The City of Flagstaff may soon begin purchasing renewable energy credits from the Navajo Tribal Utility Authority (NTUA) rather than from Arizona Public Service (APS). The switch would save the city about $20,000 annually, based on current prices.

Sustainability director Nicole Antonopoulos presented the option during the City Council’s work session on Tuesday, April 28. The council did not take any formal action, and a future vote would be needed to approve a switch in energy credit sourcing.

Renewable energy credits (RECs) “allow buyers to claim the use of renewable energy, even if their electricity comes from the regular electric grid,” as Antonopoulos’ presentation noted. A single REC represents the environmental attributes of one megawatt-hour of clean electricity, and RECs can be sold together with or separate from the actual electricity itself.

The city currently purchases RECs along with electricity from APS, spending about $97,400 annually on the credits. APS charges $2.50 per megawatt-hour (MWh), and NTUA is offering a lower rate of $1.85 per MWh. Factoring in a 6% sales tax, the city’s total if purchasing from NTUA would fall to about $76,500.

“In the short term, we would recommend transitioning to purchasing RECs through NTUA,” Antonopoulos told the council.

In the longer term, the sustainability division is still considering the possibility of a virtual power purchase agreement as part of a consortium of Arizona entities — a somewhat complicated long-term contract that could help lock in a stable price for RECs. (The Arizona Daily Sun reported on that option last year.)

The city also continues to pursue on-site solar power generation and potential battery storage, Antonopoulos said. Her presentation slides noted the possibility of solar generation at the city’s Red Gap Ranch property, about 40 miles east of Flagstaff, but Antonopoulos did not mention this option in her remarks.

Anthony Cadorin, deputy general manager at NTUA, told the council that the RECs offered for sale would most likely come from the utility’s allocations of RECs from hydroelectric generation on the Colorado River, though NTUA also operates multiple large-scale solar projects and is in the process of developing more solar capacity.

Mayor Becky Daggett asked Cadorin if the ongoing and unresolved negotiations over Colorado River water are a concern for NTUA. Cadorin said the uncertainty is indeed concerning, but the utility’s capacity to provide RECs at the scale sought by Flagstaff (about 38,000 MWh per year) should not be impacted.

“It’s one of those things that’s kind of out of our hands,” he said of the negotiations. “We will have to adapt, like everybody else.”

Council member Lori Matthews asked Antonopoulos if the city’s renewable energy strategy had changed in response to new wind power development on the Babbitt Ranches north of Flagstaff. Antonopoulos said it had not, but that the division was excited to see those projects coming online.

The other members of the council did not have any additional questions for Antonopoulos or Cadorin. A date for a potential vote on the topic has not yet been confirmed.