City Council
Regular MeetingMartinsville, VA · July 12, 2022
Minutes
July 12, 2022 Council Meeting
The regular meeting of the Council of the City of Martinsville, Virginia was held on July 12,
2022 in Council Chambers, Municipal Building, at 7:00 PM with Mayor Kathy Lawson presiding.
Other Council Members present included Danny Turner, Chad Martin, Jennifer Bowles and
Tammy Pearson. Staff present included City Manager Leon Towarnicki, Assistant City
Manager/City Attorney Eric Monday, Public Information Officer Kendall Davis, Community
Development Manager Mark McCaskill, Utilities Director Durwin Joyce, Public Works Director
Jeff Gauldin and Police Chief Eddie Cassady.
Mayor Lawson called the meeting to order and advised Council would go into Closed Session
beginning at 6:30 PM. In accordance with section 2.1-3711 Code of Virginia (1950, and as
amended) and upon a motion by Vice Mayor Bowles and seconded by Council Member Turner
with the following 5-0 recorded vote: Mayor Lawson, aye; Council Member Pearson, aye; Council
Member Turner, aye; Council Member Martin, aye; and Vice Mayor Bowles, aye. Council
convened in Closed Session to discuss the following matters: (A) Appointments to boards and
commissions, as authorized by Subsection 1. Council recessed Closed Session and returned to
regular session at 7:00pm. At the end of Open Session, Council will reconvene to Closed
Session.
Mayor Lawson called the meeting to order and welcomed everyone to the meeting. Mayor
Lawson lead the pledge to the flag and invocation.
Approve minutes from the June 27, 2022 Northside Neighborhood Meeting and the June 28,
2022 Council Meeting – Vice Mayor Bowles made a motion to approve the minutes as presented;
Council Member Martin seconded the motion. Turner requested that additional verbiage be
added to the June 28 minutes regarding Pearson’s request to hire an outside agency to review
the City Attorney contract; Mayor Lawson said Council could consider that option at a later date
and that the Clerk of Council could add that verbiage from the recording. Vice Mayor Bowles
requested on the June 27 minutes, that a hyphen be added when referencing the 4-month
moratorium. All Council Members voted in favor with the two amendments.
Recognize City Employees who are eligible for Service Awards for the period April 1 – June
30, 2022 – City Manager Towarnicki recognized those employees who received service awards
and thanked them for their service.
July 12, 2022 Council Meeting
Consider a request from Henry County to fund a portion of one-time stipends for 911 and
DSS employees – City Manager Towarnicki reminded Council of the budget discussions related
to raises for the 911 Center. A week ago, Henry County approved $1200 stipends for the
employees including the 911 Center and Department of Social Services, both funded by the City
and County but that was overlooked during budget discussions. The City would be responsible
for 1/3 of the stipend or $400 per employee with a total cost of $44,653. After discussions with
the County regarding the settle-up funds which normally roll into the fund balance, staff
recommends that the $44,653 stipends be approved. Those funds will be handled as a re-
appropriation at a later date. The difference between the settle-up and the stipend total would
roll over into the fund balance. Towarnicki speculated that the DSS’s underspending of funds
would be related to the inability to fill staffing positions. Staff recommends approval of the
request from Henry County to fund a portion of the one-time stipend for 911 and DSS employees.
Mayor Lawson stated that she is thankful that Henry County reconsidered the stipend since
they voted no to that previously. Vice Mayor Bowles made a motion to approve the request;
Council Member Turner seconded the motion with all Council Members voting in favor.
Hear information from the Public Works Department regarding paving of City streets – City
Manager Towarnicki touched on previous discussions about paving and specific street requests
such as Smith Lake Road, Booker and Cherokee Trail, stating that so far, they’ve been able to
avoid political decisions on which streets get paved and which ones don’t, they spend the money
where there is a need. Public Works Director Jeff Gauldin presented a PowerPoint detailing
street maintenance operation, street construction, funding, how the department works with
VDOT, and how priority paving is determined. Roads that are close to reaching the sub-base
are a priority on the paving list. Slurry seal is less expensive and can correct the road for up to
10 years and save on paving costs.
July 12, 2022 Council Meeting
Hear an update on the solar energy project for the City of Martinsville – Mayor Lawson
confirmed Council has already voted on this project but there were a few adjustments needed.
