Sunday, February 14, 2010

Eco-Industrial Park Presents Its Case

This past Wednesday evening about twenty-five people attended the Tiverton Economic Development Committee’s regularly-scheduled meeting to hear first-hand where the proposed 650-acre “green” development was in its evolution. While the crowd gathered inside the Judson Street Community Center was small, it was far from silent.

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/)

8 comments:

tillerman said...

This sounds like a very positive development for the town of Tiverton and for the East Bay area generally.

gerlach kids said...

it does sound like it could be good, even great. i can't help but be skeptical of this guy Felise. he's NOT an environmentalist he's a guy who makes money. now he's identified renewable energy as a money-maker so he hopping on that band wagon. my concern is that he will err on the side of his (and his investors) best interest ($$$) rather than what's best for Tiverton or the environment as a whole. i just hope he doesn't turn out to be a "Once-ler".

Ginger said...

Hi Bill, Sorry not to say hi at the meeting the other night. There was so much focus on the turbines that I too felt like I wanted to know what the other phases would be comprised of.
I also took away from this meeting that they are looking for Tiverton's cooperation with a request for a letter of support from Town Council ... although the letter is not necessary to continue their permitting pursuits and ultimate installation.
Yes, they are capitalists ... and will be making $$$ on this project. I still see it as a win for Tiverton ... they need us and we benefit a bit ... and they want to make a profit. If they do the latter well, that will keep the plans in motion for more jobs in Tiverton.
I did catch, I hope by mistake, that he mentioned the conservancy area would be where the quarry was ... now THAT is not conservation land! Hope I misheard that one.
Best to you, Ginger

BILL GERLACH said...

Sara -- Nice reference to "The Lorax"!

Ginger -- I didn't even know you were there! I didn't pick up on that detail regarding the conservancy. I agree, not much value in that. I wonder if they have a more robust illustration on how that entire area might look like at the end of longer-term development (commercial, residential, etc.). Then you might have a better sense of how the conservancy plans might play out.

Rebecca said...
This comment has been removed by the author.
Gerald said...

I appreciated the blog posting by Bill Gerlach; his description of our Energy Business Model was right on target. The annual repetitive factors of corporate revenue contributions, property taxes and land lease revenues, irrespective of the indirect impacts, stand to exceed $40 Million over 20 years and the consortium participation should exceed some $13 Million during that same period.
I extend an invitation to Mr. Gerlach to come visit with us at our office at 896 Fish Road as we would do our best to answer some of his unanswered questions. Give me a call at 401.640.7198.

In response to the “gerlach kids,” maintain your skepticism but consider that under capitalism all property is privately owned. Consider the privately owned locks and streams of Scotland that are far cleaner than the government owned cesspools of socialist India.

Granted history to date has shown us that industrial capitalists across the globe have not been good stewards of their property or resources. That being said, sustainable visionaries I have worked with over the years, such as Nell Newman (Newman’s Own), John Mackey (Whole Foods) and Ben Cohen (Ben & Jerry's), have, like myself, been striving to create a “Green Capitalist Business Model” with a social conscious that competes in the market place without government subsidizes. The Carbon Neutral Business Model for eCo Industrial Park will deliver a competitive sustainable community model that will become a standard for all future sustainable development.

I did not wake up on the morning of November 5, 2008 and “Green Wash” my soul preparing to get on the green money train that was coming down the track. My epiphany took place in 1980 some thirty years ago when I woke up to find my construction crew had spent a year renovating a large Chemical Plant in New Jersey that ended up being designated as a “Super Fund Site” by the EPA. The property owners were aware of that status when we embarked on the project but failed to warn us of the toxic conditions.

I was considered a logistical expert for the Chemical/Petroleum folks; I also spent seven years as one of the pioneers in the globalization of transportation through containerization. It was during that period of time I was exposed to Sustainable Agriculture and Energy. I personally embraced the precepts of Sustainability. Sustainable development is development that meets the needs of the present without compromising the ability of future generations. It integrates the “three pillars” of social, environmental and economic sustainability. It is from within these values I have put forward the eCo Industrial Park development project.

If I could just add a final word to “Ginger” – you did catch my statement correctly that one of the conservancy areas we will be designating will be where the quarry is presently located. I agree with you that in its present state it is not conservancy material. Prior to donating the quarry area to a conservancy, it is our intent to perform extensive restoration. Under consideration is the creation of an aquifer source of a fresh water supply, wetlands and wildlife habitat to accommodate a wide range of native flora and wildlife, having extensive nature trails and bike paths. We found for example some of the granite faces created by the quarrying activity may be a natural habitat for the endangered species of peregrine falcons native to Rhode Island; there we would invite the Fish and Wild Life folks to participate with us in encouraging their taking up residency in our conservancy. We are working with our master planner to incorporate this planned environmental activity. During this process we intend to reach out to Fish and Wild Life both at the state and federal levels, as well as local conservancy and environmental groups seeking their participation in this endeavor.

Thank you, to everyone, for your smart, interesting, and thoughtful questions – Gerald V. Felise

BILL GERLACH said...

Mr. Felise,

Thanks for taking time to visit and provide some additional commentary and perspective. I would very much like to talk more and will drop a line as soon as I can.

This post was picked up and published by ecoRI.org as well (http://www.ecori.org/eco-development-proposed-for-6/). You might consider posting similar comments there. Thanks again.

Gerry said...

Mr. Gerlach -- our pleasure to have submitted the additional commentary. Please contact my assisant, Rebecca, and we will set up a meeting that works best for your schedule. Thanks again -- Gerry Felise