SHELBY – Members of Shelby City Council approved a series of legislation last Monday to proceed with the second phase of the city’s behind-the-meter renewable energy projects.
Three resolutions were passed unanimously, entering the city into an agreement with American Electric Power (AEP) OnSite Partners for a 10 megawatt battery energy storage system.
AEP OnSite Partners was established in 2015 and provides technical expertise, market knowledge and investment capital for a geographically diverse array of energy projects, according to its website.
John Ensman, the city’s director of utilities, said the project will complement Shelby’s 2.5 megawatt solar array, a 14-acre site off of State Street, which became operational in 2019.
AEP OnSite Partners unveils solar array
The solar array consists of nearly 7,000 370-watt photovoltaic panels, which convert light into energy and provide benefits during peak power events.
“This project has been in the making for several years,” Ensman said. “A study was completed in 2021 to make sure the batteries were a good fit for our overall future energy portfolio.”
He said during the solar array design, space was left undeveloped to leave room for the battery storage system.
Third Ward Councilman Garland Gates said Shelby City Council always knew the solar array was only phase one of the city’s renewable energy efforts.
“Part two is going to be this battery backup system,” he said. “It’s not quite here, but it’s on its way and the city of Shelby is going to be better for having it.”
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AEP OnSite Partners will own, operate and maintain the battery system on the 14-acre State Street property, as they do the solar array.
“Both projects will work together to support Shelby’s energy needs and most importantly, reduce the city’s electric transmission and capacity charges,” Ensman said.
Transmission and capacity charges are major contributors to the overall cost on monthly power invoices the city receives from AEP, he said.
Joe Glanzman, AEP OnSite Partners director of business development, said he’s excited to expand the company’s partnership with Shelby into a second phase.
“These transactions don’t happen without strong partnerships,” he said. “We’re excited about investing money in this community again.”
Battery storage system designed to keep rates ‘under control’
The 10 megawatt battery system will consist of a series of six storage cells. The flow of energy will be connected to the city’s electric distribution system.
Ensman said when the system requires energy stored in the batteries to be released, AEP grid operators will discharge the energy onto the city’s electric distribution system.
“Discharge events will focus on transmission and capacity curtailments, as well as electric grid support to help maintain grid reliability,” he said.
To put the amount of energy into perspective, Ensman said one megawatt can supply electricity to approximately 750 homes at one time.
The city’s electric demand during peak events is approximately 20 megawatt, he said.
Ensman said the city’s annual cost for the project is still being determined.
He said the battery storage project has a projected savings of nearly $12 million over a 15-year agreement with AEP OnSite Partners.
“The annual savings is designed to help hedge other future influences that would otherwise increase the rates,” he said.
“The batteries are not an overall safety net against future rate increases, but are designed to play an important role in keeping the rates under control.”
Anticipated operation date for battery energy system
Once the agreements are officially signed by both parties, AEP OnSite Partners will purchase the battery energy storage system. It will take approximately 10-12 months for the batteries to arrive.
Ensman said the anticipated commercial operation date for the battery energy system is January 2025.
“The battery and solar projects were designed to help keep electric rates stable the best that they can,” he said.
“There are other factors in the overall cost for the delivery of reliable power to the community that will have impacts on the electric rates. These projects are solid resources to help hedge against future increases.”