City Manager Towarnicki explained that this project was brought before Council in July 2020
but with COVID and the supply chain, the project was delayed. Tonight, there will be a refresher
of what was presented two years ago along with an updated presentation with pricing
information. Utilities Director Durwin Joyce presented a PowerPoint detailing the project,
July 12, 2022 Council Meeting
stating that things were moving along well until the supply chain issues and COVID occurred.
Joyce pointed out what has changed with the project since originally discussed. Joyce verified
that any maintenance or cost would be handled by Sun Tribe, Martinsville City is only the
customer. Turner expressed concern about the disposal of the panels after their lifespan in 40-
45 years and the increase of the current cost of electricity. Council Member Martin stated that
he would not be able to vote on this decision because of his employment. City Manager
Towarnicki explained that there is a tight schedule for the purchase of the property, without
Council’s commitment to the project then they will not have a “customer” and the project will
not be done. Joyce confirmed if Council does not approve the agreement the everyone “walks
away”. Joyce doesn’t expect to see the prices drop in the next 2-3 years so it wouldn’t be feasible
to request a second RFP from any other company about the project.
July 12, 2022 Council Meeting
Council Member Martin referenced the Freedom of Information Act that was reviewed by
Council Members at the previous meeting, specifically the section that allowed Council Members
to discuss contracts during closed session. The problem is when someone’s arrogance becomes
ignorance especially when it can cost the City money. Martin asked if Council could table any
public conversations about the City Attorney’s contract until August. Vice Mayor Bowles
requesting that Martin discuss this during his closing comments since it is not an agenda item.
Business from the Floor – Mike Sanguedolce of 708 Starling Avenue came to Council again
regarding truck traffic on Starling Avenue. He misunderstood that the street was paid for by the
City when in fact it is paid for by the state. He was told by VDOT that whoever maintains the
street has control of the traffic flow on that street. He has monitored truck traffic and if those
trucks would take Fairy Street, it would save them 3-4 miles. He was told that he could request
a traffic study from VDOT and if the road is deemed narrow or dangerous then they could alter
the truck route. Sanguedolce will be calling VDOT again to request that traffic study. Vice Mayor
Bowles applauds him for his due diligence. No one else approached the podium so Mayor Lawson
closed Business from the Floor.
Comments by City Council – Council Member Martin made a motion that any conversation
about the City Attorney’s contract be handled during closed session, tabling any public
conversation about this contract until August to protect City Council from any litigation. That
July 12, 2022 Council Meeting
does not stop Council from discussing the topic in Closed Session. Vice Mayor Bowles seconded
the motion. Turner said public officials are paid for by the public and should come under the
purview of the public, not closed-door discussions behind a smoke filled room; sunlight cleans
everything and that’s what we need here is transparency. Council Member Pearson said they
are not asking for the contract to be discussed in public but Council has made a motion to hire
an outside attorney to come in an renew and negotiate the contract on Council’s behalf. Martin
pointed out that Turner was in the same “smoked filled room” when the contract was discussed.
Closed Session is used as a process for Council to be able to utilize and is not a “back room
deal” as Council Member Turner has implied. Mayor Lawson confirmed that this is a personnel
matter as discussed previously. Vice Mayor Bowles, Mayor Lawson and Council Member Martin
voiced concerns about the topic being discussed in an open session, not that they are against
having the contract reviewed. Turner said that he wanted a point of order and that it is illegal.
