May 24, 2016

Residents: New engineering firm needed for $200M wind project

Posted by Andrew Dietderich on May 21, 2016 |

FAIRGROVE – Residents from two Tuscola County townships allege a conflict of interest could jeopardize public health, safety and welfare when it comes to a planned $200 million wind turbine project near Caro.

The group of residents from Almer and Ellington want their respective townships to dump Spicer Engineering – similar to the way Sanilac County’s Moore Township did recently.

They claim the Saginaw-based firm is a little too cozy with wind developer NextEra Energy Resources L.L.C., which plans to build the $200 million Tuscola III wind project in Almer, Ellington and Fairgrove townships.

They also question who is paying for surveying work currently being done by Spicer in the area and have taken issue with what they view as a lack of effort to tailor laws specific to Almer and Ellington, respectively.

They also allege Spicer is working both sides of the fence – even point to documents posted on Spicer’s own website as what they call clear evidence that a conflict exists.

For example, a “narrative” of the Tuscola Bay Wind project in Gilford Township is posted, complete with NextEra logo and statements like Tuscola Bay “will be built with the safety and expertise of the parent company of the applicant which currently owns and operates 89 wind farms in North America.” (The document can be found here)

“Spicer promotes NextEra promotional documents on its website,” said Jim Tussey, of Almer Township. “Yet Spicer says it can represent both township and NextEra without conflict. Spicer representing the township and NextEra is like one law firm representing both the plaintiff and defendant. It just can’t be done without throwing one under the bus.”

Ellington Township’s Eric Zbytowski shared a similar sentiment.

“It is clear to us that Spicer is working for the wind developer and presents information for wind development,” he said. “They claim to be non-biased but I have not seen any evidence of that.

“To me, there’s no value in having Spicer at any of our meetings in Almer or Ellington at this point.”

Rob Eggers, senior planner/principal, Spicer Group Inc., said in an email to The Advertiser that Spicer’s work “is for the township/community.”

“It is who we contract with and who pays our bills” Eggers said. “It is the township that directs our work. In such case, we do not receive any funds from the developer.”

The Advertiser sent email requests to a wide swath of current elected and/or appointed township officials in Almer and Ellington seeking additional details and comment about Spicer and its work for the township. No officials responded with the exception of Jim Mantey, a member of the Almer Township Planning Commission.

“Good questions!” he wrote.

Who’s paying whom?

One issue frequently raised centers on how Spicer is paid for its work related to wind projects.

An exchange between Mike Pattullo, of Ellington Township, and Duane Lockwood, supervisor, Ellington Township, at the township’s May 10 meeting is typical of the line of questioning.

Pattullo asked specifically if Spicer is doing surveys for cables and/or roads for wind turbines.

“They’re out doing (surveying) for the roads, possibly,” Lockwood said.
Pattullo asked specifically if the roads would be for turbine access.

“Correct,” Lockwood said.

Pattullo then asked about payment to Spicer for that work Lockwood confirmed is being done in Ellington Township.

“If Spicer is not directly connected to NextEra, who’s paying Spicer to do all the surveys?” Pattullo asked the board.

“We aren’t,” said Lockwood, who had previously recused himself from wind-related discussions.

Pattullo responded with “Well, who is then?”

Lockwood deferred to Dan Ettinger, attorney for NextEra.

“Would you want to comment on that Dan, or not?”

“I have no information at all about it so I can’t add anything to it,” Ettinger said.

Pattullo continued asking questions, but they were not answered by the board.

“If NextEra or some wind developer is paying Spicer to go out and do all of these surveys, then how would Spicer have an unbiased approach…how can we trust them to be unbiased, to represent the township?” Pattullo asked. “Somebody has to be paying them, right? They aren’t doing it because they like the countryside.”

Ordinances like Ellington’s are typical for all developments: The developer pays for all costs “necessary for the inspection and supervision” of the project so it “complies with the provisions of the zoning ordinance.”

Those costs include everything from issuance of public notices and legal fees associated with public hearings and “any professional services necessary to inspect and supervise the development project.”

The Advertiser sent email requests to a large group of current elected and/or appointed township officials in Almer and Ellington seeking additional details and comment about how money is routed to Spicer through the accounts.

Brian Garner,an attorney who represents both townships, responded with a “statement to press.” He said it was the only response that would be provided. The Advertiser tried to learn more about the relationship between Spicer and NextEra, but those questions were ignored by public officials.

“Spicer Group is an engineering firm hired by the township to assist the township’s planning commission with the development of wind energy zoning regulation,” Garner wrote. “Ultimately, Spicer Group or a similar engineering firm will be hired by the township to inspect and supervise any wind energy development in the township.

“The developer is not paying the fees of the engineering firm selected by the township. The township is paying the fees from funds placed in escrow by the developer. The developer does not select the engineering firm to perform services for the township. The township selects its own engineering firm. The engineering firm’s duty is to the township and not to the developer. The developer uses its own engineers independent of those hired by the township.”

John McQuillan, treasurer, Fairgrove Township Board of Trustees – and attorney for Gilford Township – said escrow accounts serve as what he called a “conduit” for money from developers like NextEra to companies such as Spicer.

NextEra’s Tuscola II wind project that went into operation in 2013 is in part of Fairgrove.

The escrow account came up at Fairgrove’s meeting Monday when McQuillan provided a set of financial statements to board members and the public. Among the statements was a current balance on Fairgrove’s escrow account previously set up by NextEra. The account – which started with an $80,000 balance – is now $935. (A statement showing how the money has been spent can be found here).

He said the escrow account was set up at the time applications for special use permits were submitted, per township ordinance.

McQuillan said the amount put into the escrow account was based upon a recommendation from Spicer that took into account how much Spicer expected its services would cost, along with legal fees and other expenses – including paying township officials to participate in special meetings. Spicer also helped write Fairgrove’s wind ordinance, McQuillan said.

As charges racked up related to Tuscola II, the township simply drew from the account as needed. McQuillan said it was easier to do it that way than have a company like Spicer bill the township and then the township send the bill to NextEra, essentially tying up township funds.

“We don’t want to chase these guys for the money to reimburse us,” McQuillan said. “So we require that they pay us in advance and then Spicer submits the bill to us and we pay it out of this account.”

Then, he said, NextEra would receive a detailed statement of how the money was being spent and the remaining balance.

“It’s important to point out we do not have any discretion over how or to who the escrow funds are distributed,” said NextEra’s Bryan Garner, manager, communications. “The township makes those decisions.”

In Gilford Township, the matter came up May 12 because the township had to write two checks and close out escrow accounts set up by NextEra because it hadn’t been used for so long.

Gilford Township Supervisor James Stockmeyer said “the original amount was $50,000.”

Board members commented that “there was an additional amount added,” but that no one knew exactly what the total amount was “because we had two accounts.”

“They are liable for any costs in the process,” Stockmeyer said. “According to our ordinance, any costs that incurred…they have to pay the bills.

“So instead of us paying the bills, and sending them the bills, and doing all this stuff we set up an escrow account with their money,” Stockmeyer said during the public comment period in Thursday’s regular board meeting. “So we pay the bills and sent them statements so they knew how much we were spending.”

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