December 28, 2011
Massachusetts

Blackburn turbines pegged at 255 feet

By Steven Fletcher, Staff Writer, Gloucester Times, www.gloucestertimes.com 28 December 2011

The pair of wind turbines that Equity Industrial Partners will build at the Gloucester Engineering facility will each stand about 255 feet tall and generate about two megawatts of electricity each, according to a study on the turbines by the Cadmus Group.

That study was submitted in October during the City Council’s approval of the special permit for the project.

The two turbines will cost about $11 million, according to the company’s initial estimates in August.

Equity, a Needham based development company that owns industrial properties nationwide, including the Blackburn Industrial Park property that is home to Gloucester Engineering, has until the end of the week to spend 5 percent of its investment in the turbines if it wants to make the deadline for state and federal tax breaks.

Equity Industrial Partners did not return calls for comment on this story, yesterday.

The company will use the turbines to power the Gloucester Engineering factory, and will sell energy to the city at a discount rate. The city will buy power from the company for 25 years according to the power purchase agreement Mayor Carolyn Kirk signed with the company last week.

The turbines have an estimated four-month construction time. Once built, they are expected to produce more than the roughly 11 million kilowatt hours the city uses to operate municipal and school district facilities.

Mayor Carolyn Kirk had said that buying power from the Equity turbines will be a roughly $11 million benefit to the city over those years.

City Chief Administrative Officer Jim Duggan said Tuesday that the city decided to become a dedicated customer for Equity’s project rather than build its own turbines. Buying power at a discount from a third party, gives the city the most benefit for the least amount of risk, he said.

The city is projecting it will save $450,000 in the first year alone, said Duggan. The savings will cut into the city’s $1.2 million electric bill.

The 25-year power purchase agreement is contingent on a payment-in-lieu-of-taxes agreement. The company, said Duggan will pay the city $40,000 next year, with a 2.5 percent increase as the years go on.

According to the agreement, the first 9 million kilowatt-hours produced by the turbines would be sold to the city at 20 percent below market rate for kilowatt hour of electricity. Any energy produced above that threshold, but below the total needed by the city, would be sold at a 75 percent discount, according to the agreement.

Any energy produced beyond what the city uses would be sold at a 100 percent discount – meaning that excess energy would become credits that the city would not have to pay for, but which could be sold back to utility companies like National Gird.

Duggan said the city is still working out what it will do with the extra credits, [ends]