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Real cost of removing turbines debatable  

Credit:  By BRENT RUNYON | Falmouth Enterprise | Apr 30, 2013 | via mjoecool.wordpress.com ~~

On May 21 Falmouth residents will vote on Question 2, which asks whether or not the debt required to dismantle and remove the town-owned wind turbines should be excluded from Proposition 2 1/2. A yes vote on Question 2 will authorize a property tax increase to pay for the removal and repayment of debts for the turbines. A no vote means that property taxes will not be increased and the turbines will remain standing.

There is disagreement about the cost estimates for removing the turbines and paying back the debt. Those estimates range from a low of $5.7 million if the state were to forgive existing debt and loans and the turbines were sold, to a high of $25 million if lost revenue from the turbines and future energy costs are included in the total.

Voters are being asked to exclude from Proposition 2 1/2 the estimated cost to remove the turbines and pay off the debt—a total of $13.2 million without interest, said Falmouth Town Manager Julian M. Suso. That includes $4.9 million to repay the debt on Wind 1 and $4.9 million borrowed to construct Wind 2, which originally was to be converted into a grant through the Federal American Recovery and Reinvestment Act but will need to be repaid if the turbines are removed. The total includes an estimated $2 million to repay Renewable Energy Certificates to the Massachusetts Clean Energy Center. It also includes an estimated $1.4 million to shut down, remove and restore the site, including the direct costs to procure, permit, dismantle and remove both turbines along with legal, technical, and consulting expenses.

Each amount will be bonded at different interest rates, bringing the total amount to$17.7 million with interest to be paid over 20 years, Mr. Suso said. If the debt exclusion is authorized, the total increase in property taxes on a $471,000 home—the average home value in Falmouth—would be a total of $801 over 20 years, Mr. Suso said.

If voters approve the question, removing the turbines would still require a two-thirds vote of Falmouth Town Meeting in November and special legislation through the state to authorize the town to borrow money to remove the wind turbines.

Falmouth Finance Director Jennifer Petit said Town Meeting will not have to authorize the borrowing of all of that money, because $5.7 million to repay the debt and interest on Wind 1 has already been bonded. “We’re asking for a debt exclusion on all of it, however nothing will happen without Town Meeting authorizing the borrowing,” Ms. Petit said.

Voters must still authorize the $5.7 million debt exclusion, Ms. Petit explained, because the current Wind 1 debt payments are paid by the operations of the turbines and cannot be added to the tax rate. “We’re using the operations of the turbines to pay off the debt,” she said. If the turbines are removed the debt will have to be paid by excluding the debt from the tax rate. “It’s complicated,” Ms. Petit said. “We’ve tried to get the information out there as best we could. I don’t think any other community has done this. We’re trying to come up with the best cost estimates we can.”

Town Meeting would have to approve the spending of $8.3 million, which includes $4.9 million borrowed to construct Wind 2, $2 million to pay back the renewable energy credits, and $1.4 million to remove both turbines. That is the same amount Town Meeting failed to authorize earlier this month by six votes shy of a two-thirds majority.

“I’m guardedly optimistic” that the ballot question will pass, Mr. Suso said. Over the next three weeks there will be much said and written about Question 2, he said. He hopes to get the facts out to voters as they make up their minds whether to vote yes or no on the question. “I think the wind turbine issue has been an emotional issue and one that has generated polar opposites in terms of debate,” Mr. Suso said. “I wouldn’t expect this to be markedly different.

Our mission is to get the facts out there to the voters.” It is no surprise that the polarized debate about wind turbines in Falmouth extends to the finances to remove them. All agree on the range of costs for what it would cost to simply remove the turbines. But residents in favor of keeping the turbines standing say the costs should include millions more in lost revenue and future expenditures on electricity. They say the total cost of taking the turbines down is nearly $25 million.

Friends of Falmouth Wind member Christina C. Rawley believes that the cost of removing the wind turbines will rise to $24.6 million plus interest when lost revenue and future energy costs are calculated. To reach that number Friends of Falmouth Wind includes the cost to remove the turbines and repay the debt, plus an estimated $8.4 million in lost revenue and $2.16 million in electricity costs at the Falmouth Wastewater Treatment Plant over the next 18 years.

But those who think the wind turbines should be removed say that amount could be lowered by millions with help from the state and resale of the turbines. Kathryn L. Elder of Blacksmith Shop Road, one of the turbine neighbors, disputes the Friends of Falmouth Wind figures, which she said assume that the turbines will run 24 hours seven days a week. Currently the turbines only run 12 hours a day from 7 AM to 7 PM.

Ms. Elder said the amount Falmouth will be required to repay the state if the turbines are removed could be lowered significantly with cooperation from the state government and Governor Deval L. Patrick. “If Question 2 passes at the ballot, I think we will see an immediate response from the state because it will look very bad for the governor to deny their responsibility to help solve a problem that his policy in large part promoted,” Ms. Elder said. “It is clearly punitive.” Massachusetts Clean Energy Center might also forgive the money already paid to Falmouth for the Renewable Energy Credits, she said. The turbines could also be resold at $300,000 to $600,000 each, and whoever buys the turbines would pay for removal. The town must be responsible for some of the debt, Ms. Elder said, which would total about $5.7 million on the debt for Wind 1, including interest. Whether the state will work with the town to forgive some or all of the debt is unclear.

Yesterday, Secretary of Energy and Environmental Affairs Richard K. Sullivan Jr. issued the following statement to the Enterprise. “The Town of Falmouth’s ballot question is a local issue. We have and will remain respectful of the decisions made by the Town of Falmouth regarding its wind turbines. We will continue to be engaged with town officials as they weigh all the options before them. Specifically, we are committed to working with them to help address the financial concerns of the Town in connection with the turbine projects. But presupposing the outcome of any decisions would be premature.”

In a letter to Mr. Suso dated April 11, Mr. Sullivan wrote that the Massachusetts Clean Energy Center would re-negotiate the renewable energy purchase agreement in the event that the turbines continue to operate.

Source:  By BRENT RUNYON | Falmouth Enterprise | Apr 30, 2013 | via mjoecool.wordpress.com

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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