Lawson explained that is it not illegal for Martin to request to table a topic. Turner said that it
was illegal to put his contract out of public venue until after it can be negotiated. Lawson
explained that the contract can be negotiated any day of the year, it does not have to be
negotiated by the end of July. Martin asked Turner to request a closed session meeting to
discuss the contract and to not use an open session to discuss personnel matters for public
scrutiny. Council does not discuss Human Resource topics in open session. Bowles, Lawson
and Martin voted to table the topic until August, Pearson and Turner voted against it. Motion
dies 3-2. Council Member Pearson requested to renew a motion. Lawson stated if the motion
was in relation to the City Attorney’s contract then all discussions are currently tabled. Pearson
said it was not directly related to his contract specifically; she made a motion to hire an outside
attorney using Council’s Professional Services line item regarding the rewriting and
renegotiation. Turner seconded the motion. Council questioned if the motion was needed on
action that was already in the works, Pearson feels the motion is necessary since they would be
spending City funds. Lawson and Bowles explained that the funds are already budgeted and
allocated. Pearson added that she wanted citizens to be aware of the request for an outside
attorney review and wanted the review to be handled prior to August 1. Turner seconded the
revised motion. Motion dies with a 3-2 vote: Bowles, Lawson and Martin against the motion,
Pearson and Turner voting for it. Pearson asked what was the procedure to request a special
closed session, Lawson explained that she simply had to request that and that a motion is not
needed. Pearson made the request to hold a special closed session prior to the next Council
meeting. Pearson offered a heartfelt welcome to the new businesses that have opened in
Martinsville. She knows the past few years being an entrepreneur and business owner have
been difficult so she commended business owners for keeping those doors open and being
successful. Pearson mentioned Lisa Watkins and the employees of the Martinsville Chamber of
Commerce, she has seen Watkins and her staff reaching out to businesses and offering
assistance to help businesses continue to thrive. Council Member has Turner been working with
July 12, 2022 Council Meeting
Les Adams and Morgan Griffith who have put Turner in touch with Chris Thompson, Director
of Strategic Housing and they discussed Martinsville’s housing needs. The City has budgeted
money to tear down houses but Turner wants to try and save as many houses as possible.
Thompson plans to bring his staff to the city along with the Congressman to tour City
neighborhoods and decide what programs may be available to draw money from and save some
of the houses for property owners, not more rental property. There are many avenues to access
money to put towards housing in Martinsville. Turner thanked Mayor Lawson for the
watermelon at the July 4th Mustangs game, it was a good day to honor local World War II
veterans. Vice Mayor Bowles supports Turner’s project and saving homes within the City.
Congratulations to the new businesses in the area. Congratulations Shatera Robertson, owner
of Unique Styles & Designs on her 1-year anniversary. This week is restaurant week in Uptown
Martinsville, several local restaurants gave $500 in coupons for citizens to use. Bowles thanked
Lisa Watkins of the Chamber for arranging the post legislative meeting with all of the City
delegates. Fireworks were cancelled this Friday because of rain but rescheduled for July 15.
The Martinsville-Henry County Coalition for Health and Wellness hosted a people’s choice art
show for children Kindergarten through 12 grades; Bowles encouraged residents to visit their
Facebook page, share and support local youth. At the last meeting, Bowles requested the
Commissioner of Revenue create a list of new businesses that have opened since 2014; Bowles
would like to make a motion on the request of the Commissioner of Revenue Ruth Easley, to get
consensus from Council that they would like to see a list of the new businesses, not renewed
businesses that have come to fruition since 2014. Council Member Martin seconded the motion
with all Council Members voting in favor. Bowles is requesting the number and the business
names to ensure the City is continuing to be prosperous. Mayor Lawson also mentioned that
the cancelled fireworks at the Mustang’s games would be rescheduled for this Friday July 15;
the Mustangs play tomorrow night July 13 and again Friday July 15. The City’s first TGIF event
will be Friday July 15 on Bridge Street. Lawson said there have been 7-8 ribbon cuttings for
new businesses in the past week. Flag Day will be July 27 which is also the Korean War
Veteran’s Armistice Day. Council said it was discussed during budget sessions about
community parks that needed updating, she is requesting Council discuss a plan of action on
how they will do that. Towarnicki explained that they are currently working with West Piedmont
for a grant that will facility that process and community input. Lawson said there was some
miscommunication last week in regards to Southside Park and the Dixie League players are still
playing thru Friday because some of the games were cancelled. These tournaments at Southside
Park could result in heafty investments into the community with families seeking lodging and
places to eat.
Comments by the City Manager – Towarnicki stated that there is a Council Calendar; anytime
the City Manager’s office receives details about open houses they update the schedule to keep
Council Members informed of upcoming events. Bowles requested a calendar invitation to easier
July 12, 2022 Council Meeting
view that information. Monday July 25 will be the Uptown/Druid Hills Neighborhood meeting
at Patrick Henry Elementary School.
