What analysis is being done?
The initial feasibility study for the City of St. Albert indicated a solar farm could be a profitable option for our community. We need to do further analysis to determine if a solar farm makes sense for the City. For a potential project of this scale, it is important for the City to evaluate and manage risk, determine profitability and properly plan the necessary steps. We are still in the early stages of this project and more work must be done before we authorize construction to proceed. We already know the project would provide significant environmental benefits through clean energy. Now we are making sure the financial aspects also make sense.
Where are we at in the process?
Phases 1 and 2 of the multi-phase process are complete and were presented to Council on June 21. Before construction on a solar farm proceeds, several other steps need to take place. We must also thoroughly assess the situation after each phase, before proceeding to the next step. ATCO has begun Phase 3. The solar farm project has a total of five phases:
- Phase 1 – Initial Assessment: In June 2021, ATCO, a consultant with knowledge and expertise in this area, did an initial assessment and determined a solar farm could have merit. Based on the initial assessment, the City moved to Phase 2.
- Phase 2 – Pre-Design: Completed and presented to Council June 2021 along with Phase 1. The City has performed due diligence to ensure a solar farm aligns with the City’s operations, opportunity costs, infrastructure, land impacts, and community perspectives.
- Phase 3 – Detailed Design – as of August 2021, we are currently in this phase. A more detailed analysis will take place during this phase.
- Phase 4 – Prepare for Tender – yet to come and only with Council direction to proceed
- Phase 5 – Construction (represents approximately 80 to 90 per cent of the project’s overall costs) – yet to come
Why would we borrow money at six per cent?
The City would not borrow at six per cent; it would borrow at the lowest interest rate it can get, just as homeowners would do for mortgages or other personal borrowings, and current market rates are much lower.
The six per cent figure is in the proposed borrowing bylaw because the Municipal Government Act requires us to put a MAXIMUM borrowing interest rate into all of our borrowing bylaws. Six per cent represents our best judgment as to the highest level that market interest rates might potentially reach before we actually need to borrow – in essence, a worst-case scenario.
Why not release all the financial information used for the business case?
We are trying to be as transparent as possible and make meaningful and relevant information available to the public. We have to respect that our consultants have used a confidential and proprietary model for their economic analysis, which they have asked us to keep confidential. However, we will release all the data and assumptions that were plugged into the model.
What were the data and assumptions?
Last edited: August 26, 2021