NEWBURYPORT — Mayor John Moak is going back to the drawing board this week after losing hope EyeOn Energy of Colorado will make good on its contractual promise to fund $3.5 million worth of solar panels for Nock Middle School.

Following the company's announcement that investor Morgan Stanley had lost interest in funding the project, the city put out a Dec. 5 request for proposals, to which nine companies have now responded.

Representatives from those nine firms went to City Hall yesterday morning for a pre-bid meeting, and it was the first time local companies like Nexamp of North Andover and Borrego Solar of Lowell got a thorough look at the project that was initially granted a waiver of public bidding laws from the Department of Energy Resources.

Moak said last night he was reluctant to let EyeOn go for fear the new power purchase companies vying for the work might not be able to meet the terms of EyeOn's contract, which promised to pay for the system and charge Newburyport 14 cents per kilowatt hour with a 4 percent annual escalator for energy created by the system.

EyeOn announced in early November that Morgan Stanley had pulled out of the 500-kwh project, and it requested more time to find an alternate source of funds. Moak said he was willing to give them until after Thanksgiving.

But after weeks of waiting, Moak said yesterday that EyeOn would be informed via letter that the city is opting out of its contract and pursuing other firms capable of handling the 50-kwh installation and power purchase agreement.

Having spent $20,000 out of pocket on legal fees and shoring up the rooftop of the Department of Public Services building per its power purchase agreement with the company, the city is left in the position of either sticking with the financially-strapped Colorado company indefinitely or finding another firm.

At risk for Newburyport is a $1.6 million Massachusetts Technology Collaborative rebate, $400,000 of which was slated to stay with the city per its EyeOn contract. Moak had planned to offset some of the costs the city has laid out to shore up the DPW roof with that MTC money, and coupled with the project's mounting legal fees, the expenditures make pursuing the project to the end worthwhile.

The city initially bypassed seeking public bids after Energy Advisory Committee Member Jeffrey Wootan was granted a waiver in order to allow the city to work exclusively with EyeOn, based on the fact that Wootan, well-connected in solar circles, had begun negotiating with the Colorado company prior to a change in state laws created for public green projects like a solar array.

The specter of conflict of interest was raised at the time due to Wootan's employment with a subcontracting company slated to handle installation and procurement on the deal, prompting an anonymous request to the state Ethics Commission for an investigation.

Further questions later arose over the financial stability of EyeOn, given that its company headquarters is currently in foreclosure for the fifth time since 1996.

Wootan was back by the mayor's side yesterday morning acting as a solar consultant on the city's behalf. He laid out for Nexamp, Borrego, Tioga, Ameresco and five other attending company representatives what the city would be looking for in terms of design, scope and technical specifications on the Nock and DPW jobs.

Most important for prospective bidders, Moak and Wootan told the group the city wants to keep the $400,000 in MTC rebates it negotiated into its contract with EyeOn. That would allow the city to offset unforeseen expenses and to compensate for potential energy price dips that might make Newburyport regret locking in at higher energy costs down the road.

Second, Moak and Wootan want the scope of the work to stay as close to the original 500-kwh design plan as possible, so that the $1.6 million rebate approved by MTC remains at the city's disposal. And it wants its bids in an expedited fashion — by Dec. 29.

"It's been out there for so long it shouldn't be a problem," said Moak. "But if we have to, we can put it off a week if we get a lot of complaints."

Both Nexamp and Borrego have stated that unlike EyeOn's financiers, their financial partners are ready and able to finance the Newburyport project moving forward.

"These are very conservative organizations," said Cara Moreno of Borrego Solar. "It's a very rigorous process that they go through to vet the company that they do business with."

"We have a strong network of PPA (Power Purchase Agreement) partners that we work with," Moreno added. "We have a lot of different avenues that we can pursue, which has allowed us to remain nimble and flexible at a time when credit's really drying up everywhere."

Nexamp's Jon Abe agreed, stating his company was worried about the kind of credit crunch currently affecting EyeOn and other solar companies, and sought financial backers that could withstand tough economic conditions.

"We saw this coming for a long time," said Abe. "Our investors are banks that were hurt, but not as exposed to the credit crisis as some others. We're in frequent contact with our investors. Things have changed but there's still a green light to go forward with these projects."