Council reconvened to Closed Session
At the conclusion of Closed Session, each returning member of Council certified that (1) only
public business matters exempt from open meeting requirements were discussed in said Closed
Session; and (2) only those business matters identified in the motion convening the Closed
Session were heard, discussed, or considered during the meeting. A motion was made by
Bowles; seconded by Turner, with the following 5-0 recorded vote in favor to return to Open
Session: Council Member Turner, aye; Council Member Pearson, aye; Vice Mayor Bowles, aye;
and Mayor Lawson, aye. Martin returned to the meeting after the vote.
Vice Mayor Bowles made a motion to appoint Michael Williamson to the School Board for a
3-year term ending June 30, 2023; Council Member Martin seconded the motion with all Council
Members voting in favor.
Council Member Martin made a motion to appoint James Woods to the School Board for a
3-year term ending June 30, 2024; Council Member Turner seconded the motion with a 4-1 vote
with Bowles, Martin, Lawson and Turner voting for and Pearson voting against.
There being no further business, the meeting adjourned at pm.
______________________________________ ______________________________________
Karen Roberts, Clerk of Council Kathy Lawson, Mayor
Agenda
AGENDA--CITY COUNCIL
CITY OF MARTINSVILLE, VIRGINIA
Council Chambers – Municipal Building
6:30pm Closed Session 7:00pm Regular Session
Tuesday July 12, 2022
6:30 pm - Closed Session
Items to be considered in Closed Session, in accordance with the Code of Virginia, Title 2.2,
Chapter 37—Freedom of Information Act, Section 2.2-3711(A)—Closed Meetings, the
following:
A. Appointments to boards and commissions, as authorized by Subsection 1.
7:00 pm - Regular Session
Pledge to the American Flag and Invocation by Mayor Lawson.
1. Approve minutes from the June 27, 2022 Northside Neighborhood Meeting and the
June 28, 2022 Council Meeting. (5 mins)
2. Recognize City Employees who are eligible for Service Awards for the period April 1 –
June 30, 2022. (5 mins)
3. Consider a request from Henry County to fund a portion of one-time stipends for 911
and DSS employees. (10 mins)
4. Hear information from the Public Works Department regarding paving of City streets.
(20 mins)
5. Hear an update on the solar energy project for the City of Martinsville. (20 mins)
6. Business from the Floor -
The public comment portion of the Council meeting provides citizens the opportunity to discuss matters relevant to the operation
of the City, which are not listed on the printed agenda.
Citizens who wish to participate in a meeting’s public comment period may do so by emailing their comments to Karen Roberts,
Clerk of Council, at kroberts@ci.martinsville.va.us, calling in their comments to 276-403-5182, faxing comments to 276-403-
5280,or mailing comments to City of Martinsville, attn.: Karen Roberts, P.O. Drawer 1112, Martinsville, VA 24114. Comments
must be received by 12:00noon Monday July 11. Citizens may also request to speak at the Council meeting in the same manner.
Comments, or a request to speak, must be received by noon the day before a Council meeting for consideration by Council at the
meeting.
Any person submitting comments or requesting to speak must identify themselves by name and address, including zip code, limit
their remarks to 3 minutes or less (as read aloud), address a topic of City business, and refrain from making any personal
references or accusations of a factually false and/or malicious nature. Priority for comments is given to City residents, taxpayers,
and business owners. Speakers may not yield time. Groups of speakers on the same topic must designate a single
representative. Comments violating these rules may not be presented at the Council meeting. Any speaker violating these rules
may be removed from the podium or from the Council chamber.
This policy does not apply to public hearings, at which any citizen of Martinsville may appear and speak on the subject of the
public hearing.
7. Comments by members of City Council. (5 mins)
8. Comments by City Manager and City Attorney. (5 mins)
City Council
Agenda Summary
Meeting Date: July 12, 2022
Item No: 1.
Department: Clerk of Council
Issue: Consider approval of minutes
Summary: None
Attachments: June 27, 2022 Northside Neighborhood Meeting
June 28, 2022 Council Meeting
Recommendations: Motion to approve minutes as presented.
City Council
Agenda Summary
Meeting Date: July 12, 2022
Item No: 2.
Department: Human Resources
Issue: Recognize City Employees who are eligible for Service Awards for the
period April 1 – June 30, 2022.
