WINCHESTER - To save money on the costs associated with solar energy such as demand, distribution, peak charges, and fees from Eversource (the company who does the billing), the Select Board voted to enter into contract negotiations with Clearway Community Solar and receive a 10 percent discount on this portion of the town’s power bills. According to Jessica Wall, from Anderson & Kreiger, the town’s legal counsel. negotiations are almost complete.
She added she’s hopeful for a contract by August.
The town hopes to lower the costs associated with delivering solar power to buildings like the high school and Vinson-Owen School, because those costs are steadily rising, according to Energy Conservation Coordinator Susan McPhee, by as much as 62 percent.
She added, “the utility charges us what they can get approved by DPU (Department of Public Utilities),” such as for wires, poles, billing, the grid, etc.
Once the deal with Clearway Community Solar receives approval by both sides, the town can begin to reap the rewards of the discount that McPhee noted won’t change. She said it’s because Eversource commits to increase renewable energy every year.
“We are committing to use X amount of power from Eversource for the next 20 years. We are committing to the ‘demand’ portion of the bill,” according to the Energy Conservation Commissioner.
McPhee informed the Select Board how the town’s electricity will only rise as it moves away from fossil fuels and towards electricity for heating and cooling. And, as the deal requires the town to supply a certain amount of energy, McPhee stated she’s “comfortable committing that our demand will not drop below the level committed in this project.”
Wall stated she had the contract examined by Cadmus, a strategic and technical consultancy company, who called the pricing “fair and reasonable.” McPhee added there were no surprises.
The one holdup concerned the termination fee and how much the town would pay if it defaulted (i.e. the town isn’t credit worthy or goes bankrupt) or bailed out for convenience (not interested in going further). McPhee didn’t anticipate either of those two scenarios occurring. Wall said the fee, which she stated at a previous meeting would be $1.1M, was confirmed and would be reflected in the final contract.
Originally, the termination fees were much higher, which was the biggest issue for the town, said Select Board member Mariano Goluboff. However, Town Counsel worked with the company to lower the potential cost if the town pulled out or defaulted.
This program is a part of the state’s SMART solar program, as Governor Charlie Baker retooled all solar incentives. SMART is tariff based, with the utility paying the developer. It is a solar “adder” that allows the developer to apply for a higher incentive rate.
McPhee called community solar “a piece of ‘value stack’ created with large scale renewable projects” and said other “value stacks” include selling the power to Eversource, an investment tax credit, a state tax credit, and SMART incentive payments from Eversource.
When creating projects under SMART, McPhee said, developers assign demand (the town) at least three per project, and Winchester receives a 10 percent incentive for being the off-taker listed on their projects.
Wall said Clearway has no issue with the board approving the final contract at its Aug. 3 meeting.
“They know we’re serious,” McPhee added.