June 13, 2013

Developer, Fairhaven could see turbine revenue halved

By Ariel Wittenberg | June 13, 2013 | www.southcoasttoday.com

FAIRHAVEN – Owners of Fairhaven’s two turbines could stand to lose a lot of money from the Board of Health’s motion Monday to shut off both turbines overnight.

Last year, the town paid the developer more than $700,000 over a 12-month period for electricity produced by the turbines, according to town Executive Secretary Jeffrey Osuch. The developer’s future annual revenue could be halved, depending on wind conditions, if the Board of Health’s ruling stands.

The town and Fairhaven Wind are engaged in what is known as a “lend-lease agreement.” Per the agreement, the town leases to the developer the land off Arsene Street where the turbines are located in exchange for the town purchasing all electricity produced by the turbines. NStar then reimburses the town for the electricity it has purchased from the turbines, resulting in additional revenue for the town.

The developer’s rent is $100,000 per year, meaning his total revenue from the turbines in the past 12 months would have been more than $600,000.

“The financial impacts of this are significant,” Fairhaven Wind developer Sumul Shah said Tuesday.

He said his company has done “detailed analysis” of how much electricity is produced “at every hour of every day of every week of every month” by the turbines. He would not provide any details of the analysis, saying he preferred to “engage in a dialogue with the Board of Selectmen,” which is in the process of renegotiating the developer’s contract.

That renegotiation is the result of findings from state noise testing that the turbines had violated a term of the contract that they not exceed 60 decibels at the nearest property line. Selectmen have ordered Fairhaven Wind to prove within 30 days that the turbines are not violating that order.

That violation was found at night, when the turbines will no longer be operating. It is unclear how the developer would prove the turbines are in compliance and whether the developer would have to prove they are in compliance only for nighttime or for daytime, as well.

The state’s Department of Environmental Protection has said it will work with the town and developer to assist with any further testing that may be needed. Selectmen will meet again with the developer within the next three weeks to discuss more specific solutions.

Selectmen Chairman Charlie Murphy said his goal is “to see if we can do all this without going to court.”

The town could also lose up to half of its revenue depending on wind conditions as a result of the shutdown at night.

Last year, the town made more than $150,000 in revenue from both the lease payments and being reimbursed for purchased energy by NStar, according to Osuch.

Finance Committee Chairman John Roderiques said the town has already budgeted for next year under the assumption that the town would earn similar revenues from the turbines.

“If you shut down something for 50 percent of the time, you could lose 50 percent of the revenue,” he said. “Whatever is lost will have to be a dollar-for-dollar reduction” in the budget.

None of the three selectmen would say whether the town turbine revenue had come up in executive session discussions about the contract.

Selectman Bob Espindola called speculation about revenue “premature” because “we do not know yet what will be proposed for mitigation and how successful that mitigation might be.”

“If the turbines remain out of compliance permanently, the town will have to find a way to balance our budget without that revenue stream or with only part of it, just like we did before the turbines arrived,” he said.

URL to article:  https://www.wind-watch.org/news/2013/06/13/developer-fairhaven-could-see-turbine-revenue-halved/