SMECO Plans to Build Solar Project in Hughesville - Southern Maryland Headline News

SMECO Plans to Build Solar Project in Hughesville

HUGHESVILLE, Md. (September 24, 2011)—Southern Maryland Electric Cooperative (SMECO) has announced plans to build a solar project in Hughesville on a 47-acre parcel near the Co-op's new Engineering and Operations facility.

SMECO worked with the National Renewables Cooperative Organization (NRCO) to distribute a request for proposals in March and received responses from 18 developers who submitted proposals for 28 projects. SMECO will work with SunEdison, based in Beltsville, Maryland, to construct a solar project with a capacity of approximately 5.5 megawatts (MW) that can produce nearly 8,700 megawatt-hours (MWh) of energy annually. SMECO plans to use more than 10 percent of the solar energy produced to power the Co-op's new Engineering and Operations facility. In addition, the project will provide energy to SMECO's customer-members and supplement SMECO's power portfolio.

Producing solar renewable energy will help SMECO fulfill its renewable portfolio obligation as required by the state. Utilities are obligated to purchase 0.1 percent of their load from solar energy resources in 2012; that percentage increases each year thereafter. Utilities that do not purchase the required amount of solar energy must buy renewable energy credits or pay a penalty.

"We are making the most of our existing resources to increase our effectiveness as a cooperative: land that was once used to produce tobacco will now be used to produce electric energy," according to Austin J. Slater, Jr., SMECO's president and CEO. "Working with NRCO and SunEdison has allowed us to develop a project tailored to our needs that will benefit our customer-members. Through our partnership, we will be able to obtain low-cost financing for infrastructure that will increase the availability of solar resources within our service area."

SMECO has established SMECO Solar LLC, a new wholly-owned subsidiary, which will own the solar facility. SMECO Solar submitted a filing to the Maryland Public Service Commission (PSC) today to request an exemption from the PSC's Certificate of Public Convenience and Necessity (CPCN) process. With certain exceptions, anyone wanting to construct an electric generating facility must first obtain a CPCN. One of these exceptions is for certain on-site generating facilities. SMECO Solar filed for a CPCN exemption based on the following guidelines in the law: the capacity of the generating station does not exceed 25 megawatts, and at least 10 percent of the electricity generated each year will be consumed on-site. As a complementary filing, SMECO has asked the PSC to approve financing for the project and to waive some of its regulations to allow for the cost-effective operation of SMECO Solar.

SMECO plans to start the project before the end of the year to qualify for a federal grant from the American Recovery and Reinvestment Act that will cover 30 percent of the construction costs. The project is expected to reach full operation in early 2013 and to generate energy for at least 20 years.

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