HomeMy WebLinkAbout10 Attachment 1 Red Mesa Solar Talking Points ATTACHMENT 1
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Red Mesa Tapaha Solar Resource Talking Points for
UAMPS Participants' Governing Bodies
What is the resource? The Red Mesa Tapaha Solar Resource will be a 66 MW solar photovoltaic
generation facility to be located on Navajo Nation reservation in southeastern Utah. The facility is
scheduled to become operational in March 2023.
How is UAMPS contracting for the resource?UAMPS is entering into a power purchase agreement
with Navajo Tribal Utility Authority Generation-Utah,LLC, a subsidiary of Navajo Tribal Utility
Authority("NTUA") on behalf of UAMPS members electing to participate in this project. UAMPS is
utilizing the Master Firm Supply Agreement with a specific transaction schedule for the Red Mesa
Tapaha Solar Resource as the agreement with its members participating in this project.
What is the term of the arrangement? The PPA between NTUA Generation and UAMPS provides for
the delivery of solar energy for twenty-five years once the project comes online(March 2023).
What is NTUA's development experience?NTUA has developed and brought online two utility scale
solar projects within the last three years on the Navajo Nation and is in the process of developing
additional solar resources on and off the Navajo Nation reservation. NTUA will use a significant amount
of its proceeds from the proposed project to support electrification on the Navajo Nation, such as with its
Light Up Navajo! Initiative.
What happens if the project does not come online as expected?NTUA Generation will provide
development security to protect UAMPS from delays in the project coming online or the failure of the
project to ultimately become operational.
Supply chain constraints have slowed deliveries for new solar projects. The industry has seen many
projects delayed or cancelled as a result of this challenging environment.' To accommodate these
challenges,the commercial operation date for Red Mesa Tapaha Solar which was initially planned for
June 2022,has been pushed to March 2023.
Recently,NTUA has been sending updates on construction progress,and shipping for solar panels and
inverters. Per contract terms,NTUA will be providing regular updates from now until the commercial
operation date.
What is the pricing? The pricing is $37.00/MWH and has no escalation. This pricing includes
renewable energy credits.
'Bloomberg: "NextEra Says Tariff Probe May Slow Solar,Storage Projects."
https://www.bloo m berg.com/news/articles/2022-04-21/nextera-says-ta riff-probe-may-delay-some-solar-storage-
prolects
Reuters: "U.S.solar industry warns of slowdown due to supply chain disruptions,tariff uncertainty."
https://www.reuters.com/world/us/us-solar-industry-warns-slowdown-due-supply-chain-disruptions-tariff-
uncertainty-2022-04-28/
What protections are in the Amended and Restated PPA for Red Mesa Tapaha for non-
performance? The development security and delay damages amounts were increased in the Amended
and Restated PPA by approximately 30%. Additionally,NTUA has increased the contractual Net Annual
Deliveries by 4.7%. NTUA is responsible to pay liquidated damages if the Net Annual Delivery Quantity
is not delivered.
What guarantee do we have that the Amended and Restated PPA's price per MWh will not
increase again?
The Contract Price in the Amended and Restated PPA includes language that states, "In no event shall the
Contract Price be increased for any reason, including Excused Delay or Force Majeure."
What would happen if a participant does not approve the Amended and Restated Transaction
Schedule? UAMPS would solicit interest from other UAMPS members willing to pick up any available
output from the Red Mesa Tapaha Solar Resource.
If the terms and conditions were not met in the original PPA,why did UAMPS not terminate the
project?
NTUA identified a Force Majeure claim,pushing out the commercial operation date. UAMPS had the
option of litigating the Force Majeure claim,but it would have been an uphill battle. Additionally,NTUA
identified that the project was no longer financeable at the original PPA Contract Price. As a result of the
requested change in Contract Price,UAMPS had the option of identifying an anticipatory breach of
contract and walking away from the contract with the development security(subject to possible
litigation). However,any alternative solar PPA would be at an increased price with an online date of
approximately five years due to transmission restrictions and equipment availability. (See the below
graph showing PPA index value for North American Solar in Q1 2022 at$36.31/1\4WH with an
increasing price trajectory.)
LevelTen's PPA Price Index
Price($/MWh)
$70.0 C
Europe
wind
Europe
60.00 blended
Europe
- ------------------- solar
50.60
................................................................................ North
America
wind
40.00 North
America
_ - .. blended
North
30.00 America
..-•-•-• .....-
solar
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
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