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County officials butt heads with voters over Cape and Vineyard Electric Cooperative  

Credit:  By: Michael C. Bailey, The Enterprise, www.capenews.net 17 June 2011 ~~

To supporters, the Cape and Vineyard Electric Cooperative is dedicated to responsibly developing renewable energy projects across the region in the name of reducing costs to Cape Cod residents.

To its detractors, it is a secretive and thinly veiled quasi-county governmental branch that is trying to force wind turbines on an unwilling populace.

So far, neither side has convincingly proven its case to the other, nor does either side show any signs of backing down.

The cooperative has recently become the elephant in the Barnstable County Board of County Commissioners’ meeting room, thanks to a small but vocal group of citizens who have for several weeks pressed the commissioners to fully reveal the cooperative’s inner workings.

Despite repeated requests for a formal discussion, the commissioners have not placed the topic on their meeting agenda, and last month clamped down on what may be addressed during the public forum portion of their meetings—a move that the cooperative foes viewed as an attempt to shut down their efforts.

Preston G. Ribnick, a Wellfleet resident and founder of the anti-wind turbine grassroots organization WindWise, has been perhaps the most vocal of these critics, and at last week’s board meeting, his frustration with the commissioners boiled over.

“Today marks the eighth consecutive meeting of the county commissioners” at which members of the public have asked for a formal discussion about the cooperative, Mr. Ribnick said. “Despite numerous assurances by Commissioners [Mary L. (Pat)] Flynn and [Sheila R.] Lyons that this body would address these issues, the chairperson—the chairman, [William] Doherty—has still not placed this item on the agenda and evidently refuses to do so.

“Do something. Do your duty. Respond to the concerns of the public rather than ignoring them,” he said.

The commissioners have asked the cooperative officials to host a public forum so the public can receive immediate answers to their questions, but that forum has yet to be announced.

History Of The Cooperative
Critics’ concerns focus on whether the cooperative and its sister organization, the Cape Light Compact, are operating within legal parameters when it comes to funding renewable energy projects on Cape Cod—specifically, land-based wind turbine installations.

The Cape Light Compact was established by an inter-governmental agreement in 1997 to serve as the Cape and Martha’s Vineyard’s electricity aggregator—the entity that purchases and delivers power for the region—and administrator of energy efficiency programs. Every town on the Cape and Vineyard is a member of the compact.

The compact receives funding for its operating budget through administrative charges attached to electric rates paid by Cape consumers, the county budget, and state and federal grants. A “conservation charge” that appears on Cape Codders’ electric bills directly funds energy efficiency programs administered by the compact.

Granting communities the ability to directly spend energy efficiency funding through a municipal aggregator, rather than having it doled out to them by the state, was granted in 1998 when Massachusetts deregulated electric and gas utilities.

The cooperative was formally incorporated as a not-for-profit entity in 2007. At the time of its formation, the cooperative was openly touted as a sister agency to the Cape Light Compact that would focus on renewable energy development.

“The cooperative’s purposes include developing and/or owning renewable electric generation facilities and procuring and/or selling long term electric supply,” the cooperative’s mission statement reads.

The cooperative also openly states that one of its long-term goals “is to develop a 20 to 30 turbine wind farm throughout member communities on the Cape and Vineyard in the next five to ten years.”

It has already made significant progress toward a related goal: establishing at eight sites across the Cape and Vineyard photovoltaic cell installations that will, when complete, generate 916 kilowatts of energy. Installations are already up and running at seven sites, including in Barnstable and Bourne.

The organization’s initial membership was Barnstable County, the Town of Barnstable, and the Cape Light Compact. It currently boasts as members 19 towns on the Cape and Islands, including Barnstable, Bourne, Falmouth, Mashpee, and Sandwich. Representatives from each of those member towns, the county, and the compact comprise the voting membership of the cooperative’s board of directors.

Conflict Of Interests?
One of the questions raised by the cooperative’s critics, most of them residents of the Mid- and Lower Cape, is whether it was appropriate for E. Mark Zielinski, county administrator; Margaret Downey, assistant county administrator and administrator of the Cape Light Compact; and Mr. Doherty to also have a hand in the cooperative’s operations.

Each of the three sit on the the cooperative board of directors, and Mr. Doherty is currently chairman. They are all voting members of their respective boards, but do not possess any sort of supreme authority over the compact or the cooperative.

Mr. Ribnick is among those who have questioned the appropriateness of their membership in the cooperative due to the fact that, in their capacities as county officials, they have direct oversight over county funds—funds that Mr. Ribnick and others believe have filtered down inappropriately to the cooperative via the Cape Light Compact.

According to the cooperative bylaws, there are no restrictions on who may serve on the cooperative’s board of directors or executive committee beyond what is outlined in the state’s conflict of interest law. That law restricts participation by anyone who stands to realize direct financial gain from any business transaction he would, as a board member, vote on—for example, if the cooperative were to contract with a company owned by a board member.

Mr. Doherty has rejected a call by Mr. Ribnick to recuse himself from any of the cooperative discussions during commissioners’ meetings. Mr. Doherty was adamant that there was no legal conflict of interests affecting himself, Mr. Zielinski, or Ms. Downey, as none of them are connected to a business interest that could benefit from any compact or the cooperative projects.

Yet even as residents chastise county officials for wearing too many hats, they have chided the commissioners for failing to exercise any authority over the compact. Barnstable County is under contract with the compact and the cooperative to handle certain administrative functions, but county officials claim they have no statutory authority to exert direct control over the organizations.

