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Wind Financials Cost Ratepayers, Taxpayers

The editors of Wicked Local Hanover painted recent bailouts as “the wild west of wind” in their May 30, 2014 editorial, calling for a state policy approach to the woes experienced by many towns like Hanover, Princeton, and Falmouth.

[some possible language, maybe here: The policy the editors recommend is the initiative rolled out last summer, intended to give municipalities guidance on turbine siting. The two elements of that process, WNTAG and Mass DPU guidance, are both stalled awaiting reports. For both panels, public input demonstrated there is no simple solution.]

In Hanover, taxpayers approved $1 million between 2008 and 2009 to build a modest turbine at the town’s water treatment facility. The treatment plant spends more than $120,000 annually in electricity costs and officials promised a turbine could save taxpayers $50,000 to $60,000 a year. Nearly six years later, taxpayers are still footing that $120,000 per year electricity bill and the turbine stands dormant on Pond Street, a victim of mismanagement and mechanical malfunction.

The editorial noting that taxpayers on the hook in Hanover are matched by electricity ratepayers being asked to bail out Princeton and Falmouth followed on the heels of a May 28 news article by Erin Tiernan, “Hanover turbine still not turning.”

More than two years after the $790,000 project was slated for completion, Town Manager Troy Clarkson said the town is owed more than $1 million in liquidated damages from the contractor, Lumus. It is unlikely, however, that taxpayers will see much of a return on those damages.

In the Worcester Telegram and Gazette, John J. Monahan reported on May 23rd that during the state budget process,

…the Senate approved an amendment from Sen. Harriette L. Chandler, D-Worcester, aimed at bailing the Princeton Municipal Light Department out of a financially troubled clean energy project.

If agreed to in a House-Senate conference committee for inclusion in the final budget and approved by the governor, the amendment would allow the Massachusetts Clean Energy Technology Center to spend up to $2 million from the state Renewable Energy Trust Fund to purchase renewable energy certificates from the department. Normally the town is not eligible for those funds.

The town invested heavily in new wind turbines but town officials said their wind farm near Wachusett Mountain has resulted in higher than expected debt costs, energy production and repair costs along with less than expected energy output. Without the assistance, town officials said its 1,500 customers are paying on average an additional $480 annually over their investment in wind power.

But while Chandler’s action may relieve ratepayers in Princeton, the funds being tapped were charged to the customers of commercial utilities (MGL Ch25 Sec20). Municipal light customers are exempt from paying the surcharge. In addition to bailing out Princeton (which has not yet been approved as of this post),  another $1.8 million from the purchase of certificates by the Renewable Energy Trust fund will assist Falmouth’s finances over the next 15 years, according to Lauren Dezenski, reporting in the Cape Cod Times.

 

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