PORTSMOUTH – Despite pleas from several residents to tear it down and cut taxpayers’ losses, the Town Council voted 4-2 Tuesday night to start the process of getting the broken turbine at the high school repaired and put back into service – a job that would cost an estimated $855,000.
The vote gets the ball rolling on the recommissioning of the turbine, but there are many more decisions and agreements to be negotiated – such as a warranty on a new gearbox – before the council makes a final decision, members said.
The majority of council members said they simply couldn’t walk away from the voter-approved turbine with $2.1 million in debt service still owed on the machine, which was commissioned in March 2009 and spun until its gearbox failed in May 2012. Recommissioning the turbine – with new measures in place to ensure it operates smoothly – would be the only way to pay the debt off and possibly turn a profit again years down the road.
“What will not go away regardless of the decision tonight is that we owe $2 million on the existing turbine,” said Council President James Seveney. “There’s no reason why a machine can’t work indefinitely if taken care of properly.”
Council members Elizabeth Pedro and David Gleason voted against recommissioning the turbine. They said it was too risky a venture and that a replacement gearbox would also likely fail.
“When you buy a car and it’s a lemon, you get rid of it,” said Ms. Pedro, noting that the town still doesn’t know what went wrong with the existing gearbox designed for the 1.5-megawatt turbine.
Added Mr. Gleason, “This gearbox does not work for this machine.”
At the start of the hearing, Town Planner Gary Crosby said the council was charged with making a fundamental business decision: Should the town repair the turbine and go back to energy production or dismantle the machine and remove it from the site?
For 39 months before it broke down, the turbine produced on average 3.1 million kilowatt-hours (kWhs) per year, or enough electricity for 280 houses, according to Mr. Crosby. Its net income was about $880,000 and after debt service $348,000 was distributed to the town and school system, he said.
“It performed better than expectations,” said Mr. Crosby, adding that the turbine also eliminated nearly 15 million pounds of carbon dioxide – the equivalent of more than 1,400 passenger vehicles from the local area.
The town has been negotiating with Gemini Energy Systems, an independent service provider to the wind industry, to develop a plan to get the rotors spinning again. Gemini, in a May 8 inspection overseen by the town’s wind turbine consultant, Don Roberts of DA Roberts, LLC, found several “minor” issues with the turbine, such as heavy corrosions on the tower base studs and oil residue and flaking paint.
“Overall they felt that the turbine was in good condition,” said Paul Raducha, one of the town’s technical advisors on the project and a former certified public accountant with more than 10 years of experience in renewable energy. “There were no issues found on the internal inspection of the blade, nor on the internal.”
Mr. Roberts’ own report turned up several assembly errors on the turbine. such as improper rotor installation, an error with the blade pitch calibration, and one ladder splice section that was installed upside down. These were all things that can be fixed, however, according to both Mr. Roberts and Mr. Raducha.
Decommission vs. recommission
Mr. Crosby presented figures that showed the total cost of decommissioning (taking down) the turbine would be about $2.1 million with interest. That includes paying off more than $1.5 million in Clean Renewable Energy Bonds (CREB), a $37,000 termination fee required by CREB, paying off $237,000 on a Commerce Rhode Island loan, and a $150,000 estimated removal cost.
Putting the turbine back in service (recommissioning), meanwhile, would cost $885,000, according to Mr. Crosby. That figure includes nearly $600,000 for the removal of the exiting gearbox and purchase and installation of a new one, $50,000 for general repairs and maintenance, $75,000 for an owner’s representative to oversee the project going forward, more than $150,000 in upgrades to improve the turbine’s operation and longevity, and about $78,000 for a contingency fund.
“This whole procedure would take from five to 10 days,” said Mr. Crosby. “If all goes properly we can resume energy production in September 2014 and the gear box will come with a six-year warranty from the manufacturer.”
According to an economic analysis of a working turbine going forward, Mr. Raducha said recommissioning is a much more favorable option which becomes increasingly clear by the turbine’s ninth year.
Greg Schultz, a special assistant in the Rhode Island attorney general’s office, said the office is offering $250,000 toward the repair of the turbine. The grant represents a portion of the funds received by the state in a settlement of a Clean Air Act lawsuit. Mr. Schultz pointed out that the town was one of the first Rhode Island municipalities to advance the state’s objective of promoting renewable energy and reducing the emissions of air pollutants.
Chris Kearns from the state’s Office of Energy Resources and Larry Chretien, executive director of People’s Power & Light, a nonprofit focused on making energy more affordable and renewable, also pledged their support in getting the turbine spinning again.
In hopes of preventing future failures, Mr. Raducha said a “self-insurance fund” for repairs and for the machine’s ultimate decommissioning – most wind turbines have a lifespan of about 20 years if functioning properly – would be fed by a net cash flow from the turbine operations after debt service.
Part of the preventative measures, said Mr. Roberts, include de-rating the turbine by about 20 percent. That would reduce the amount of torque on the gearbox, while reducing revenue by only 6 percent, he said.
Audience has its say
After hearing from the experts, the council turned the podium over to residents, many of whom wanted the turbine gone.
“Everyone I talk to says take it down. It’s an embarrassment,” said Tom Casselman. “It’s time to admit what it is. It’s a piece of junk; it’s a failure. We need to move on.”
Judi Staven said trying to fix the turbine is too risky. “We’re throwing good money after bad. Take it down,” she said.
Paul Kesson said it shouldn’t even be up to the council to decide what to do with the turbine. “The decision to add a 26-percent increase to the original cost to solve this problem is a decision for the people,” he said. “In less than a thousand days this thing failed. It’s going to do it again.”
Bob Bledsoe said the council shouldn’t be concerning itself with wind turbines. “You should be worrying about paving our streets,” he said. “I’m sorry, we need to tear that thing down so we can go on with our lives.”
Several people spoke in favor of fixing the turbine, including Henry Rodrigues, who was on the original town committee that studied the feasibility of the wind machine.
“I’m going to lose a lot of friends today,” said Mr. Rodrigues, who said the turbine made a lot of money for the town when it was working. “I can’t believe the negativity in here about tearing the thing down. I think we should keep it up.”
Jim Wesner also spoke in favor of recommissioning the turbine. “We’re going to lose a lot of money, for nothing,” he said.
William West, who sat on the council that decided to put the turbine to a town-wide vote, said the machine brought Portsmouth “over a million dollars’ worth” of free publicity. “As soon as something goes wrong, all of a sudden it’s the worst thing in the world,” said Mr. West, who favored recommissioning the turbine. “You’re going to have to pay off the bonds one way or another.”
Council members who voted for recommissioning said they were concerned about all the debt service still left on the turbine. Council member Keith Hamilton said he wanted the numbers “refined” to make sure $885,000 is the real cost of getting the turbine turned back on. He said he’d like to see the turbine pay for itself in five to seven years down the road.
Ms. Pedro, however, noted that a similar gearbox from Germany would replace the existing one, and that the town still doesn’t know what exactly went wrong with the mechanism. “This turbine is not like any others,” she said. “It was put together by a company that had never put one together before.”
She voted against recommissioning. “If we get out now, we know what our losses will be,” said Ms. Pedro.
Also voting against the motion was Mr. Gleason, who said he’s spoken with a representative of an energy company that bought turbines similar to the town’s. “They had a failure with one machine after one year,” he said.
On wind power, Mr. Gleason said, “The bottom line is, it really isn’t free.”
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