EPA Publishes Case Study of Solar Farm Located on Sacramento, CA Superfund Site

The Aerojet General Corp. Superfund site (“Site”), located in Sacramento County, is 5,900 acres and located roughly ½ mile from the American River. Aerojet acquired the property in 1953 to develop, manufacture, and test liquid and solid propellant rocket engines for military and commercial applications. In addition, the Cordova Chemical Company operated chemical manufacturing facilities on the site from 1974 to 1979. Both companies’ practices led to soil and groundwater contamination, including trichloroethylene (TCE) and perchlorate. Starting in 1979, these contaminants of concern (and others) were found in off-site private wells, in the American River, and in off-site drinking water wells.

Remediation began in the mid-1980s and five groundwater extraction and treatment facilities were installed for containment purposes. Each facility consists of multiple extraction wells and a groundwater treatment system. These facilities have pumped and treated over 100 billion gallons of water, a process requiring significant energy use. Aerojet was interested in reducing its energy costs, and reducing the environmental footprint of the Site’s remediation. The result is a solar power project made possible by partnerships with public and private entities.

In a case study, dated July 2010, EPA Region 9 discusses the key factors, tools, and partnerships that led to the development of a solar energy farm over 40 acres of the Site. Aerojet partnered with Solar Power Inc. and the Sacramento Municipal Utility District (SMUD) in a coordinated effort with EPA and state regulators. Initial planning began in 2008, and the solar farm was constructed in 2009 and 2010.

The benefits of the solar farm, as expressed by Ronald Samborsky, Aerojet’s Vice-President of Renewable Energy and Sustainability, are that they have found a beneficial use for otherwise encumbered property, reduced energy costs, and reduced the environmental footprint at the Site. However, Aerojet’s Sustainability Manager, Michael Girard, admits that “[w]ithout SMUD’s collaboration, there would not have been a project,” explaining that SMUD’s incentive program and advice made the project possible. EPA reported that SMUD agreed to finance approximately $13 million of the project’s $20 million cost over a 10-year period. EPA was consulted on the project, pursuant to the terms of the site’s Partial Consent Decree. Aerojet also contacted the California Department of Toxic Substances Control and the California Environmental Protection Agency’s Central Valley Regional Water Quality Control Board, who provided comments.

The next crucial piece was finding a private sector, solar energy developer to provide investor financing and to build the solar farm. Aerojet selected Solar Power, Inc. after a competitive proposal process, due to Solar Power, Inc.’s experience with photovoltaic (PV) solar systems, financing network, and cost-effective approach. Solar Power, Inc. self-financed the first phase of the project to strengthen investor confidence impacted by the global financial crisis, but was eventually able to find investors. Aerojet and Solar Power, Inc. developed a Solar Power Purchase Agreement (SPPA), an arrangement where the solar power developer owns, operates, and maintains the PV solar farm, while the host customer sites the system and purchases its electric output. Aerojet and Solar Power Inc.’s SPPA provides that Solar Power, Inc. is responsible for building, operating, and financing the project, and provides that Aerojet indemnifies Solar Power, Inc. so that it is not liable under Superfund for the Site’s contamination or cleanup costs.

With a SPPA, there are potential benefits and concerns. Benefits to the host include no upfront capital cost, predictable energy pricing, no operating risk, and a reduced carbon footprint. The potential concerns include the risk that negotiations can be complex, so there are potentially higher transaction costs than buying the PV system outright, and that the system might not meet 100% of the site’s electricity demand, resulting in administrative costs to pay separate electricity bills.

Aerojet now hosts the largest, single-site industrial solar farm in California. Twenty-two solar arrays track the course of the sun and generate 6 megawatts of power, more than 20% of Aerojet’s energy demand to operate the ground water remediation program. EPA estimates that 4,000 tons of carbon dioxide and three tons each of sulfur dioxide and nitrogen dioxide will be offset by the solar installation at the Site. Aerojet has formed an Executive Sustainability Council and is working with Solar Power, Inc. and SMUD to explore further potential opportunities.