Summary: The Service Award Program is designed to build individual morale and
show appreciation to the long-service employee for their faithful service to the City
of Martinsville.
SERVICE AWARD RECIPIENTS
SECOND QUARTER - FISCAL YEAR 21-22
FOR THE PERIOD OF APRIL 1 – JUNE 30, 2022
First Name Last Name Location YOS
GARRETTE MARTIN PUBLIC WORKS 5
MICAH LACKEY FIRE DEPARTMENT 5
CODY MOORE SHERIFF DEPT. 5
HARLEY DURHAM POLICE DEPT 10
DWAYNE ROBERTSON FIRE DEPARTMENT 10
DWAYNE SPENCER PUBLIC WORKS 10
JIMMY RIGNEY ELECTRIC DEPT. 15
MICHAEL LAW SHERIFF DEPT. 15
MARK PETERS POLICE DEPT 15
LAWRENCE CLARK SHERIFF DEPT. 15
MICHAEL CLARK POLICE DEPT 15
JEFFREY CORCORAN SHERIFF DEPT. 20
COMMISSIONER OF
DALLAS HAIRSTON REVENUE 20
CHRISTOPHER OWEN FIRE DEPARTMENT 20
CONNIE CANNADAY SHERIFF DEPT. 25
KEVIN TURNER SHERIFF DEPT. 25
Attachment: None
Recommendation: The Mayor will read the list.
City Council
Agenda Summary
Meeting Date: July 12, 2022
Item 3.
Department: City Manager/Finance
Issue: Consider a request from Henry County to fund a portion of one-time
stipends for 911 and DSS employees.
Summary: The City has received information from Henry County that one-
time stipends of $1,200 for full-time County employees has been approved, and
the intent is to also provide the County’s share of the stipends to employees of
both the 911 Center and the Department of Social Services. A request has
been made of the City to likewise consider funding its share of the stipends for
911 and DSS, in order to provide the full $1,200 amount.
The City and County currently jointly budget for costs of both 911 and DSS at
a calculated ratio of approximately 1/3 City and 2/3 County. The City’s
estimated share of the stipends will be $8,300 for 911 employees and $36,353
for DSS employees; a total of $44,653. During City budget discussions
regarding outside agencies and specifically 911, it was noted that jointly-
funded outside agencies are sometimes left out of discussions and
consideration for salary and cost of living adjustments.
Attachments: None
Recommendation: Staff recommends approval of the request. Information
will be presented at the meeting regarding possible funding sources.
City Council
Agenda Summary
Date: July 12, 2022
Item No: 4.
Department: Public Works
Issue: Hear information from the Public Works Department regarding
paving of City streets.
Summary: Public Works Director Jeff Gauldin will present information
regarding paving City streets, funding, and criteria used in determining the paving
schedule.
Attachments: Presentation materials
Recommendations: Presented for information purposes. No Council action
needed.
City of Martinsville
Street Paving & Resurfacing
Martinsville City Council Meeting
Tuesday, July 12, 2022 7 pm
Street Maintenance Operations
• Lane Miles: Arterial 66.11 miles, Local or Collector roads 157.63
• Annual street maintenance funding is calculated at a rate established by
the state, per lane mile. FY23 for Martinsville is $3,809,745.90
• Local Street Services:
• Street Maintenance
• Street Marking and Signs
• Traffic Signals
• Street Cleaning
• After the fixed costs for these functions are accounted for, costs for overhead, paving,
and equipment rental from Street Construction are used to balance.
Street Construction
• Street Construction is a separate City-funded function that is
a companion budget to street maintenance.
• For capital and new projects that fall outside of maintenance
• Street Construction “owns” the equipment used in street
maintenance operations and that equipment is rented or
leased to street maintenance, resulting in equipment rental
fees coming back to the City’s General Fund as revenue.
SGR vs Locally Funded Paving
• SGR (State of Good repair) is a separate VDOT-funded program
outside of normal street maintenance funding.
• SGR projects are main arterial roads
• Paving projects are selected based on VDOT rating criteria
• Higher priority is given to localities that spend %25 or more of
lane miles funding on paving
• City has successfully implemented a number of SGR projects
including sections of Memorial Boulevard and Starling Avenue.
