Sunday, February 14, 2010
Attending on behalf of The Rhode Island Renewable Energy Cooperative (RIREC), the energy systems development wing of the eCo Industrial Park, was CEO Gerald V. Felise, VP of Energy James P. Sweeney, and lead consultant Andrew C. Dzykewicz.
The formal presentation was part vision, part education, but mainly a sales pitch to the town. While prior media coverage of the project has touted the master plan for this development – complete with commercial, residential, and energy production components – the RIREC team focused solely on the latter on Wednesday night. As they put it, if the first phase of the project (energy systems development) can’t move forward, there is no value in the rest.
The driving force behind the RIREC is the allure of what could be a lucrative renewable energy facility boom in the East Bay area thanks to the recently formed East Bay Energy Consortium. Currently comprised of Bristol, Warren, Barrington, East Providence, Portsmouth, Little Compton, Tiverton, Middletown and Newport, the Consortium aims to basically develop renewable energy facilities in bulk, and then reap the resulting energy production benefits by leveraging current net metering laws. Such laws allow municipalities to be paid (by National Grid) the full delivered price for energy produced at town-owned facilities up to a certain limit.
The resulting RIREC business model is relatively simple: Aggregate all Consortium-related development into one location to take advantage of economies of scale and keep development costs at a minimum. Finance, build and maintain the facility for participating EBEC member municipalities at no upfront cost to the towns. National Grid then purchases the energy from the Consortium members at a fixed rate. In turn, Consortium members contract with RIREC and pay a set of monthly fees for lease of the energy equipment, ongoing operations and management of the facility, and an overall management. Some of these fees are fixed, others variable.
What is on the table for this Tiverton location is a multi-faceted energy systems development comprised of approximately twelve 2-megawatt turbines, 24 megawatt’s worth of photovoltaic solar panels, and 96-megawatts of energy storage capability. Spread out over the entire 650-acre footprint, these elements will only occupy about 10 percent of the total land area. According to data gathered by RIREC, these combined energy systems will generate 83,522 megawatts of electricity when fully operational.
The turbines would be built first, aided by on-site manufacturing of the towers in to-be constructed facilities. Of particular note was the claim from RIREC that these towers would be constructed out of a new, lightweight carbon fiber instead of the traditional steel. Details about this were scant, only that RIREC was currently in discussions with a company for licensing this technology.
What does Tiverton get with this deal? According to the high-level financials provided, as host to the project the town stands to gain significant amounts of revenue through annual corporate contributions from RIREC, property taxes, operating income from the energy production units, and indirect income gained through activities related to the construction phase such as jobs and in-town business spending. All total, revenue over the life of the project is slated to be around $23 million. If it also participates as part of the Consortium, Tiverton stands to gain an additional $669,000 in revenue annually for at least twenty years through net metering.
If such dollar signs didn’t make the deal sweet enough, RIREC delivered the equivalent of icing on the green economy cake with the promise of sourcing jobs to Tiverton residents and businesses first. What could not be filled in Tiverton would then be sourced out to participating Consortium members.
The price tag for all of this: About $120 million according to RIREC. The entire amount will be privately funded and is in place. All that is required to move forward with construction is the review and approval of the Rhode Island Energy Facility Siting Board (and the subsequent signing of all those contracts and related paperwork). According to RIREC, this decision is slated for April 16, 2010. And while the project does not need the permission of the Town of Tiverton to move forward, having the Town issue a statement of partnership would greatly add to the collaborative model RIREC is hoping to forge with Consortium members. The project has already been endorsed by Governor Carcieri.
All that said, those in attendance peppered the three RIREC executives with plenty of questions. From clarifying wind data to pressing the validity of the stated financials to calling bluff on RIREC’s claim that the entire project could be online and operational by the end of 2010. Not shying away from the robust Q & A, the executives did their best to quell the curiosity. Only the facilitation of Tiverton Economic Development Committee members kept the discussion from lingering on.
At the conclusion of the presentation, members of the Tiverton Economic Development Committee stated that they would deliberate on the discussion and consult with the Town Council on how best to move forward.
My personal thoughts: On paper, it is quite a sell. As a strong proponent of renewable energy development I have a natural bias. But this is big – really big – with the potential for more ups and downs than this small town is used to. But that’s no reason to not continue the exploration and dialogue.
Unanswered questions in my mind include: How will claims by RIREC to keep much of the 650 acres in conservancy play out over the course of the entire multi-phase development? What is the potential impact to the Stafford Pond area on the eastern edge of the acreage? How will the town weigh the potential risk of lower energy prices (which would chip away at the revenue it stands to gain) in its deliberations?
Enough of what I think? What do you have to say?
If you’re interested in PDF copies of the RIREC presentation of business case, email me and I’ll send them to you.
(Photo Credit: Evan McKern via Flikr, http://www.flickr.com/photos/evanmckern/1092730012/)