NEWBURYPORT — In a shift from previous assertions he'd act alone to sign a power purchase agreement for the largest solar panel array in the state to be affixed atop the Nock Middle School, Mayor John Moak has decided to first put the decision to a vote of the School Committee, saying the city's legal representatives recommended the move.
"We were going over (with city attorneys) a lot of the issues in regard to the agreement, and they felt more comfortable if the School Committee voted to accept the panels," said Moak Thursday. "It's in our ordinance that the School Committee shall have control of how the schools are used, and our attorney felt that was enough of an explanation that they should weigh in on it."
The committee will consider the matter tonight, and ultimately vote to allow or disallow the panels — an installation of 2,600 flat, SunSolar, power guard panels valued at more than $3.5 million. They are proposed to provide almost 35 percent of the school's energy needs as part of a power purchase agreement with Colorado's EyeOn Energy
But on the eve of approving what would be arguably one of the biggest projects ever considered for a building of that size in the United States, some have questioned whether the process has been unduly rushed. To expedite the process to gain the best possible deal for the city, Moak navigated around the normal bid process by getting a waiver from the state, which, the mayor notes, can be viewed as an endorsement by the state Department of Energy that the EyeOn deal is worth aggressively pursuing.
According to the terms of a power purchase contract being negotiated with EyeOn, Newburyport will not pay for the panels up front and will not own or be required to maintain them. Newburyport would, however, be obliged to pay EyeOn 14 cents per kilowatt for any energy created by the panels, escalating 4 percent each year for the 20-year life of the agreement. Per the current contract, Newburyport would have the option to buy the panels in seven years at a depreciated cost of approximately $1 million.
School Committee member Stephen Cole expressed concerns last week that the deal might have some hidden costs, however, particularly with regard to the age of the Nock Middle School roof. The roof has been slated for future replacement at the first possible opportunity due to weaknesses throughout.
Committee member Stephanie Weaver expressed similar concerns should the city have to pay to remove the panels after installation and replace the roof mid-contract.
"The integrity of that roof has a history of problems," Cole said, adding while some repairs were made at the time of the science lab upgrade in 2007, the remaining portions may not be able to withstand the weight of this proposed solar installation.
"It's a lot of weight," said Cole. "I've found a number of areas where the weight could be an additional 5 pounds per square foot or more."
The Minneapolis Convention Center was slated up until recently to move forward with a power purchase agreement with EyeOn Energy for a $5 million installation of solar panels, until it was discovered that the roof was not sound. It will now address its roof troubles and aim for a 2009 installation.
"If you have a roof that is 12 years old and you might have to replace it in eight years, it's unwise to put $5 million solar array on that roof," said EyeOn's co-founder and president Alex Kramarchuk in a Sept. 12 interview with Dolan Media Wire.
Cole also feels uncomfortable with what he perceives has been a rushed process, which Moak urged last week was necessary in order to cement a deal with EyeOn.
It's the mayor's belief the federal tax credits set to expire at the end of 2008 and increased competition for such a deal next year will make the deal less lucrative for the company, which will subsequently affect the city's rate. Moak stresses that the contract has been closely scrutinized by the city's lawyers.
Cole said correspondence recently received by the mayor, School Committee and City Council members from a Massachusetts-based solar provider named Nexamp has left questions in his mind, and concerned him the city might be rushing into the process without getting the best possible price or terms.
Nexamp's President Daniel Leary offered to the mayor that his company could match or improve upon the terms cited in EyeOn's contract, and cited Nexamp was responsible for the bulk of solar installations going on in the state.
"We are building about half of the largest projects in the state, including the largest here in North Andover," wrote Leary.
In his pitch to the city, Leary also said his company was of the belief the tax credit set to expire Dec. 31 would be renewed by March 2009 and be retroactively applied. Leary felt completing the installation by the end of this year was a stretch, considering the time it takes to file application to get hooked up to the grid. He added the city may be on the hook to provide the 30 percent tax credit to EyeOn if the installation doesn't finish by Dec. 31.
"I think there's really no need to rush," said Cole. "I think they're going to extend this. These credits have been available since 1998, and the fact we're scrambling now — there's no need to. This rush, rush, rush to get it kicked off is causing more questions than answers."
The following motion will be brought to the School Committee tonight:
Motion: Move that the School Committee approve the alteration of the Rupert Nock Middle School pursuant to Section 34 of the Newburyport Charter to allow for the installation on the roof thereof of a photovoltaic solar energy system for the generation of electric energy to serve the needs of the Middle School pursuant to the terms of the Power Purchase Agreement between the City and EyeOn Energy, Ltd. to be executed by the Mayor. The final agreement will be reviewed by school administration and/or school committee representative prior to final approval and signature by the Mayor.