities.

Potential annual revenue to the city would be about $550,000, counting the lease of the acreage, the benefit of lower energy costs and payments in lieu of taxes, Nicodemus said.

Holistic will own both projects and will pay all costs associated with the feasibility study, construction of the facilities and land remediation when the 25-year lease is up.

The company learned just hours before its presentation to council that the Department of Energy had just cancelled a solar energy grant program that would have assisted in construction costs. Also, Congress is discussing the possibility of ending energy tax credits that are set to expire in 2032. Cancellation of the tax credits would make it too costly to build the projects, Nicodemus said. However, if the credits are allowed to expire in 2032, the two projects could be completed before then, he said.

If deemed feasible to proceed, the smaller project could possibly be completed in 2026, while the larger project might not be operational until 2028.

During lengthy discussion, Councilman Joe Claire asked about the 25-year lease of the property and how much property is available for development at the airport. Councilman Porky Ytuarte said that there is about 3,000 acres of property. City Manager John Naron, however, said that there are limits on what can be placed there, depending on the FAA’s approval.

Ytuarte also asked questions about the costs the city would be responsible for if it decides not to proceed with the project. Nicodemus said the contract specifies that if the project is feasible and council at that time chooses not to proceed, the city would be required to pay Holistic for its expenses with a cap of $100,000 for each project.

Naron, who brought the projects to council a number of months ago, spoke in favor of the project.

“Ultimately, this project is up to the council. I wish we weren’t in a situation where all the grants are off the table – that would have been a tremendous win. However, I do believe there still is merit for the project and I believe the agreement gives us enough protection,” Naron said.

“I believe we have a good agreement and I like that the FAA finds this to be an acceptable project, because we’ve got a ton of land and it’s difficult to find economic development projects that are specific to the airport,” he added.    

   Currently the land and water rights are leased at a much lower rate for agricultural use.

“So I see this as a sure-fire way to get a lease rate that is higher on the land and the potential to hedge 20% of our power. We’ve got coal, we’ve got geothermal, we’ve got solar and wind power, we’re doing everything we can to make more power, but we’re still sometimes falling behind. So, we have to pay for that as customers. The price of electricity is very likely to go up. So I see this as a 25-year hedge on 20% of our power and that’s a very good thing,” he continued.

“With the understanding that if things don’t work out, say the tax incentives go away, then the project’s not going to make sense and we walk away.” Naron said.