BAD AXE – The Huron County Board of Commissioners opted not to allow a change in the decommissioning funding for Exelon’s Harvest II Wind farm at its Tuesday morning meeting.
Exelon had requested changing the $1 million from a performance bond and a corporate guarantee to a letter of credit from an A-grade bank. Decommissioning funding is a part of every county-zoned wind project. It is used to guarantee the cost associated with the removal of the turbines at the end of their life cycle is met, so there is no cost to the taxpayers.
Dave Nepper, senior project manager for Metro Consulting Associates in Plymouth, spoke on behalf of Exelon. He said switching to a letter was a more secure form of financial banking, that the county would likely have to file a lawsuit to draw out the funds if Exelon wasn’t coming through on its obligations.
“If you had to do that, the likelihood of being able to get that money – I wouldn’t say slim, but it’s not as good as a letter of credit,” Nepper said. “If they’re in that much of a financial struggle there are going to be other creditors coming, and they’re going to be ahead of Huron County, Sanilac County, Gratiot County.”
Nepper also said that the switch would benefit Exelon, by allowing it to use the sitting $1 million.
“… It’s money that they have to set aside to cover that cost,” Nepper said. “So for them to be able to do more development, build more projects, do things like that, they need to get that money off their books and put it in the bank, where they have credit with them.”
Jeff Smith, director of the Huron County Building and Zoning Office, said the Planning Commission came out against the switch at its last meeting.
“The consensus is leave what we have currently in place,” Smith said. “They didn’t like the idea of accepting different forms of credit or financial insurance because that opens the door for other developers and other projects to come and ask the same thing. So where does it begin and where does it stop?”
The opinion was shared by the board. Commissioner David Peruski said he felt secure with the decommissioning funding as is.
“One of the things I feel more comfortable with, with a performance bond, is that there is a third party that evaluates the financials of the company – in this case Liberty Mutual,” said Commissioner David Peruski, who acts as the board’s legislative chairman. “Liberty Mutual would not issue a permanent performance surety bond unless they found comfortable with the financials of Exelon.”