October 1, 2015
Rhode Island

Portsmouth wind turbine extension decision again delayed

By Jim McGaw | September 29, 2015 | www.eastbayri.com

PORTSMOUTH – For the second time in two weeks, the Town Council Monday night delayed a decision on extending the contract between the town and the company chosen to replace the inoperable wind turbine at the high school.

This time, the panel continued the matter until the next regular council meeting on Tuesday, Oct. 13. (The council is meeting on a Tuesday, rather than Monday, due to the Columbus Day holiday.)

Voters approved building the turbine with a $3 million bond issue in 2007. The windmill was built in 2009 but has been idle since 2012 due to a faulty gearbox supplied by a company that has since gone bankrupt.

In November 2014 the council voted to enter into a contract with Wind Energy Development (WED) of North Kingstown that would allow the town to pay off the remaining debt that’s left on the turbine. Under the agreement, WED was to pay a lump sum of $1.45 million to the town. In exchange, the town would buy energy generated from the new 1.5-megawatt turbine over a 25-year period at a rate of 15.5 cents per kilowatt hour.

WED was given 180 days from the start of the contract to satisfy a series of conditions to move forward, but in May the company requested and received from the council a 120-day extension to meet those conditions.

WED, however, is now requesting another 90-day extension to Dec. 31, said Stephen Brusini, attorney for WED. The extension will give WED time to forge an agreement with National Grid on connecting the new turbine to the grid, he said.

The decision on the extension was delayed until Oct. 13 to give the company time to come up with a plan for a $150,000 escrow account that had been requested by the council as built-in protection for the town should WED go bankrupt.

Although Council President Keith Hamilton had requested an up-front payment of $150,000, Mr. Brusini proposed that WED take out a five-year restoration bond to fund the escrow account.

Electric rates

Council members also discussed the town’s 25-year agreement with WED regarding electric rates. Under the contract with WED, energy generated by the turbine will cost the town 15.5 cents per kilowatt hour, which is about what it’s paying now, according to Finance Director James Lathrop.

However, if National Grid’s rates exceed 15.5 cents, the town will pay the market rate for the remainder of the contract.

“Anything below 10 cents, the town loses out as opposed to the town making money,” said Mr. Hamilton. “If electric rates continue to rise and get to 15.5 cents, it’s a good deal for town going forward.”

Addressing a question by council member David Gleason, Mr. Brusini said WED would not be willing to renegotiate the 15.5-cent rate because it wouldn’t be economically viable for the company, which is already picking up the town’s debt. He added that Portsmouth is the only community in which WED has agreed to pay off any outstanding debt.

“It’s still a question of whether we want a turbine spinning in town, or do we want Fort Butts the way it used to be,” said Mr. Gleason, adding that he was in favor of granting the extension.

“We’ve come this far,” he said.

URL to article:  https://www.wind-watch.org/news/2015/10/01/portsmouth-wind-turbine-extension-decision-again-delayed/