Energy firm protests award of solar power contract to ACE

Coldwell Solar, Inc., a solar energy company based in California with plans to expand operations to the CNMI, has protested the Commonwealth Utilities Corp.’s recent decision to push through with a contract with American Capital Energy for the development of a solar power system on Saipan and Rota. Under the contract, ACE would sell power to the CUC at a per kilowatt hour charge for 20 years.

The project itself is a good one and needed, said Coldwell Solar chief executive officer Dave Hood, but it could be done at a much lower cost to the public.

“The contract award is based on 2011 pricing for the project,” Hood said. “Solar costs have dropped dramatically since then, up to 60 percent in most cases. If CUC were to bid out this project now, at today’s prices, the cost to CUC and to the public would be much lower. Based on today’s lower pricing, we could save an additional million dollars each year for 20 years. That’s a $20 million additional savings.”

CUC first announced the solar power project back in 2011. After a request for proposals, ACE was selected for award of the contract. However, the project was then put on hold for nearly three years while a feasibility study was conducted. Finally, late last month, CUC announced its intention to finalize the contract with ACE.

Over that same three-year span, however, the cost of solar panels, like those that would be used in the project, has substantially decreased. According to a report by the Solar Energy Industries Association, the average price of a photovoltaic solar panel dropped by 60 percent between 2011 and 2013, and Hood noted that in 2014 the decrease has continued even further.

“Since the cost of solar is so much lower now, it only makes sense to re-bid the project at today’s prices,” said Hood. “Not only our company, but many other local companies, including ACE, could effectively compete at the new lower rates. In the long run, the winner will be CUC, who won’t have to pay as much per kilowatt hour for the power, as well as the CNMI public, who won’t have to pay such high electric bills.”

CUC denied Coldwell Solar’s protest only a week after it was filed, concluding that it is “not compelled to change a procurement due to changes in the market, as markets change, up or down, constantly.”

“We realize there’s a sense of urgency for Saipan but this isn’t just an ordinary market fluctuation in pricing,” said Hood. “Rather, this has been an extraordinary event the likes of which we may never see again in the solar energy industry. It’s clearly a chance for truly significant public savings.” Hood believes the drop in pricing was influenced by an exploding global solar market, advancement in technology and efficiency, as well as pressure from the Asian manufactures.

Coldwell Solar has appealed the denial of the protest to the Office of the Public Auditor. (PR)