Council here has amended its investment policy in order to allow the town to invest in a local solar power initiative.
Council amended the policy at its Nov. 5 meeting.
The changes will allow the municipality to be involved with a greater selection of investment opportunities, including equity positions in private-public partnerships, explained treasurer Gordon Duff in a report to council.
Minto’s existing investment policy dates back to 2011. Since that time, various opportunities to participate in renewable energy projects have been made available to Ontario municipalities, Duff reported.
“The Town of Minto may be interested in a broader range of investments in order to obtain an improved rate of return for its citizens while maintaining a conservative investment policy,” the report notes.
CAO Bill White explained that he, along with Duff and Mayor George Bridge, met with representatives of energy supplier Sun Saver 2 to review the rules and application process for the provincial’s government’s FIT (Feed In Tariff) 3.0 program.
Last month, council learned seven applications from Minto for solar panels on municipal structures under the FIT 2.1 initiative were rejected, despite significant efforts by council, staff and community members to meet tight deadlines and strict guidelines.
Despite the rejection, council agreed to investigate the regulations for applications under the recently announced FIT 3.0 program.
White told council that as a result of the meeting with Sun Saver 2 “there is a better understanding of the process.” He presented some key points for council to consider:
– applications will receive three priority points if the town has a 15 per cent share in the capital of the program (an estimated $250,000 investment);
– if council passes a resolution supporting solar installations in the municipality the application receives two priority points;
– the involvement of a municipal host for the site generates two priority points. Additional sites may be included and Sun Saver 2 is asking council to consider sites at the Harriston lagoon and Beehive Park;
– the Minto Green Energy Co-op LP may invest in the solar program, but no priority points are received. Sun Saver 2 is to confirm communication with local members; and
– an installation on the Harriston Fire Hall should proceed.
The report states the town has a bond due next spring worth close to $250,000 that, if invested in the solar program, would return well above the normal rate the town can get on its best investments.
“The town could also borrow to fund its share, but the preferred approach is to re-invest the bond,” White explained.
Depending on the size of investment approved by the Ontario Power Authority (OPA), the town, at 15% ownership, could receive in the range of $40,000 to $50,000 in annual dividends over 20 years from the solar investment. As host the town will receive $40,000 to $50,000 in rent per year. If seven or eight applications are approved, the town will receive a return of $1.6 to $2 million over 20 years if a standard offer FIT contract can be signed.
“At this time, if the town commits to 15% the funds would not have to be advanced unless the applications are approved and until the corporate structure for the program is established. This type of investment is similar to Westario except at a much smaller scale,” Duff’s report explains.
Bridge said given the amount of time and effort the town has put into investigation and previous solar applications, it was worth going ahead with this latest application.
“I think it’s well worth it, even with the effort we’ve done to date, to take one more stab at it,” said Bridge.
Councillor Mary Lou Colwell replied, “The only difference with this stab is it involves a very serious financial commitment, which we haven’t been asked for in the past.”
Bridge said, “If we get to that 20-year contract, and we won’t be investing until we get to that, then I feel fairly confident we’ve got the government on the hook and that return in the investment will be there.
“We have government bonds now, we trust government bonds, we trust them to follow through on the contract.”
Council passed a resolution at the meeting:
– permitting Sun Saver 2 to apply to the program on the basis the town will invest approximately $250,000 (a 15 per cent share of the total cost) – by transferring the investment maturing next spring;
– supporting a general resolution in support of solar installations in the municipality;
– authorizing the town’s solicitor to sign documents authorizing solar installations at the Harriston Industrial Park, the Harriston lagoon, Beehive Park and roof-mounted installations at the municipal office, the Harriston, Palmerston and Clifford arenas, and ground mounts at Greenbush, Palmerston Industrial and Clifford lagoons; and
– that a microFIT installation on the Harriston Fire Hall proceed subject to approval by a professional engineer.
