No windfall from turbines; Income for Gloucester falls below projections 

When the giant wind turbines that tower over Blackburn Industrial Park – and much of Gloucester’s landscape – started turning in December 2012, they were hailed as a sign of the city’s commitment to alternative energy sources.

They were also projected to generate between $430,000 and $450,000 per year in energy credits or revenue for the city.

Today, the city’s two turbines are producing wind energy, all right. Since their installation, they have served up more than 20 million kilowatt hours for the city’s investment backer, Equity Partners of Needham, and utility giant National Grid.

But they’re falling well short of the city’s financial projections.

Financial records provided by the city show the turbines have brought in more than $708,000 in revenue to the city, plus in-lieu-of-tax payments from Equity that will be between $41,000 and $42,000 this year, according to Hunter Emerson, Equity’s leasing director.

But that’s a far cry from the roughly $1.2 million projected by Equity and city officials, including then-Mayor Carolyn Kirk.

Emerson and John Dunn, the city’s treasurer, say it appears that the winds have not been as consistently strong as expected. The kilowatt hour records, which measure the electricity generated as the wind blows and the rotors turn, back up their assessments.

“Predictions of what was going to be produced was based upon projections of the amount of wind driving the turbines,” said Dunn. “If that’s coming up short, I don’t think we can do much about that.”

“It’s not quite as good as some of the projections, but it’s done pretty well,” Emerson said of the project. He noted that, in the early going and a few times last year, the turbines – each measuring 256 feet tall with rotors 295 feet in diameter – had to be shut down while awaiting service from the manufacturer, Spanish-based Gamesa.

“But generally, we’re pleased,” Emerson said, “and I would hope people are pleased across the board.”

“It’s not like we’re hitting the number the city first expected,” said Jim Destino, Gloucester’s chief administrative office under Mayor Sefatia Romeo Theken. But he added that an revenue shortfall is not affecting the city’s spending plan or services.

“They may have budgeted for higher (revenues) at first, but that’s not the case now,” Destino said. “We have it budgeted appropriately – and we’re drawing in more now than they had in the past.

The city’s figures show that Gloucester’s share of the energy credits – paid in a check from Equity – will top $340,000 this fiscal year.

Reports from the previous years shows that Gloucester brought in $101,889 for the abbreviated fiscal 2013, when the turbines were operating only from Dec. 28 through June 30, then made $276,007 in fiscal 2014, the first full year of operation.

Those numbers are based on the turbines producing 3.6 million kilowatt hours of power in fiscal 2013, 8.5 million in fiscal 2014, and – with one reporting period to go after April 21 – 8.2 million kilowatt hours this year.

Under terms of the 20-year power purchase agreement between the city and Equity Partners, Equity – which footed the full $10 million cost of building and installing the two turbines – sells the power generated to National Grid. The city then gets a share of National Grid’s payment to Equity, based on the power produces and other factors.

Dunn noted that, while the city had already generated more money this year, the turbines had, as of April, generated fewer kilowatt hours than for the full previous year. That’s due in part to National Grid’s rate increase, which also drove up the rate of kilowatt hour credits.

Both city officials and Equity’s Emerson said they remain committed to the project and the innovative private-public partnership.

The pairing was born when National Grid sought to utilize a government metering credit program that required a level of the utility’s output be through “green energy” such as wind power, Emerson said. Since National Grid did not have that capability in-house, Equity stepped up to provide the turbines. But the metering credit program required that the “customer’ be a public entity. And Equity hooked up with Gloucester as the “host customer,” which did not have to invest a dime.

Destino and Matt Coogan, the city’s clean energy director in the Community Development Department, say the project is an example of the city’s ongoing commitment to exploring alternative energy.

Coogan said the city has applied for a $10,000 grant toward a solar feasibility study, and is hoping to move forward soon.

As for more turbines, he said, “we’re definitely a good community for wind.

“It would have to be the right situation,” he said. “But if someone approaches us with the same model, that’s something we’d be interested in. They’re working.”