Paving Determinations
• The need for paving City streets is evaluated by several main criteria;
• Condition of the road – Pavement appearance, alligator cracking, raveling,
potholes, patches and utility cuts
• Road traffic – amount and type (trucks vs residential traffic)
• Staff and customer input
• City streets are prioritized based on the criteria and a paving list is created.
Efforts are made to cover all areas of the City. Available funding determines
how many of the listed projects are done, with projects not funded serving
as the basis for the following year’s list.
Paving Determinations
• Due to the frequent need to mill existing streets before repaving, the
added cost reduces the amount of paving work that can be done.
• Several paving options exist including mill & pave, pave only, slurry
seal, and tar & gravel (chip seal). More slurry work will likely occur in
future, primarily in residential area where streets are structurally in
good condition.
If questions or for additional information
contact the City’s Public Works Department at
276-403-5154
City Council
Agenda Summary
Date: July 12, 2022
Item No: 5.
Department: Electric
Issue: Hear an update on the solar energy project for the City of
Martinsville.
Summary: In July, 2020, staff presented information to Council regarding
a solar energy project for the City of Martinsville utilizing the former Lynwood
golf course site on Dupont Road. The financials of the project as presented
were very beneficial for the City and after discussion, Council authorized staff
to proceed with execution of documents related to the project.
Since that time, a delay in the project implementation schedule has occurred
due to impacts of the Covid pandemic as well as supply-chain issues regarding
acquisition of solar panels. The original project schedule and costs have been
impacted resulting in the need for a revised power purchase agreement.
This matter will be presented again at Council’s July 26 meeting, but is being
presented at the July 12 meeting to provide Council with additional time to
review materials and ask questions.
Attachments: Presentation materials
Recommendations: No action required by Council at this meeting.
MARTINSVILLE SOLAR PROJECT UPDATE
Martinsville City Council Meeting
Tuesday, July 12, 2022 7 pm
Martinsville Council Meeting – Generation Projects
July 2020
2
SUN TRIBE / SOL SYSTEMS
SOLAR PROJECT
3
Historic Martinsville Solar Opportunities
Levelized Solar PPA Comparison
120
AEPEP: 2.5 MW AC, 25 yr term, 109.06
Behind-the-Meter (“BTM”) Solar generation sited on
Martinsville’s distribution system has been
110
reviewed several times over the past 5 years
Coronal: 2.5 MW AC, 25 yr term, 98.54
100 Local solar project feasibility has improved drastically
due to significant price improvements and larger
90 Inovateus: 2.5 MW AC, 25 yr term, 97.01 project size opportunities
Levelized PPA ($/MWh)
Radiance: 2.98 MW AC, 25 yr
term, 84.08
80 Sun Edison: 4 MW AC, 30 yr
term, 77.00 EDF (Landfill): 2.1 MW AC, 25
Turning Point: 2 MW AC, 25 yr
term, 72.51 yr term, 65.53
70
RES: 4.96 MW AC, 30 yr term, 72.44 O2: 4.0 MW AC, 25 yr term,
68.00 Strata (Golf Course): 4.0 MW AC, 25
yr term; $50-60, 55.00
60
Sun Tribe: 2.4 MW AC, EDF (Golf Course): 4.6 MW
AC, 25 yr term, 52.72
50 25 yr term, 63.00
40
Sun Tribe/Sol Systems (Golf Course): 8 MW AC,
25 yr term, 45.00
30
2014 2015 2016 2017 2018 2019 2020 2021
4
What Are the Benefits of
Distributed Generation in the PJM Market?
