FALMOUTH – The Massachusetts Clean Energy Center (MassCEC) asked its board of directors to authorize the board chairman to appoint a three-person subcommittee that will review and potentially modify the existing renewable energy certificate (REC) purchase agreement with the town of Falmouth. However, the MassCEC staff memorandum that makes this request also states that Falmouth will not receive a contract waiver if Wind 1 is decommissioned and removed.
Under the existing REC agreement, MassCEC has prepaid $1.01 million to Falmouth for RECs to be delivered from a wind generating facility between 2015 and 2030.
“MassCEC is considering the terms of an amendment to the existing REC Agreement, which may include potentially waiving [Falmouth’s] obligation to deliver RECs to MassCEC under the existing REC Agreement,” reads a summary of MassCEC’s April 2 memo.
It further states the purpose of the potential waiver would be to reduce the financial impact on the town as it attempts to mitigate sound impacts from Wind 1 and Wind 2, its two wind turbines located at the Falmouth Wastewater Treatment Facility.
“[Falmouth] has been engaged in a prolonged effort to resolve strenuous complaints about noise and noise-induced health concerns related to the wind turbines. After the conclusion of a professionally facilitated joint fact-finding process, the [Falmouth] Board of Selectmen has placed articles on the warrant for an April 9, 2013 special Town Meeting that would authorize funding to ‘mitigate the neighborhood impacts of the turbines, including without limit, to dismantle and dispose or relocate both.’ The Board of Selectmen has endorsed the option to remove the turbines,” reads a summary in the MassCEC memo. “Shortly after their vote, the Board of Selectmen contacted MassCEC seeking assistance in the form of financial relief from the requirement to deliver RECs to MassCEC under the prepaid existing REC Agreement. With a MassCEC waiver of the REC delivery requirement, the town could avoid having to refund the MassCEC prepayment.”
The memo goes on to propose the three-person subcommittee, including the board chairman and CEO, review potential changes to the existing REC Agreement.
“The contemplated modification is for MassCEC to waive delivery of the RECs and to waive the contractual requirement that the town refund the MassCEC prepayment for RECs not delivered. The aggregate value of such refunds over the 15-year agreement term would be $1,959,960,” it says. “We anticipate seeking Board subcommittee approval prior to the April 9 special Town Meeting.”
The memo weighed the benefits and risks involved with modifying the existing REC Agreement, from the MassCEC viewpoint.
“A fair and equitable resolution of the wind facility public acceptance issues in Falmouth is important to the affected neighbors and the town, and is also of vital importance to our overall efforts to support appropriate siting of land-based wind energy in Massachusetts,” it reads.
According to the MassCEC memo, MassDEP has conducted regulatory compliance testing of the Wind 1 turbine at night and concluded that the sound impact from the turbine does exceed state noise policy under certain conditions – while MassDEP monitoring during daytime found no exceedances of state noise policy.
MassCEC also said there are unique circumstances in Falmouth, so a decision in that town would not set a precedent for others in the state.
“Falmouth Wind 1 was one of the earliest municipally-owned megawatt scale wind turbines installed in Massachusetts. Even though the original MTC-commissioned feasibility study for Falmouth over-estimated the likely acoustic impact, that study did not include a detailed acoustic analysis based upon sampling of ambient acoustic conditions (as is our current, more rigorous practice) which might have identified a potential exceedance of the 10 decibel limit,” the memo reads. “The Falmouth wind turbines are of an older design which does not offer ‘low noise operations’ or other retrofit options.”
And MassCEC said in its memo that they do not believe the potential modifications to Falmouth’s REC Agreement would place unduly financial impact on the state rather than the town.
“The aggregate nominal value of the potential concession is about $2 million. In comparison and by way of example, the town will forfeit up to $8 million in aggregate financial benefit if operation of the wind turbines is curtailed to 7:00 a.m. to 7:00 p.m.,” it reads.
MassCEC also asked any recommended modifications be consistent with the following principles:
· The financial value of the waiver to the town shall not exceed the estimated financial loss expected to be incurred by the town through the action taken.
· The nature of the action taken by the town shall advance the general interests of ratepayers of MassCEC’s Renewable Energy Trust.
· The nature of the action taken by the town shall be designed to satisfy, but not exceed, the requirements of state noise policy, with allowance for the unique nature of sound from wind turbines and margins of error inherent in the noise compliance analysis of wind turbines.
· The MassCEC waiver shall not be available for a town action involving decommissioning and/or removal of the Wind 1 turbine.
· The town must agree to participate in the joint MassCEC and MassDEP acoustic research study, at least during daytime hours of operation of the wind turbines.