The company planning to build a new wind turbine to replace the broken one next to Portsmouth High School is asking for a 90-day time extension to meet a series of conditions before final contract approval is issued by the Portsmouth Town Council.
Steve Bursini, a lawyer representing North Kingstown-based Wind Energy Development, said the extension would give the company time to work out “some final interconnecting issues” with National Grid.
The council last week continued the matter to its Oct. 13 meeting during which it will likely approve the extension.
The council also gave an indication that it will likely OK a plan that would entail WED putting up $150,000 into a restoration bond to protect the town in the event the project somehow fails or WED goes out of business.
The council had asked WED to make an up front payment but Bursini said WED couldn’t come up with the cash all at once but said the bond would offer the exact type of insurance the town wants and would cover the cost of taking down the old turbine.
Portsmouth voters approved a $3 million bond to build the first turbine in 2007 and it broke in 2012. The town owes a little more than $1.6 million and the company that built the busted turbine is out of business.
Under the 25-year deal with WED, the town will get a new turbine and won’t be making annual debt service payments totaling more than $220,000 per year to pay off the old debt. In return, Portsmouth will buy electricity at a rate of 15.5 cents per kilowatt hour from WED – a figure Bursini said makes the project economically feasable.
There was some discussion by council members about whether the town was getting a good deal on electric rates. A report by Finance Director Jim Lathrop showed that the town can consider the deal a good one if regular average electricity rates are at 10 cents per kilowatt hour or above.
If energy rates fall to 7.5 cents, “the bottom line is the deal becomes more in favor of the wind developer than ourselves,” Lathrop told the council.
It was agreed that without a crystal ball, it’s impossible to predict what energy rates will be in the next few years, let alone what they’ll average over the next 25 years.
Additionally, in comparison, the 15.5 cents is much lower than the 25 cents it will cost for energy produced by Deepwater Wind’s offshore wind farm currently under construction.
A company representative told the council that average energy costs quoted at prices of 11 cents per kilowatt hour don’t include the energy transmission and distribution charges added to electricity bills. When those costs are added, the one year trailing average is actually 15.6 percent, she said.
“We think you’re getting a good deal,” she said.