DERBY — State utility regulators won’t give a “commissioning milestone extension” guaranteeing preferred electricity rates for the Derby Line Wind Project, effectively ending the financial viability of a single industrial turbine on the Grand View Farm.
The Vermont Public Service Board says, in a memo issued Friday, that Encore Redevelopment gambled and lost in pursuing a certificate of public good for the original two-turbine project on farms in Derby near Derby Line, Holland and Stanstead, Quebec. The board said the developer had an aggressive schedule, took the risk and in the end didn’t have enough time to get a certificate of public good for the project before the preferential rates deadline ran out and shouldn’t be given more time.
Encore has spent several hundred thousand dollars on the application so far. Chad Farrell, the head of Encore, has said that the preferred electricity rates are needed for the project to continue.
Opponents view the decision as a win and the end to the Derby Line Wind Project.
The commissioning milestone is part of the state’s special program designed to encourage small renewable energy projects and by requiring Vermont utilities to pay a higher rate in a standard-offer contract for the electricity generated by these qualifying projects.
The intent, the PSB said, is for “rapid deployment” of small projects like one industrial-grade turbine on a farm.
The deadline for commissioning the single turbine on the Grand View Farm owned by Bryan and Sue Davis is January 2013, not enough time to secure a permit. Encore pulled the application for the Grand View Farm turbine and announced it would no longer pursue a second turbine closer to the Canadian border. Encore then asked for a two-year extension of the commissioning milestone in hopes of reapplying for approval next year.
The Public Service Board refused.
During the course of the effort in preparing to seek state permission to raise the turbines, the original development partner sat on the opportunity before Encore took it over last year. Then Encore took longer than expected to file an application, failed to notify all the abutting landowners, including Canadian property owners, and suffered a series of setbacks — including a snow storm that pushed a hearing back by a month this spring.
Meanwhile, opposition that was nearly non-existent in the summer of 2011 mounted. Now, the towns of Holland and Stanstead and the village of Derby Line oppose the project and a majority of the Derby select board are opposed to it.
The PSB noted all that in its memo, stating that Encore’s schedule was “extremely aggressive.”
“Notwithstanding the question of whether Encore has made reasonable efforts to obtain board approval, Encore knowingly took ownership in February 2012 of a standard-offer contract that contained a requirement that the project be commissioned on Jan. 15, 2013,” the board stated in its memo.
“In doing so, Encore took a risk that it could obtain approval and construct a wind generation facility in one year. The decision to take that risk was within Encore’s control.
“If the board were to evaluate requests for milestone extensions based solely upon the actions taken once a particular entity was assigned a standard-offer contract, the milestone in the contract would be essentially meaningless and would open the door for gaming the milestones,” the board stated.
An extension caused by passing the commissioning milestone from one developer to another would simply allow developers to restart the clock without consequences, the board noted.
“Such a possibility runs counter to the purpose of the milestones, which are to require rapid deployment of standard-offer projects …”
In its arguments, the PSB took up the case as presented by Richard Saudek, attorney for the town of Stanstead in opposing the extension of the commissioning milestone.
Saudek argued that Encore made “a poor bet” when assuming control of the project so close to the milestone deadline.
“Further as a matter of public policy it would be inappropriate to allow one developer to sit on its rights and then sell to a new developer, thereby giving the new developer the argument it wasn’t his fault and therefore the time should be extended,” Saudek wrote.
“A developer shouldn’t be allowed to come in late and have the clock start ticking again,” he concluded.
The PSB agreed with that.