March 13, 2013

Preliminary wind turbine financial projections from town manager’s office

THE BULLETIN | March 12, 2013 |

FALMOUTH – These are preliminary estimates of the costs associated with removing the town’s two wind turbines located at the Falmouth Wastewater Treatment Facility, from the town manager’s office:

Low Range total estimated costs: $12,251,695

High Range total estimated costs: $15,235,541

Wind 1 Debt: Total remaining principal and interest is $5,717.862. The town has requested financial assistance from the state, which could result in a reduction in the cost to taxpayers.

Wind 2 Obligations: The town authorized $4,865,000 in 0 percent interest State Revolving Fund Loans for Wind 2 to be 100 percent forgiven upon compliance with the terms of the contract. If the town removes Wind 2 or does not operate Wind 2, it’s possible the note will have to be paid back in full over the 20-year life of the loan with 2 percent interest ($5,886,650). The town has requested determination that the terms of its agreement are satisfied and repayment is not required. Special legislation may be required to allow the town to borrow money for the turbine if it is removed.

Removal Expenses & Legal Fees: The town proposes to seek a bond to pay for these costs. Special legislation is required to allow the town to pay expenses for which there will be no remaining asset value. Estimated direct costs to dismantle and remove both turbines is about $1 million with an estimated resale value ranging from $400,000-$1 million. The town estimates an additional $150,000-$350,000 for legal and technical services to support the project through the final site restoration. This does not include the estimated overall liability of $2.6 million for known claims or notice of claims against the town.

MassCED Contract for RECs: In 2010, the town received $1,010,623 advanced payment for Renewable Energy Certificates. The town was repaid $11,790 in advanced payment because commercial operation was delayed by 90 days, reducing the value to $998,833. There is a “stipulated refund value” of $2,054,808 ($42 per REC) in the contract. The town has requested relief from the obligation to deliver RECs.

Annual Operating Expense: Direct energy expenses are projected at $120,000 or higher, depending on rates and wastewater treatment plan consumption. In addition, $106,221 for the Renewable Energy Budget, which declines to $0.00 as service contracts expire. Estimated expenses here are $120,000-$226,221.

URL to article: