Selectmen, Council Move Final Solar Contract To Hearing, Town Meeting

By John Voket

In back-to-back meetings August 15, the Board of Selectmen and Legislative Council both approved the required aspects of a 20-year contract that, if approved next Monday at a town meeting, will see a state-of-the-art solar generation project installed on the roof at Newtown Middle School.

In a special meeting Wednesday morning, Selectmen Will Rodgers and James Gaston approved changes in language and terms of the contract that had already been endorsed by the Legislative Council. As a result, the council had to reopen discussion on the contract later that evening, and approve the new proposal.

With Councilman George Ferguson casting the sole dissenting vote, the council’s approval clears the way for the proposal to go to a public hearing and subsequent town meeting. The Board of Selectmen will conduct that public hearing Monday, August 20, at 6 pm at the Newtown Senior Center, 14 Riverside Road, followed by the town meeting at 6:30 pm.

(The full text of the contract is available for review at newtownbee.com)

During presentations before the two boards Wednesday, Public Works Director Fred Hurley outlined a number of new elements that had been negotiated into the agreement with the developer, Altus Power Funds, LLC. Mr Hurley told The Bee that these new provisions could be worth as much as $200,000 more to the community than the originally endorsed agreement.

“The big one was really for [school district facilities director] Gino Faiella, which was the agreement that the contractors would handle any cleaning of snow or debris on and around the system,” Mr Hurley explained. “Gino’s concern was the potential for his crew or contractors to damage the hardware. But this change in the contract makes the developer responsible.”

Mr Hurley said in the event of heavy snowfall like Newtown experienced in recent years, that provision alone could be worth tens of thousands of dollars annually.

The other significant new provision was increasing the length of the contract from 15 to 20 years. By lengthening the time the system will remain on the middle school roof, the town will now be positioned to acquire the system from the developer at the end of the new lease term for the price of one dollar.

“While the decision to take ownership of the system will be in the hands of town officials at that time, at the 20-year point, the system will still be operating at 80 percent efficiency and will still have 10 years remaining on its warranty,” Mr Hurley said. “Adding those extra five years could mean as much as an extra $100,000 to $200,000 more coming back to the town over the life of the lease.”

Added Revenue Sharing

The new contract has also included a provision for a revenue sharing opportunity tied to a capacity credit program. Mr Hurley described the mechanics of this provision as “somewhat complicated,” but he said it essentially means the town could receive additional money over the life of the lease by supplementing generation of electricity back to the grid during times of peak usage demand.

Mr Hurley previously explained that Newtown was among 84 applicants selected for the current program out of 296 applications following the successful bidding for zero renewable energy credits or ZRECs. The program has been mandated by the state’s Public Utility Regulatory Authority (PURA) for projects in communities covered by both Connecticut Light & Power and United Illuminating.

The town will not expend funds, nor be required to borrow or bond for the project, because all the hardware, installation, and maintenance under the lease is covered by the vendor. If approved, the ZREC subsidy will generate about $28,000 per year to the vendor, while providing the Newtown school district with a flat 20 percent discount on the total amount of generated electricity from the middle school panels at the existing rate.

The projected savings to the town will be between $4,000 and $6,000 per year, Mr Hurley said.

Program Has Skeptics

Alex Kragie, a special program liaison to the state Department of Energy & Environmental Protection (DEEP) told The Bee that the program’s rollout at the state level has had its skeptics, but in the big picture, there are not a lot of “too good to be true scenarios” among the latest round of projects.

“The program is part of the governor’s commitment to clean energy, but more importantly, it’s a way to increase the generation of clean electricity at a lower cost compared to other state programs,” Mr Kragie said. “We asked developers to put these projects together in a competitive environment to win ratepayer funding, and essentially those with the sharpest pencils or those projects generating the closest to existing fossil fuel costs win.”

The DEEP official said the goal is to see how far down the state can drive the end user costs for electrical generation. Mr Kragie said Newtown was smart about how it approached its participation by putting the project out to bid.

“Once the project is on line, CL&P will buy the energy and that generation will offset the existing bill for the school district,” he said. According to the final negotiated deal, Mr Hurley said CL&P will pay the developer $.065 per kilowatt on top of the offset to the town.

Mr Kragie said the state’s role is to “ensure the developers profit on the installations is not ridiculously high.”

“Instead, we will subsidize these smart investments in energy developments that are producing energy at the lowest possible cost,” he said. “All Newtown has to do is turn over the space. The reason for these state partnerships is because few towns have the expertise to do something like this in-house.”