December 5, 2013
Massachusetts

Long-term energy contract signed; Windmills remain a concern

BY PHYLLIS BOOTH | The Landmark | www.thelandmark.com

Princeton Municipal Light Department has signed a contract with NextEra Energy Power Marketing, LLC, for a delivery term of 10 years, PMLD Manager Brian Allen reported at a Nov. 20 joint meeting of the boards of selectmen and light commissioners.

The contract is effective Oct. 31 and runs from Jan. 1, 2014 to Dec. 31, 2023.

“We bought energy on a day-ahead basis,” said Allen. “Now we’ve signed a deal for 10 years, with five years of lockedin prices for the same amount per megawatt day or night. We needed to stabilize our rates, so the board asked me to look at longterm contracts,’’ he said.

The town can sell its energy from the windmills at any price, Allen said. Two contracts have been signed, with the rest on the market. “It benefits us monetarily,’’ he said. “The more we produce the more we make.”

Allen said PMLD can’t absorb the fluctuating costs such as the situation that happened last January.

“A five-year contract in this market is extraordinarily rare,” said Commissioner James Whitman. Windmill update

Commission Chairman Scott Bigelow related the history of issues related to the windmills. In August 2011 there were problems with the sensors in the electrical controls, said Bigelow. Fuhrlaender, the company that manufactured the windmills, declared bankruptcy and they are not doing business in the Unites States anymore, said Bigelow.

“We have a proactive group here, and they are on top of everything,” said Bigelow. “The crew have educated themselves and that’s helped us, but there are still things that pop up, with the software and other glitches.’’

The gearbox broke in 2011 and PMLD tried to get the money back, he said. “The insurance company doesn’t want to pay out, and that’s a battle and a half. The manufacturer realized their product [the gearbox] hadn’t really been tested. We have a great crew that can ID problems but we’re frustrated all the way around,” said Bigelow.

Since 2003, when the project started, all the dynamics have changed, with power contracts, steel and the windmills costing a lot more than originally anticipated, said Bigelow. “Then along came fracking. What we really need is more pipelines. We don’t have natural gas here. If we did that would be good.”

“It was the perfect storm,” said selectman Edith Morgan. “Everything that could go wrong did go wrong. So how are we doing? Are the windmills producing?”

“We’re discussing refinancing and we’re appealing to other utilities interested in windpower. And we have discussed turning it all over to a large company,” said Bigelow.

Allen said PMLD has gained ground working with American Super Conductor, based in Austria. “They approached us, understanding we didn’t have any support and offered us 24/7 monitoring and tech support,’’ he said. These machines are four years old, and like a car aren’t going to get better, he added. The gearboxes are looked at twice a year and checked for wear, with oil samples taken monthly and an extensive checklist followed, he said. “We get error messages,” said Bigelow.

Sometimes the windmill shuts down, other times the department has to send two workers up there to check them out, he added. There are 487 points the computer is checking all the time and if there are problems it will shut down, said Bigelow. They put additional sensors in the gearbox, if a message comes through they check it. Sometimes the solution is easy, other times they have to trace the problem all through the lines, he said.

PMLD has talked with six different investment groups, but because Furhlaendar is out of business and the parts come from Europe, no one in New England is servicing them so no one is interested, said Bigelow. PMLD has been offered $1 million for the machines and owes $5.3 million, he said. PMLD sold 10-year energy contracts to West Boylston and Sterling to buy a portion of the wind, he added. The wind market fell out and now solar energy has become popular, he said.

PMLD is working with Clean Energy Center looking for ideas of how to get some money, said Bigelow. “It may give us some relief in the future.”

The manager’s letter to the governor kicked it over to Clean Energy Center, said Bigelow.

“It’s important to note that in terms of maintenance, having the PMLD guys doing the work rather than an outside vendor saves two or three times the cost of the work, said commissioner Christopher Conway. “Our guys have gone above and beyond. To their credit they have taken on the challenge.”

Princeton is not alone in windpower problems. “Cape Wind is having issues,” said Whitman. “Back in the old days you could sell wind energy for more than gas energy” Refinance the debt

Allen said PMLD may try to refinance the windmill debt. They have lowered it from 5.5 percent to 4.2 percent but a municipal bond would provide an even lower rate, he said. “I sent a spread sheet to the selectmen to see if makes sense to the ratepayer/taxpayer. We can’t go any further unless the selectmen support it.”

“Town meeting approves, not us,” said Moss. Technically, it’s a municipal loan, not a bond, said Moss. With a Statehouse bond you can borrow up to 10 years and the bond rolls over each year, said Moss. Those rates right now are approaching 2.5 percent and it would be a municipal loan from the state, he said. “There is indeed some interest rate savings.”

URL to article:  https://www.wind-watch.org/news/2013/12/05/long-term-energy-contract-signed-windmills-remain-a-concern/