“This statement is false,” Mr. Ribnick said to the commissioners last week, insisting that county officials can demand to see official compact and the cooperative financial documents. The charter grants the county the power to “supervise the collection of all Cape Cod Regional Government revenue and disbursement of funds.”

In a phone interview conducted this week, Ms. Downey clarified that Barnstable County “acts as the fiduciary agent for the Cape Light Compact…the county performs the treasury functions” through an “administrative services agreement” between the county and the compact.

The county’s only direct influence over the compact or the cooperative, she said, is through the county’s voting representatives to their respective boards of directors.

Ms. Downey added that the county commissioners always have the option of withdrawing from the administrative services agreement—and of removing her as the compact administrator by changing her job description. At that point, the decision of who would act as the compact’s fiduciary agent would be entirely upon the board of directors.

Can The Compact Fund The Cooperative?
Accusations of conflicting interests extend to the cooperative’s and the Cape Light Compact’s respective missions. Eric Bibler, a Weston, Connecticut, resident and president of the Wellfleet-based Save Our Seashore—an organization dedicated to preventing wind turbine development within the Cape Cod National Seashore—claimed that the two entities, despite their connection, have markedly different purposes.

Mr. Bibler claimed the compact is explicitly precluded from acting as a developer of energy sources—that the compact’s own articles of incorporation grant the compact no authority to directly or indirectly participate in the actual development of energy generation. Therefore, he maintains, the compact has no authority to spend its money on the cooperative projects.

Mark J. Cool, a Falmouth resident who has spoken out strongly against Falmouth’s town-owned wind turbines, told the county commissioners at their May 4 meeting that the compact’s funding transfers to the cooperative amounted to an inappropriate use of ratepayer-generated revenue.

“The compact is a county department. The county is the financial agent providing administrative oversight and supervision. This means the compact is held accountable to ratepayers like myself through the county commissioners to spend my money wisely,” he said, “and as a ratepayer, I demand my money not be squandered.”

Since the cooperative’s formation, $1.52 million has been transferred from the compact to the cooperative for renewable energy projects, those transfers approved by a majority vote of the compact’s board of directors.

The compact’s articles of incorporation do not expressly allow or preclude the expenditure of compact funds in such a manner. This loophole was effectively closed by the creation of the cooperative in 2007.

In a request for proposals titled “To Investigate Opportunities for Forming a cooperative, For the Cape Light Compact,” issued in 2006, the compact’s purpose is defined as to serve as a power aggregator for its member towns, as an advocate and provider of energy efficiency programs, and to “facilitate or undertake the construction and/or operation of renewable energy and other distributed generation projects, including possible ownership.”

The cooperative was formed to act as the vehicle for that last goal, and upon its formation, the compact provided the cooperative with a $520,000 grant—that funding originating from ConEdison Solutions, which is the compact’s current power provider.

The compact has twice more provided the cooperative with funding, two transfers of $500,000 each. Mr. Bibler maintains that the money was transferred to cover a growing deficit in the the cooperative budget.

According to documents from the cooperative and compact available online, as of the end of Fiscal Year 2010, the cooperative was running a $96,952 deficit; it recorded approximately $540,000 in income, $500,000 of that coming from the compact, and spent $637,399, the bulk of that ($370,412) going to legal expenses. Engineering expenses and consulting fees accounted for approximately $200,000 in costs.

According to its financial statements for FY08 through FY10, the cooperative ended only FY09 in the black.

County officials said the transfers were made to cover legal, planning, and engineering expenses tied to a number of pending renewable energy projects, including wind turbine projects that have not yet come to fruition.

Ms. Downey said she did not regard this use of compact funding as inappropriate—or unprecedented, noting that in the compact’s startup phase between 1997 and 2001, when the compact started to receive its energy efficiency money, the compact was funded entirely out of the county general fund.

County officials conceded that the compact may never recoup its investment. According to meeting minutes available online, the compact board considered the money a no interest loan that would be repaid only if and when the cooperative’s renewable energy projects became reality and started to generate revenue.

Brewster: The Catalyst
One such project, sited in the Town of Brewster, may be the root cause of all the recent intense scrutiny of the cooperative.

The cooperative is working to erect two 410-foot, 1.8-megawatt turbines in Brewster, which could reap significant financial benefits as the project’s host community. Under the cooperative’s proposal, half of the power generated by the turbines would go directly to Brewster town buildings and half would go to the cooperative’s member towns. Brewster would realize $3.6 million in energy savings over 15 years, according to the cooperative estimates, and would receive a $50,000 annual lease payment.

Robert P. Mahoney, a Dennis resident who served as chairman of the compact’s board of directors for 11 years, said in a recent letter to the county commissioners and the Barnstable County Assembly of Delegates that anti-turbine sentiments in Brewster were the true driving force behind the attacks on the cooperative.

“It is my opinion that the request to conduct an investigation of the compact and the cooperative is a subterfuge for the real issue; which is to prevent the cooperative from pursuing the Brewster Wind Project,” Mr. Mahoney wrote. “The strategy being employed by the opponents to the Brewster Wind Project is a simple and proven strategy, ‘attack the entity in an attempt to discredit and cut off funds for moving forward.’ ”

Source:  By: Michael C. Bailey, The Enterprise, www.capenews.net 17 June 2011

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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