$8 AEP Transmission Rate
6.69
$6
Capacity & Transmission Cost Offsets
$/kW-mo
$4 • Peak shaving with distribution level generation reduces
the peak billing determinants for the following year and
$2 associated costs
• Transmission peaks are based on only 1 hour
$0 occurring in either Winter or Summer
• Capacity peaks are based on 5 hours, all occurring
during Summer
PJM Market Capacity Price
$6
Other Benefits
$5.30
$5 $5.01 • Congestion Cost Offsets: Distribution level generation is
$4.26
already delivered behind the substation meter, so there is
$3.83 $4.15
$4 $3.40 no potential to incur hefty congestion premiums as there
$/kW-mo
$3.65
$3.35 would be with hedges at various delivery locations
$3 $3.10 $2.98
• PJM Admin/Ancillary Service Offsets: Distribution level
$2.34 generation avoids PJM admin and ancillary service fees
$2
$1.24 $1.81
• Local Presence: Distribution level generation is local,
$1 $0.84 which can provide social benefits in the form of positive
$0.50 publicity and customer approval
$0
5
Behind-The-Meter Generation Benefits
▪ Solar sited Behind-The-Meter (“BTM”) on Martinsville’s distribution system includes
benefits in the value of avoided capacity, transmission and ancillary services costs as
well as Solar Renewable Energy Credits (“SRECs”)
Levelized Behind-the-Meter Offset (Estimated)
Avoided Cost* Golf Course
Capacity $14.58
Transmission $25.69
Ancillary $0.50
SREC $4.00
Total ($/MWh) $44.77
▪ SREC sales into the PA Tier 1 market are available (~$6/MWh)
PA Tier 1 Market
7.00
6.00
$/REC 5.00
Source: SNL
4.00
11/2/2018 12/2/2018 1/2/2019 2/2/2019 3/2/2019 4/2/2019
5
*Assumes 25-year term NPV ($/MWh) using a 3% discount rate
Martinsville Solar RFP
Timeline
▪ May 2019 – RFP issued on behalf of Martinsville and
Central Virginia Electric Cooperative (“CVEC”) as part of
Blue Ridge Power Agency (“BRPA”) joint involvement.
▪ Solar Use Case: Provide renewable energy, while avoiding AEP Key Project Details
transmission and PJM market capacity
▪ Jul 2019 – Received indicative bids from 26 developers for Solar
Stand-Alone Solar for supplier-selected sites
▪ Aug 2019 – Narrowed developer list to 14 preferred and Size 8 MW
experienced developers based on favorable pricing,
experience, and high-level review of proposal and Term 25 Year
competency
▪ Oct-Dec 2019 – Declared short-listed of 6 developers Site Golf Course
based on qualitative and quantitative review, offered site
visits, and received refreshed pricing COD Q2 2021
▪ Jan-Feb 2020 – Declared top 3 developers based on
refreshed proposal and qualitative review, requested
refreshed pricing based on technology specifications and
key PPA contract terms
▪ Jun 2020 – Selection and Negotiation of PPA with
Sun Tribe (Developer) / Sol Systems (Investor)
7
Project Site
Golf Course
Developer/Investor will take ownership of Golf Course site
8
Sun Tribe/Sol Systems - Golf Course Solar Project
PROJECT DETAILS
▪ Project Size: 8.0 MW
▪ Proposed Year-One Gen: 17,680 MWh
▪ Proposed Capacity Factor: 25%
▪ Term: 25 Years
▪ Annual Energy Hedge: 10% of Martinsville’s
annual load requirements
▪ COD: Guaranteed Q2, 2022
▪ Site Ownership: Developer-owned
▪ Technology: Bi-facial, single-axis
▪ SRECs: City retains all environmental
attributes
▪ Pricing: $45.00/MWh flat rate PPA with no
annual escalation
9
Sun Tribe/Sol Systems Solar Project Economics
Base Case Solar
$55
$50 $45.84
$45
$40
$35
$30
$/MWh
$25
$20
$15
$10
$5
41 8 6 4 3 2 1
$0
0 -1 -1 -1 -1 -2 -2 -2 -2 -3 -3 -3 -3 -4 -4 -4 -4 -5
-$5
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045
Net Energy Rate Transmission Offset Capacity Offset
25-Year NPV:
SRECs Ancillary Services Offset PPA Rate + MISC Costs
$1.07/MWh
MISC Costs include interconnection and potential land costs 9
Regulatory Considerations:
Behind-the-Meter Generation Limits
• PJM is reviewing the process and procedures for enforcing current Non-Retail Behind-the-Meter
Generation (“NRBTMG”) limits and thresholds.
• NRBTMG thresholds have been in place for years, however, there has been limited enforcement and
reporting requirements
• In order to ensure NRBTMG benefits, behind-the-meter capacity should be installed and reported to
PJM before the thresholds are reached
NRBTMG Statistics
Current NRBTMG* 1,171 MW
Annual Threshold 2,051 MW
Total Cap 3,000 MW
• If total cap is met, all further NRBTMG
will not receive BTMG benefits (capacity,
transmission, etc.)
