September 11, 2013

Shumlin awards solar deal to firm of campaign supporter

by Andrew Stein | September 11, 2013 |

Gov. Peter Shumlin announced what could be the largest solar project in Vermont history Wednesday, teaming up with AllEarth Renewables to build up to 5 megawatts worth of solar trackers in connection with state buildings.

Shumlin’s longtime political ally and contributor, David Blittersdorf, is the founder and CEO of AllEarth Renewables, but the Shumlin administration says politics had nothing to do with this decision. Bids for the project were initially submitted in 2011, and the administration says Tropical Storm Irene waylaid the project. Due to a communications error, administration officials said they could not provide the bids until Thursday.

“This contract was awarded to the best bidder after a competitive process,” said Louis Porter, Shumlin’s secretary of Civil and Military Affairs. “Responses to this one were reviewed by a team of state employees … in addition to the Buildings and General Services contracting staff. This agreement will save taxpayer money, while furthering our goal of increasing the use of renewable energy.”

The Shumlin administration estimates that a final deal, which has not yet been signed, will save the state $1 million over a 20-year period. AllEarth Renewables spokesman Andrew Savage said Thursday that the company would net no more than $5 million for the project and defended the selection of the company.

“Who else in Vermont would you propose to do this volume of solar manufacturing and installation with local work?” Savage said.

The 5 megawatts of solar will be broken into 10 separate projects to take advantage of the state’s net-metering program, which requires utilities to credit renewable energy projects that are less than 500 kilowatts in capacity for every kilowatt-hour (kWh) they produce. The hitch is that a net-metering project must be tied to a property that consumes energy for the credits to be worth anything.

“We will be entered into a net metering agreement for solar power to ensure we hook up 10 of our state buildings to solar power to help lead the way as we make the transformation from fossil fuels, coal and other fuels that are killing our planet to solar that is clean, green renewable power,” Shumlin said at a news conference on Wednesday.

The new solar projects will net meter from seven correctional facilities across the state, the Pavilion building that houses the governor’s offices, a state office building in Brattleboro and state offices in Bennington. The solar trackers won’t necessarily be located at those facilities, but they will be financially connected to them for net-metering purposes. The administration has yet to iron out the specifics of siting the trackers.

Under Vermont law, a utility must credit a net-metering client at least 20 cents for every kWh the client produces up until the point when those credits completely offset a client’s energy bill. To learn more about the state’s net-metering law, read here.

Since AllEarth will own and install the trackers, AllEarth will get the bulk of these total credits in the form of cash, said Emily Montgomery, a staff attorney for the Department of Buildings and General Services.

The state signed a large, umbrella agreement with AllEarth in October 2012, but the value of that deal will come from power purchase and lease agreements.

For all of these solar projects, whether they are on state land or not, the state will keep 5 percent of the credit, thus lowering its energy bill by up to 5 percent. AllEarth will earn 95 percent of the energy credit in dollars.

“We pay our utility bill as normal, but then there is a credit, and the state pays 95 percent of that credit amount to AllEarth,” Montgomery said.

If the trackers are installed on state land, the state would get to keep an extra 5 percent of the credits, saving up to 10 percent on its energy bill for a given facility in a year.

The deal is mutually beneficial for the state and for AllEarth. The state is providing 10 entities for AllEarth to net meter from, and, in return, AllEarth will give the state a cut of the credit. This type of agreement is more common among entities with no tax appetite than it is for private businesses that can take advantage of tax credits.

The five-member evaluation committee for the state, which included Deputy Secretary of Administration Michael Clasen, recommended AllEarth because the company “was the most qualified due to their ability to provide approximately 60 kilowatt projects and 150 kilowatt projects.”

During Shumlin’s 2012 political campaign, AllEarth contributed $4,000 under two separate legal entities. The state’s maximum allowable donation per corporation is $2,000, and AllEarth Renewables Inc. and AllEarth Services LLC both contributed that amount. Blittersdorf also contributed $2,000. In 2010, the year Shumlin was first elected to the governor’s office, Blittersdorf contributed $8,000 to Shumlin via four different limited liability companies. The renewables entrepreneur also funded a $20,000 issue ad campaign that blasted Brian Dubie, Shumlin’s Republican opponent, for his support of Vermont Yankee.

This story was updated at noon Thursday to clarify the amount of money AllEarth Renewables stands to net from the project.

[rest of article available at source]

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