January 23, 2013
Massachusetts

Finance Committee looking ahead to Falmouth’s fiscal cliff

By Christopher Kazarian | Falmouth Enterprise | Jan 22, 2013 |

Earlier this month Congress was able to avert falling off the country’s fiscal cliff when it passed a bill staving off tax increases and spending cuts that President Barack H. Obama signed into law.

Now there is talk of another fiscal cliff, one in Falmouth that will come on July 1, 2014. That is when Falmouth will be unable to sustain any curtailment of the town-owned wind turbines at the Wastewater Treatment Facility.

Last Tuesday evening members of the finance committee discussed Falmouth’s fiscal cliff, a term coined by member Nicholas S. Lowell, upon being presented with Town Manager Julian M. Suso’s proposed budget for the next fiscal year.

In his presentation, Mr. Suso noted that the current operational model in which the wind turbines are on 12 hours a day, from 7 AM to 7 PM, was unsustainable. “Fiscal Year 2014 is the last fiscal year that wind energy receipts will support the operating expenses of both town wind turbines unless both Wind 1 and Wind 2 are operating at full capacity and generating the requisite revenues,” Mr. Suso said.

In his proposed budget for next year, Mr. Suso noted that he has included a $106,000 subsidy from the general fund to cover the costs of the current operations of the turbines. “This net drain on the town’s general fund is not sustainable,” Mr. Suso said.

Mr. Lowell questioned this later in the session to better understand the issue Falmouth will be facing in two fiscal years. “For the record my wife [Assistant Wastewater Superintendent Amy A. Lowell] does the numbers on the wind turbines, but we try not to talk about that at home for reasons of sustaining a happy marriage,” Mr. Lowell said to laughter.

“The marriage part is good for the reason that we don’t talk about it (wind turbines),” Mr. Lowell replied.

He then returned to his concerns about the wind turbines, asking Mr. Suso if his sustainable model assumed the machines would be running all the time. “Yes,” Mr. Suso said, adding that currently “we are running at a net loss. We’d go bankrupt and it would put us out of business” if that were to continue. He said the turbines are designed to be operated 24 hours a day, 7 days a week. Due to maintenance, he said, that figure may be reduced, assuming that the number may be reduced to 75 to 80 percent of the time. “A good example is the Webb turbine,” he said, in reference to the one at Falmouth Technology Park that is the Notus Clean Energy wind turbine owned by Daniel H. Webb. “That one is running 24/7 and rarely goes off.” In Falmouth, Mr. Suso said, the 12 hours on, 12 hours off model, is draining the town’s wind turbine reserve account. “Because of the decision over the past two and a half to three years to not operate the wind turbines as designed, those reserves are beginning to be depleted,” he said. Again, he stressed that this is not a financial model Falmouth can sustain.

And he later suggested that operating the machines in such a way could be impacting the turbines and be one reason for consistent maintenance. “We might expect to have more breakdowns,” he warned. “Obviously, this is pure speculation on my part.”

As to why Falmouth has elected to operate the turbines in that manner, Mr. Suso said, “it is out of the selectmen’s concern for the abutters’ alleged sleep deprivation. It was never anything to do with the state.”

Mr. Lowell asked Mr. Suso about his supposition that the wind turbines would be operating 100 percent of the time, questioning whether this would be realistic given the political climate surrounding the machines and the mechanical issues the town has faced with them. “It wasn’t based on politics, it was based on having a responsible budget,” Mr. Suso said.

“A responsible budget might be to have a fall back plan,” Mr. Lowell countered, suggesting one would be if the machines are not running. “If they don’t run, then it will mean taxpayers will be asked to reach into their pockets,” Mr. Suso said.

Finance director Jennifer Petit noted that the town will be covered under the proposed budget for Fiscal Year 2014. Where financial issues will come into play, she said, is in Fiscal Year 2015. At that time, she said, Falmouth will have to make a decision on what it wants to do with the turbines. “So you are telling me that the wind turbine fiscal cliff is in Fiscal Year 2015,” Mr. Lowell said. Mr. Suso confirmed that, noting that the only reason he raised these concerns in his budget presentation was to ensure the town is prepared before “having one foot over the cliff.”