Dummerston skeptical of solar deal
DUMMERSTON -- Not so fast.
That was the message from Dummerston Selectboard after hearing a pitch to participate in a privately developed, net-metered solar project.
Several area towns and schools have signed onto similar deals, and the contracts offer guaranteed utility-cost savings. But some Dummerston officials were skeptical about the potential liability -- and the actual environmental benefits -- of such projects.
"The real advantage to this is for the investors and for the people who are going to use the carbon credits to pollute anyway," Selectboard member Steve Glabach said.
Solar-power developers have been soliciting governmental entities to be partners in privately developed, privately financed photovoltaic projects. The private investors take advantage of tax credits associated with such development, while towns and schools -- under the mechanisms of Vermont's net-metering law -- receive credits on their power bills.
Recent examples locally include deals that Westminster-based Soveren Solar struck with Brattleboro schools and with the town of Townshend.
In Townshend's case, the solar panels are to be located on municipal land at the former town dump. But partners in solar projects don't have to host the panels in order to receive utility credits.
That would be the case in Dummerston, where Waterbury-based Green Lantern Capital is asking the town Selectboard and Dummerston School Board to partner in a 500-kilowatt solar project to be built on 3.5 acres in Westminster.
Green Lantern Managing Partner Luke Shullenberger said the town of Putney already is the anchor customer for that system.
"We'd really like to have you participate in the project," Shullenberger told Dummerston Selectboard. "But to be candid, regardless of your decision, the project will be built."
Shullenberger took pains to explain the proposed deal, which requires no investment from the town or from the school. The same basic agreement is "working well" all over Vermont, he said.
"We go in and lease the land, work with the landowner. We build the project, finance the project," he said. "And then we work primarily with school and municipal customers who, for one reason or another, are unable to make the up-front purchase of a solar system work (but) want to participate in solar in some fashion."
"One of the challenges for public sector customers is that you don't have the ability to take advantage of the tax benefits because you're a non-taxpaying entity," Shullenberger added. "And the tax credits are really integral in the financing of these projects. They're really what make them work. So we bring in investors who can use the tax benefits. It's a nice arrangement for everyone."
The town and the school, he said, would see financial benefits via credits on their electricity bills. Though the governmental entities would be required to turn over 90 percent of those credits to Green Lantern, there still would be financial savings.
The town of Dummerston budgets about $5,000 annually for power costs and would save an estimated $400 to $420 under this contract, officials said.
The school is a much-larger energy consumer, spending about $25,000 annually for electricity. Shullenberger estimated the school's savings under the net-metering solar agreement at $2,600 to $2,700 per year.
The proposed deal has received enthusiastic backing from Dummerston Energy Committee, which notes that the town plan calls for reducing consumption of nonrenewable energy.
"The school is our biggest energy user by huge magnitudes," committee member Bill Conley said. "And from the energy committee's perspective, it's been the building that we most want to look at."
Conley added that, "I see a benefit. I don't see any risk."
That's because Shullenberger repeatedly assured Selectboard members that his company and the project's private investors assume all costs and liabilities for the short term and long term, including the costs of maintenance and eventual decommissioning.
"All risk of ownership is on us and our investors," he said.
He made clear, though, that nothing less than a 20-year commitment from the town and/or the school would do. That term matches the project's financing period.
"I want to be very clear that, if a 20-year agreement is something that you're not prepared to do, then I think this program is probably not right for you," he said.
The length of the deal bothered Dan Normandeau, a Dummerston school board member. While the school board has not yet made a decision, Normandeau said he won't be in favor of signing it.
"I'm not going to recommend that the school enters into a 20-year commitment for the nominal savings that we'll get," Normandeau said.
Other officials raised questions and concerns including:
-- Selectboard Chairman Zeke Goodband wondered why Green Lantern needs the town at all.
"We're not putting any money in," Goodband said. "We've got no skin in the game."
Shullenberger said governmental entities make attractive partners for the purposes of obtaining financing.
"We need you as a net-metered customer," he said. "Because you are a school -- a supervisory union -- and a municipality, investors and lenders consider you to be a very good credit risk because you're not going anywhere. You're going to be here 20 years from now. You're going to continue to pay your bills as you've always done."
-- Glabach said he's concerned that "carbon credits" associated with the project would be sold, with buyers using them as an excuse to pollute elsewhere.
"Even though it sounds green, I guess I'm questioning how green we are in the end," Glabach said.
-- Officials and a resident in attendance worried that the solar project may impact prime agricultural land in Westminster. Board members said they would look into that.
-- Some wondered about the fate of the project if the state's net-metering law changes. Shullenberger said that's not a concern in this case, since the project is scheduled to move forward soon.
"Any project that is permitted and built under the current statute is grandfathered in," he said.
-- The question of whether the town and school need voter approval to enter into a long-term solar agreement also arose.
Shullenberger said he does not believe a town vote is necessary.
"This is not actually a capital expenditure," he said. "You're not actually encumbering taxpayer dollars."
Shullenberger said Green Lantern needs a decision from Dummerston officials by next month. Selectboard members said they need time to have more questions answered and to have the proposed contract reviewed by the town's attorney.
At least one member of the board, however, said he saw benefits even in relatively small financial savings.
"If we had a couch in here, I'd be checking the cushions for change during budget time," Goodband said.
Mike Faher can be reached at email@example.com or 802-254-2311, ext. 275.
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