National Wind Watch: Wind Energy News » Repayment on Wind 2 could include interest

FALMOUTH – Town leaders have long warned that if Wind 2, one of its twin wind turbines, is shut down the town would be forced to repay a $5 million clean-energy loan that was due to be forgiven.

And recently they said it is possible the town would be charged interest on the amount, too. Now, town officials say, it’s official.

The town got a $4,865,000 loan from the Massachusetts Water Pollution Abatement Trust to construct the turbine, which was installed and commissioned in 2012 at the town’s wastewater treatment facility on Blacksmith Shop Road. The trust used funds from the 2009 American Recovery and Reinvestment Act to finance the loan, which was interest-free and meant to be forgiven as long as the turbine continuously runs as a source of renewable energy.

But with the potential that the town’s Zoning Board of Appeals will shut down the turbine, the loan forgiveness may also be blown away. How much extra it would cost the town, however, is still unclear.

“On a $5 million loan, it would be substantial, no matter what the interest rate is,” said Doug Jones, chairman of the Board of Selectmen.

Town Manager Julian Suso, in an Oct. 16 affidavit about wind turbine financial matters, estimated the interest rate at 2 percent, but Jones said the rate has not been definitively established. The town was notified in 2013 that repayment of the loan could be a possibility if the turbine didn’t operate enough to qualify as an “energy efficiency” project, Suso wrote.

The turbine is already running at reduced capacity – 12 hours a day, six days a week except certain holidays – under the terms of a 2013 court order. Although the trust hasn’t specifically outlined how often the turbine must run for the town to receive the loan forgiveness, Jones said there’s been no indication that the current operation is insufficient.

“They have not said it’s satisfactory, but they haven’t said we’re in trouble,” Jones said. “We’re interpreting their lack of change on that as acceptance.”

The town announced the development related to the loan in a statement sent out at 3 p.m. Nov. 23, the day before Thanksgiving. Jones said town Finance Director Jennifer Petit got word from the Water Pollution Abatement Trust that day about the potential interest charges while preparing to refinance other town debts. Both Petit and Assistant Town Manager Heather Harper declined to comment this week.

Although the release bore Suso’s name, he was out of the office last week and for much of this week. Jones said Harper wrote the release at his instruction and got approval from Suso before posting it on the town’s website.

Thursday, Suso said there had been no “absolute mandate” that the Wind 2 loan would be repaid with interest until recently.

“This confirmed that possibility is paramount,” he said. “Things are tightening.”

The twin turbines have been a source of controversy since they were installed. Neighbors have complained about health effects from their operation and have used a number of avenues to try to shut them down, while the town has warned of dire financial consequences should either turbine be deactivated.

The town is applying for a special permit for Wind 1, which began spinning in 2010, after the state’s Appeals Court ruled earlier this year that the 397-foot-tall tower should have received a permit before it was constructed. Building Commissioner Eladio Gore had ruled that, since the turbines were owned by Falmouth and being installed on town land, zoning laws didn’t apply.

While the special permit application process is under way, Wind 1 is shut down based on the zoning board’s issuance of a cease-and-desist order against the town.

Wind 2 could see a similar fate depending on the zoning board’s decision on two other Wind 2-related hearings. The board closed hearings Nov. 17 related to complaints by neighbors Neil and Elizabeth Andersen against the operation of both Wind 1 and Wind 2 and Linda Ohkagawa against Wind 2, and will deliberate the matters at a future meeting before making a ruling.