Opinion: SPPA will meet its goals to provide affordable, carbon-free, solar electricity
Having read Jacob Michael’s article in the Sept. 29 issue of the Centre Daily Times on the Solar Power Purchase Agreement (SPPA), we want to add some clarifying details. We have both been involved with the project since its inception.
The SPPA has two objectives: (1) reducing the greenhouse gas footprint of our local governments; (2) lowering our energy costs and providing fiscal stability. On the first objective, the Centre Region Council of Government, State College Borough, Ferguson Township, Patton Township and Harris Township have all pledged to reduce their greenhouse gas emissions. The State College Area School District (SCASD) also has policy committing it to “the responsible stewardship of energy.” This project tangibly acts on these goals.
The second objective — saving money and providing fiscal stability — became possible about the time that the SPPA effort started because solar became cost-competitive.
The SPPA saves about $10/megawatt hour compared to the conventional grid based on coal and natural gas both of which are huge greenhouse gas polluters. It will save SCASD $130,000-$150,000 per year. There are comparable and proportional benefits for all participants. The break-even point, even after legal and consultant upfront costs comes early in the second year — that is an excellent return on investment. Penn State’s version of this project has saved far more than anticipated.
In addition, it has some positive effects we did not expect. It will be in Walker Township in Centre County, meaning the jobs will be in Centre County. Moreover, it will serve an educational purpose for Centre County school districts.
None of the critics of the SPPA has made a case that these objectives will not be met. Their arguments cherry pick legal fees in an effort to sabotage climate action. Their criticisms have created heat with no light.
Legal guidance in energy requires high levels of expertise. The legal costs can seem high, but the contracts are at the finish line and we are very unlikely to see another legal bill for the SPPA. Most importantly, the project team has protected us from risk and future costs.
Additional perspective on cost helps. At the low end, Harris Township’s most recent share of $469 or Patton Township’s share of $2,234 lie in the range of the cost of drawing up a will or writing a simple business contract. State College Borough was able to allocate their share for legal fees as part of pre-existing budget approvals. The cost for the largest contributor, SCASD, is less than for some municipal lawsuits. The total cost to enter the PPA is less than 0.1% of all parties’ combined budgets.
The critics have also lost sight of the cost of greenhouse gas pollution to society. As the Brookings Institution explains, “The social cost of carbon (SCC) is an estimate of the cost, in dollars, of the damage done by each additional ton of carbon emissions.” In 2022, the EPA suggested that price should be $190/ton. An article that same year in the prestigious scientific journal, Nature, suggests $185/ton. The total avoided emissions from this project will prevent between $765,000 and $2,850,000 each year in climate damages.
As acknowledged by Centre Regional Planning Agency sustainability planner Pam Adams and Peter Buck, the communication about the legal fees between the working group and the municipal entities could have been better. However, a joint project at this scale is unprecedented in this region. There was no guidebook to follow. Although the fees were higher than some decision makers in the process were accustomed to, they were appropriate.
And it is not lost on us that some critics disingenuously repeatedly say, “I support action on climate change, but ...” We know what everything after the word “but” means.
In summary, the SPPA will meet its objectives to provide affordable, carbon-free, Pennsylvania solar electricity for our governments. That is why we must go forward with it.