IPSWICH – After sustaining damage from a fire last fall, the town’s second wind turbine is set to sit idle for the foreseeable future.
Or, it may be taken down by the operator, Town Manager Tony Marino told the select board this week.
But the board also got unwelcome news when Marino told them the project was never bonded. This is a type of insurance developers take out to prevent municipalities paying for work associated with private projects.
The bond is important for the town because of rumors about the operator’s future.
“There has been speculation that the company may go bankrupt,” the board’s Dec. 17 minutes said.
“The bond was never put in place,” Marino said, and the town wants a guarantee of at least $150,000.
Hailed as a “win-win opportunity” when the contract was awarded in 2011, “Wind 2” is privately operated by Ipswich Wind Independence (IWI) LLC of Rockland.
The other, still-working turbine is owned and operated by the town.
A 2011 FAQ said there was no downside for the town with the public-private partnership.
“What is the risk to Ipswich? Ipswich bears no risk. [Builders] D&C Construction would fully absorb any losses in the event that the project stalls or the second turbine fails to operate,” the FAQ said.
The town agreed to purchase power from IWI at a fixed rate for 20 years but would also make $1.03 million in property taxes over those 20 years on land that was previously unused.
The turbine, which was built on Town Farm Road in 2012, was supposed to provide four percent of Ipswich’s power, or enough for around 400 homes.
However, Wind 2 coming offline has actually saved the town money because the Electric Light Department was contractually bound to pay more than market rates, said manager Jon Blair in October.
After the issue was discussed in December by the electric subcommittee and the select board, a number of questions were raised about the generator’s operator Ipswich Wind Independence.
“The fundamental problem they really had is the market shifted away from them,” Selectperson Ed Rauscher said at the board’s Dec. 17 meeting.
“It’s probably going to sit there,” he said of the broken turbine and added the town may have to “fight for things owed to us.”
Rauscher said there was speculation IWI was in financial difficulties, and the subcommittee asked in December if the project was bonded in case the company was unable to fulfill its obligations.
At this week’s meeting, Marino confirmed there was no bond on the project.
Chairman Nishan Mootafian asked if town counsel George Hall should be called in.
“If they don’t perform we’ll involve George,” Marino replied.
Selectperson Linda Alexson asked if the town has a process to prevent bond guarantees getting overlooked.
“We do now,” Marino replied, adding he was unsure what the situation was in 2012 when the generator was built.
He said the owner’s insurance company was evaluating repair and demolition options. He met with the owners last week and the insurers are “leaning towards taking it down,” he said.
Rauscher noted Ipswich Wind Independence won’t fix the generator if it is not economically viable. “They’re a private company. That’s what they do,” he said.