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Wind project offer rejected  

Credit:  By Mark Gilger, Staff Writer, The News Item, newsitem.com 4 April 2012 ~~

SUNBURY – Despite having his offer turned down by the county commissioners Tuesday afternoon, the new owner of a proposed wind energy project on county-owned land in Coal and East Cameron townships is convinced the local economy will reap huge benefits if a lease agreement is approved with his company.

Commissioners Vinny Clausi, Rick Shoch and Stephen Bridy turned down a new year-to-year lease agreement with Everpower that calls for the county to receive $2,000 per year for 400 acres of property, 75 of which would be utilized for wind turbines.

Everpower, a wholly-owned subsidiary of Terra Firma, which is a private equity group based in the United Kingdom, purchased the wind turbine project March 30 from Justin Dunkelberger, chief executive officer for Penn Wind LLC. Dunkelberger, who reportedly was unable to finance the construction of six wind turbines in the county due to poor economic conditions, did not return a telephone call Tuesday seeking comment about Everpower taking over the project.

Dunkelberger and Kevin Sheen, senior director of development for Everpower, met with the commissioners to discuss the wind turbine project that has failed to become a reality. Both officials informed the commissioners that neither of their companies were willing to pay $56,000 per year to the county until the turbines were built.

During a telephone interview Tuesday night, Sheen provided some background information about Everpower and expressed optimism about working with the county in the future to complete the wind turbine project.

“We purchased the Mahanoy Mountain (Penn Wind) project at the end of last month,” he said. “We hope to enter into a short-term lease option with a private or public entity. We had a good discussion with the commissioners about the project. I understand their disappointment and narrow focus with Penn Wind. But we aren’t Penn Wind and can’t control what didn’t happen with their company. We will make good on our promise to build, operate and maintain wind turbines in Northumberland County if the commissioners approve a lease agreement.”

In the business

Sheen said, “We will get the job done and offer a reasonable market-based arrangement. My hope is that the commissioners will realize the overall economic impact a wind turbine project will have in the county and local communities. We will bring this project to the finish line. We have been successful many times before with similar projects.”

Sheen, who noted Everpower is willing to abide by previous lease conditions established by the commissioners, said, “The wind project can really help the local economy. I can’t stress that enough. The ongoing benefits will certainly outweigh the $56,000 payment being sought by the county.”

Sheen said Everpower has offered to pay $15,000 per year to East Cameron Township once the wind turbines are built.

The Everpower official said his company would be willing to expand the wind turbine project from 18 megawatts to 40 megawatts, which would require the leasing of additional acreage.

Sheen, who noted Dunkelberger is serving as a liaison with his company, said Everpower was established in 2002. He said the company is based in New York, but also has offices in Pittsburgh and Ohio.

The company official said Everpower currently operates two wind farms in Cambria County, including 25 (62.5-megawatt) turbines in Adams Township and 35 (72.5-megawatt) turbines in Adams and Summerhill townships. He said the company also operates 25 (51.25-megawatt) turbines in Steuben County, N.Y., and a wind farm in California.

He said two other wind farms owned by Everpower are under construction in Somerset and Blair counties in Pennsylvania.

$5 per acre

While Clausi and Bridy were upset about the offer presented by Everpower, and Dunkelberger backing out of the project, Shoch remained open to conducting further negotiations with Sheen and seeking proposals from other companies for leasing or purchasing county land initially designated for wind turbines.

“I stopped the corruption in 2007 when a prior board of commissioners entered into a lease agreement with Penn Wind for 100 acres at $1 per year,” Clausi said. “After I took office, I extended the project proposal with Penn Wind for three years because I believed it would be successful. But I’m not signing off on this deal because I believe the taxpayers would get robbed. $2,000 per year for 400 acres comes to $5 per acre. That’s non-sense.”

Clausi said he left Tuesday’s meeting early after hearing Everpower’s offer and realizing the county wasn’t going to receive $56,000 per year from Penn Wind or Everpower.

“There was no agreement reached,” Bridy said. “I was disenchanted by the meeting and disappointed that Mr. Dunkelberger sold his interest in the project. $5 per acre isn’t worthwhile for the county. Plus, tax credits given to wind energy projects expired Dec. 31, 2011, which causes an additional hindrance. This project has been strung out too long and it’s time to cut our losses.”

Bridy added, “We need to offer the land to another developer because we need every penny of revenue we can get.”

Shoch said, “This property is currently not generating any income for the county and I think $2,000 per year is better than nothing. I agreed that we should discontinue the lease since we won’t be receiving the $56,000 payment. Everpower has a lot of experience in constructing and maintaining wind farms. It is a known entity and brings more credibility than Penn Wind. But if tax credits aren’t extended, I don’t think the project will be feasible for Everpower. But I would be open to further negotiations.”

Shoch pointed out that the county has no further obligation to Penn Wind.

“We don’t have a lease with anyone, but we have the ground,” he said. “It’s up to us to decide what we want to do with it.

Other wind energy projects are possible and we need to look at how we can best use our county assets and obtain income from them. I would consider entering into year-to-year or short-term leases, but not anything long term.”

Legal opinion

Shoch, who serves as solicitor for Point Township, said he wants to obtain a legal opinion from county solicitor Frank Garrigan about voting on anything that would benefit Dunkelberger or Penn Wind since Dunkelberger is a Point Township supervisor.

Penn Wind had planned to erect three wind turbines on county-owned property and another three turbines on privately-owned land in the two townships.

A 29-year lease was struck between Penn Wind and the county two years ago for 75 acres of land, with the county receiving 6 percent of the profits from electricity generated by the turbines.

At the time the $30 million project was announced, Dunkelberger said he anticipated it would require 100 full-time and 85 part-time positions in design, management and maintenance.

Clausi previously said construction of the turbines would generate approximately $6 million in the workforce.

Dunkelberger previously said he expected the turbines to arrive in the second quarter of 2012 and be operational by October.

Prior to being sold to Everpower, the wind turbine project had been delayed by a slow economy and Penn Wind’s search for partners.

In 2007, the prior county board of commissioners comprised of Frank Sawicki, Kurt Masser and Sam Deitrick signed a lease agreement with Penn Wind for 1,000 acres in Coal and East Cameron townships near the Schuylkill County border. That deal called for the county to receive a flat annual fee of $56,000.

But Clausi argued that taxpayers should receive more money. In April 2010, Penn Wind and the county agreed to a deal that has the county collecting 6 percent of the profits, or potentially nearly $4 million over the life of the contract.

If the turbines weren’t erected by spring 2012, Clausi said the county would begin receiving $56,000 per year until they were constructed.

Source:  By Mark Gilger, Staff Writer, The News Item, newsitem.com 4 April 2012

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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