Last year, the state Attorney General Martha Coakley raised questions about the “operational adder” being paid by electricity ratepayers through the Cape Light Compact, calling it an illegal tax. Coakley also questioned the financial support that the compact provided to the cooperative through the operational adder charged to ratepayers. Other critics have argued that the relationship between the compact and cooperative has been shrouded in secrecy and that funding the cooperative and renewable energy projects was not one of the original purposes of the compact. In May, the Department of Public Utilities sided with the compact regarding the adder.
Yarmouth selectmen have agreed to restructure an agreement with the Cape and Vineyard Electric Cooperative and chip in an additional $5,000 annually for the next two years to help cover the organization’s expenses.
Established in 2007 to develop renewable energy projects on Cape Cod and Martha’s Vineyard, the cooperative helped plan and construct a series of solar projects in host communities, and now handles the associated administrative work. Its duties include making sure host municipalities who sign up for a share of the solar power get payments from Eversource for the generation and use of the energy.
Tuesday’s stop in Yarmouth was one of more than a dozen cooperative officials are making as they seek to keep the energy organization’s budget afloat, said Liz Argo, manager of programs and administration for the cooperative.
Yarmouth is currently a user, or “offtaker,” of energy from solar arrays overseen by the cooperative. The town has also already committed to taking 350,000 kilowatt hours from Future Generation Wind, a wind energy project set to go online in 2016. The project’s owner – ConEdison Solutions – is currently moving turbine parts from the Marine Commerce Terminal in New Bedford through Bourne to the site of the 8-megawatt project just over the border in Plymouth.
If the town signs an agreement with Nexamp, for green energy from off-Cape photovoltaic arrays, it will receive an additional 200,000 and 400,000 kilowatt hours.
The cooperative has not been charging administrative fees, known as “adders,” to participating towns on eight solar projects it helped develop on the Cape and Vineyard as part of “Round 1” of its solar production plan. The arrays, which provide 16 megawatts of photovoltaic power, are located in Barnstable, Brewster, Chatham, Eastham, Edgartown, Harwich and Tisbury.
Yarmouth’s use of energy or credits from cooperative projects will provide a net annual benefit to the town of $116,437.
The one cent per kilowatt hour charge the cooperative will add to Round 1 projects would reduce Yarmouth’s benefit by just under $5,000, Argo told selectmen.
The decision to forgo the Round 1 administrative charge, made back in 2010, was based on the belief that the adder on Round 2, a plan for 69 megawatts of power, would be more than adequate to cover the cooperative’s annual expenses.
Some of the Round 2 projects fell through, however, and the anticipated 69-megawatt total plummeted to 12.
“At 12 megawatts, that’s not enough to support CVEC, so we’re going back to the towns for a Round 1 adder,” Argo told Yarmouth selectmen Tuesday.
Another contributor to the cooperative’s current budget squeeze is the absence, for the first time this year, of an annual $400,000 grant from Cape Light Compact. The compact paid the cooperative $3.7 million since 2007. The compact was formed in 1997 to buy power for electricity customers on the Cape and Vineyard, provide energy efficiency programs and advocate for ratepayers.
The compact buys power from ConEdison for its residential customers.
The cooperative’s annual budget is $350,000. It expects to bring in about $160,000 from its share of the renewable energy projects, leaving it $190,000 short. If all towns agree to the surcharge on Round 1 projects, at one cent per kilowatt hour, the cooperative will get another $197,000, Argo said.
Tracy Post, chairwoman of the board of selectmen, said it’s well worth the $5,000 to get rid of the administrative headache of dealing with the electricity provider and managing the extra bookkeeping. Board members unanimously agreed to amend the town’s power purchase agreement.
The extra charge won’t go into effect until fiscal year 2017.
Ten towns have already agreed to make the additional payments, at a rate of one cent per kilowatt hour, Argo said Wednesday. Three towns and a county – Harwich, Edgartown, Barnstable and Dukes County – have not yet been approached.
Last year, the state Attorney General Martha Coakley raised questions about the “operational adder” being paid by electricity ratepayers through the Cape Light Compact, calling it an illegal tax. Coakley also questioned the financial support that the compact provided to the cooperative through the operational adder charged to ratepayers.
Other critics have argued that the relationship between the compact and cooperative has been shrouded in secrecy and that funding the cooperative and renewable energy projects was not one of the original purposes of the compact.
In May, the Department of Public Utilities sided with the compact regarding the adder.
The grant from the compact was never meant as a permanent subsidy, but as a temporary boost as projects got up and running, Argo said Wednesday.
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