August 24, 2014
Massachusetts

IG: Town manager’s solar-energy project illegal

By Paula J. Owen, TELEGRAM & GAZETTE STAFF | August 24, 2014 | www.telegram.com

WINCHENDON – Eight months before the state Attorney General notified the town it had violated the law with its “turn-key” plan to buy the old courthouse to relocate the police station, the Inspector General’s office told Town Manager James M. Kreidler Jr. that a solar-energy project through his business Muni-Sun violated state laws.

Former Inspector General Gregory W. Sullivan said Mr. Kreidler’s bulk RFP proposal violated state procurement laws and would have been “exorbitant” to taxpayers in the nine communities that Mr. Kreidler had lined up for his project.

In letters to the municipalities on March 30, 2011, the IG’s office said Mr. Kreidler’s brokerage of solar projects through his one-man Ashburnham-based company Muni-Sun LLC would have been diverting millions of dollars to his company that would otherwise have gone to the communities.

At the time, Mr. Kreidler strongly denied the accusation and said his project would have meant big savings for the communities.

Mr. Kreidler, a former Ayer town administrator, set up contracts between his business and Ayer, Shirley, Gardner, Sturbridge, Westminster, Orange, Clinton, Ashby and Palmer. Mr. Kreidler told them he would find a solar developer that would lease space in each of the communities, usually at the landfill.

The solar company would provide the communities with cheap, green energy to run municipal buildings, and would sell the balance of the energy produced to the utility grid.

Under the contracts, the communities would save money on energy and would have the option of eventually buying the systems.

Mr. Kreidler did not receive money upfront for his consulting services but would have taken a percentage of revenues from the energy generated. Muni-Sun stood to make an estimated $7.2 million in 20 years and $10.8 million in 30 years, according to Mr. Sullivan.

Mr. Sullivan’s letters said Muni-Sun’s requests for proposals violated state procurement laws, and the communities were not getting the good deal they thought they were getting.

“In our view, by establishing this kind of compensation plan you will be significantly overpaying for the services associated with leasing your land,” Mr. Sullivan said in his letters.

The communities ought to have been able to find a solar developer on their own that, without having to give money to a middleman, would have given more to the towns, he said.

Other communities, Mr. Sullivan said, negotiated solar projects on their own for under $100,000 for consulting and legal services.

Mr. Kreidler said his understanding was that energy contracts were exempt under the state’s procurement law.

Mr. Kreidler said Muni-Sun has negotiated three private contracts with solar developers in the last 18 months and has a portfolio of thousands of potential sites.