Hello Georgina Green Energy Co-operative Members and CONGRATULATIONS!
We have been successful in securing renewable energy offers from the Ontario Power Authority for a total of 350 kW of solar installation on the roofs of the GEM Theatre and JC Trailers. To put that in perspective, when operational in the spring of 2014, these installations will produce almost $5,000,000 of revenue over the 20-year contract. The installations will produce enough electricity to power 50 houses and reduce green house gasses by about 120 tonnes/year.
Perhaps more importantly, it is an opportunity for co-operative members to make a difference in our community by working together to build a more sustainable future.
Let me back up a bit and share the overall status of the MANY renewable energy applications submitted across Ontario, on January 18th. A stunning 87% of all submitted applications were rejected. The OPA planned to award 200 MegaWatts of grid capacity to small FIT solar PV projects and, at the end of the application review process, they were only able to award 195MW of power, as most of the projects failed the application completeness stage. The key reasons for rejection seemed to fall around attention to detail in the packages submitted. Inconsistent naming conventions and accidental submission of a copy versus an original are two examples we are aware of. On behalf of the Board I pass along a huge thank you to Board Member Nancy Gallagher who, because of her experience in the application process, organized everything, oversaw everything, and reviewed everything that we submitted for those Georgina sites. Her level of precision was critical to our success.
Back to our two sites: We knew the huge rejection rate was good news for us because the next step before a Contract Offer gets made would be for the OPA to confirm the location we proposed can tie to the grid. We already confirmed that to ourselves, but they have to do it too. We got a confirmation from them a week ago that we passed the connectivity assessment and are now expecting a Contract Offer within the next couple of weeks. Now the fun starts!!!
Here is the action plan – note there is an ask of our members included so read right through!
1. We need to reconfirm our interest to proceed within 20 days of getting the Contract Offer, which we will do.
2. We need to solicit three independent bids for complete solutions with a focus on VALUE. That means we are not looking just at price, we want to know about reliability and performance as well. These installations need to last at least 20 years. Saving money now and spending more later is not a good idea. We have identified the candidate providers of complete solutions and are in the process of getting quotations now.
3. We need to pursue financing. There are two aspects to this. The first is for what the industry calls ‘Soft Costs’ which refer to preparation work required before a build takes place. Typically this is engineering work and other activity relating to being ready to build. The second is for the actual build itself.
There is a matching grant program available which means we will get $1 of free money for every $1 we raise. We need this asap and believe the safe number is $100,000. The OPA has some restrictions on how we get this money since it is not a formal securities offer. We are limited to $1,000 per Member and GGEC will pay nine (9) percent per annum on these dollars, beginning when production starts and they will be fully open loans for the GGEC to pay back at their discretion.
We will be assembling a formal securities offering and getting it out to Members and other interested investors. Since that takes time, we have already started discussions with loaning institutions about buying debt to get us going quickly. We will pay that debt off when Member investors come on board. There is no $1,000 limit for this exercise and we expect to be able to GUARRANTEE a 4-6% annual return on your investment and they will be fully open loans for the GGEC to pay back at their discretion.
Here is my ask:
The Board is interested in hearing from all Members on their interest in participating in the Soft Costs raise for nine (9%) percent return and for the Build Cost raise, offering a guaranteed return of 4-6%. Please get back to me as soon as possible if you are interested. This does not lock you in, it just lets us start a more specific discussion – we are sure you will have questions.
Thanks everyone – I look forward to hearing from interested investors and giving you more updates on our success.
PS – As this comes together, it is more and more important we add strength to our team. Your Board would be delighted to hear from people wanting to be on the Board or to volunteer in any way! Thanks again.
President, Georgina Green Energy Inc.