Company officials from a local factory say a policy regarding solar panels enacted over the summer by the Poplar Bluff City Council could harm the town’s reputation as a business-friendly community.
The chief financial officer for Empire Comfort Systems addressed the council Nov. 6, questioning both the policy, how it was enacted and the response by officials to concerns the company has expressed since March.
The issue is how Municipal Utilities treats solar power produced through large customers’ solar panels, according to CFO Mike Lages.
“(City Manager Matt) Winters informed us that any power that our panels would generate, we would have to buy back from the utility at the same rates we’re currently buying and the utility would buy the excess power back from us at a fraction of its value,” Lages said. “This makes zero sense and no business would do it.”
The city has previously allowed these customers — 20 in total in 2022 — to use the power they generated and to sell to the utility any excess they generated. The customers have not paid for the solar they generate. Excess power put into the grid was paid for by the utility at a lower rate, more similar to the rate the utility would purchase power from its other suppliers, according to previous conversations by city officals.
The difference is the size of the solar arrays involved.
The existing customers all have smaller numbers of panels, often providing energy to single residences.
Empire has proposed constructing a large solar array, which was noted when the new policy was discussed in July by the council. The council approved the change in policy in August.
It sets up “qualifying facilities,” a term used under the 1978 Public Utility Regulatory Policies Act. PURPA is a federal law created to promote conservation and reduce dependence on fossil fuels.
Empire would be the first customer for Municipal Utlities to fall under the new policy, said Winters.
“There are state and federal rules that apply to the different types and that is the reason for a there to be two policies,” Winters said
The city’s policy was developed after speaking with law firms that deal with this type of policy and visiting with cities that have existing policies, including Springfield and Columbia, Winters said.
The city’s law firms have indicated this type of policy is normal, he said.
Empire disagrees, arguing they have also spoken with industry officials about policies of other cities, including officials from the Rolla area.
“Earlier this year, we decided to improve our factory by adding solar panels... This was going to save money and improve our carbon footprint,” Lages said. “We reached out to your city manager and your utility manager to engage the city in connecting to the utility in our normal collaborative way that we’ve always had with Poplar Bluff.
“Needless to say this was not collaborative.
“We were met with opposition, feet dragging, delays and a flat out refusal to accept anything...”
Empire was “completely blindsided,” by the decision in July to change city policy, after having started discussions with officials in March, according to Lages.
“All of our dealings with Poplar Bluff have been honest and straightforward. Until now,” he said. “We never expected the city to act on an ordinance that would so negatively impact us and not give us the opportunity to discuss or present alternate positions before passing.”
The city has said their current policies match up with PURPA.
Empire and its contractor, Artisun Solar, argue the policy gives municipalities options. They argue the option Poplar Bluff is choosing is not the standard.
The city is concerned about lost revenue to the utlity with increased solar use, Lages said, but the damaging impact of being viewed as unfriendly to businesses, as well as a possible lawsuit brought by Empire and its contractor could cause far more harm he said.
Kirck Kreisel of Artisan Solar, Empire’s solar contractor, estimated Empire might save about $75,000 a year in electricity costs through the planned solar expansion.
Kreisel said that would not equal a $75,000 loss to the utility because of the cost MU has in purchasing and supplying power.
He presented figures to the city council that estimated the profit loss at about $13,900 annually. The figures provided by Artisan included details about average commercial electric rates, average value of solar, estimated solar to be used by Empire and other details.
“(Mr. Bach) worries about the perceived loss of revenue to the utility if other manufacturers in the area follow suit. This is simply short sighted,” Lages said, asking, “What about the top loss tax revenue for businesses leaving or not expanding in Poplar Bluff as you are now being viewed as not business friendly? What kind of damage would that do?”
Lages said he had not come before council to make idle threats or try to hold the city hostage with talks of lawsuits.
“I want to get our relationship back to where it was with Poplar Bluff,” he said.
Empire is asking for a waiver from the current policy for planned and future solar expansions.
Empire has invested $50 million in Poplar Bluff, along with bringing jobs and tax revenue since it came in 2018 looking for a location for a new factory, he said. The company has moved sevarl of its manufacturing lines here nad is making plans to continue expanding.
“At a time where manufacturers like Tyson and Revere are closing plants, we are growing ours and Poplar Bluff has been an open and honest partner,” he said.
Members of the council said Nov. 6 the information would be taken under advisement.
Winters has said he does not believe the specifics about how small and large solar users are billed are availble through either the city or utility’s websites. He was asked to provide the wording for this article and if he wished to respond to Empire’s statements about the city being business friendly. No information had been received as of press time.