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Solar power for Houston hits a snag

Back in September, I noted a deal that the City of Houston was working on with a firm called NRG to build a solar plant that would supply some of the city’s power needs. This deal has apparently hit a snag because it is a 25-year deal.

The city generally doesn’t commit future taxpayer funds without some sort of oversight and approval, however, said spokesman Frank Michel. Future elected leaders don’t necessarily like being forced to pay for past administration’s decision should they go bad, so the city usually has a clause in long-term agreements that says they have to be reapproved on a year-by-year basis.

Michel said he doesn’t believe state law prohibits the city from making long-term commitments, “But it’s a precedent the mayor does not want to set.”

But NRG isn’t so comfortable with that uncertainty.

“NRG is unable to finance this project without the certainty of future payments under a power purchase agreement,” said NRG spokesman David Knox in an e-mail. In other words (not Knox’s) no company wants to build a $40 million project with just a single-year’s payment guaranteed.

Both sides say they want to do the project with each other, but this disagreement appears to be pretty fundamental to both sides.

Bummer. I hope they can work it out, but we’ll see.

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