*As of November 2019 10
Sun Tribe/Sol System Solar Project Economics
Alternative Case: 50% Capacity/Transmission
$55
$50 $45.84
$45
$40
$35
$30
$/MWh
$25
$20
$15
$10
$5
41 25 24 23 22 22 21 20 20 20 20 20 20 20 20 19 19 19 19 19 19 19 19 18 18
$0
-$5
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045
Net Energy Rate Transmission Offset Capacity Offset
25-Year NPV:
SRECs Ancillary Services Offset PPA Rate + MISC Costs
$21.20/MWh
MISC Costs include interconnection and potential land costs 11
Annual Golf Course Solar Project Costs
$50
$40
$30
$/MWh $20
$10
$0
-$10
Gross Project Rate Base Case Solar Alternative Case: 50% Capacity/Transmission
Base Case Solar Alternative Case: 50% Capacity/Transmission
Average ($/MWh) 2022 2045 Average ($/MWh) 2022 2045
Gross Project Cost [1] $45.84 $45.84 Gross Project Cost [1] $45.84 $45.84
Transmission Credit [2] ($20.20) ($28.56) Transmission Credit [2] ($10.10) ($14.28)
Capacity Credit [3] ($13.31) ($17.52) Capacity Credit [3] ($6.66) ($8.76)
Ancillaries Credit ($0.50) ($0.50) Ancillaries Credit ($0.50) ($0.50)
SREC Credit ($4.00) ($4.00) SREC Credit ($4.00) ($4.00)
Net Project Cost $7.83 ($4.74) Net Project Cost $24.58 $18.30
1/ Reflects 25-year term proposal incl. land & interconnection costs with 1/ Reflects 25-year term proposal incl. land & interconnection costs with
0%/yr. escalation. 0%/yr. escalation.
2/ Reflects 41% transmission peak offset. 2/ Reflects 21% transmission peak offset.
3/ Reflects 56% capacity offset. 3/ Reflects 28% capacity offset.
12
Golf Course Solar Project vs Market
Average
$/MWh
(2021-2029)
$45 Solar-Weighted Market Energy Price $29.58
Base Case Solar $6.99
$40
Alternative Case: 50% Capacity / Transmission $24.16
$35
Solar Weighted Market Energy Price
$30
Alternative Case: 50% Capacity/Transmission
$25
$/MWh
$20
$15
$10 Base Case Solar
$5
$0
-$5
AEP-Dayton Hub On-Peak LMPs sourced from SNL as of 7/8/2020 13
Key PPA Terms
▪ In-Service Date: Guaranteed COD by June 2022 (or penalties apply)
▪ Seller Security:
▪ Pre-COD: $50,000/MW
▪ Post-COD: $30,000/MW
▪ Delay Damages: $2,000 Per Day ($250 Per MW-Day)
▪ Performance Guaranty: 90% annual average production, weather-adjusted
▪ Underperformance Penalty: $40/MWh
▪ Option to Extend: After 25 year term, Martinsville has two 5-year options to
extend term at 50% of the PPA price at their sole discretion
▪ Land Option:
▪ Although SunTribe /Sol Systems will purchase and own the Golf Course Property, Martinsville
will have the right to access the property and build a battery storage/peaking project at a
nominal land lease cost, if desired
▪ Solar PPA price may adjust upwards by no more than $0.32/MWh to cover Martinsville’s share
of cost responsibilities
14
What’s Happened Since July, 2020
• Unanticipated Covid impact and supply chain issues resulted in an inability
to acquire solar panels at the schedule and cost as outlined in the original
proposal.
• Delays are resulting in price escalation of $15 to $20/MWh from the
original PPA of $45/MWh. Details of the Purchase Power Agreement are
being finalized and will be presented for Council’s consideration at the July
26 meeting.
• Even with the anticipated price escalation, factoring in transmission &
capacity savings along with ancillary services costs and SRECs, this will still
be a beneficial project for the City of Martinsville and staff will be
recommending approval of the PPA at the July 26 meeting.
• City has completed construction of a new electric line from the golf course
site with a connection to the City’s grid at Memorial Boulevard.
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