Wind Turbines Cost Taxpayers In Contract
Posted in the Fairhaven Forum
#1 Aug 27, 2013
Your View: Who put Fairhaven in financial jeopardy?
By CURT DEVLIN
Curt Devlin lives in Fairhaven.
August 27, 2013 12:00 AM
Friends of Fairhaven Wind would have you believe that proponents of shutting the turbines down put the town in financial jeopardy from its litigious friend, Gordon Deane. A close look at the contract, however, tells a very different story.
The 2007 contract was signed by then-selectmen Chairman Ron Manzone, and two other members of the board, Michael Sylvia and Brain Bowcock. The developer was Jim Sweeney, president, CCI Energy LLC. Much of the negotiation was apparently handled by Executive Secretary Jeffrey Osuch and reviewed by town counsel Tom Crotty.
At that time, Sweeney was the proud owner of two turbines, with no place else to put them. The town held all the cards; but instead of a sweet deal; the town seems to have gotten most of the risk and Sweeney got most of the financial reward. This contract was a bad pony out of the gate.
Osuch predicted town revenue based on megawatts (capacity), but the actual contract ties rent payments to megawatt-hours (energy production). Voters weren't told that turbines seldom produce even 20 percent of their name-plate capacity. That's why the town hasn't realized the $200,000-$500,000 in yearly revenue Osuch projected — and never will. Town revenue will steadily decrease because it is tied to natural gas prices, which will continue to fall for several years to come.
Somebody was asleep at the switch.
Section 9g of the contract also required that the turbines "would not exceed 60 dBA at the nearest property line;" but, incredibly, no penalty is defined for violations — financial or otherwise. For comparison, Hanover required Fairhaven Wind developer Sumul Shah to pay $1,000 per day just for project delays in that town.
Osuch told Town Meeting there was funding to restore the land when the lease expired. Though true, he neglected to mention that the amount was $500 — not enough to seed new grass. Money is added to this fund based on — you guessed it — energy production. Section 11 adds 3 pennies per 10,000 KWh. This may add up to enough in 50 years or so.
Did Crotty warn the Board of Selectmen about these glaring legal omissions? Due to attorney/client privilege, he can't say; but Manzone, Sylvia or Bowcock could. If they flagrantly ignored his legal advice, maybe one of them will come forward, admit their mistake, and rescue Crotty's reputation — but don't count on it. These things happen when you don't have open, honest government.
Towns commonly require private companies to post a bond that would offset financial damages if the company defaults or goes bankrupt, but no such bond exists in this contract. If Fairhaven Wind goes belly-up, the cost of dismantling two turbines falls on taxpayers. Falmouth estimated $838,000 to dismantle its two turbines.
This story gets worse. Towns that put contracts out to bid are accorded a right known as "termination for convenience," but the 2011 amendment includes this: "The town hereby expressly waives any rights it may have to cancel this Lease or discharge any of its obligations hereunder." The arbitrary right of termination would have been a powerful negotiation tool for avoiding costly legal battles, but Bowcock's Board apparently waived this right for no good reason.
Still worse, Section 9.2 reads (With capitalization as it appears in the contract):
"NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITVE DAMAGES ... IRRESPECTIVE OF WHETHER CLAIMS OR ACTIONS FOR SUCH DAMAGES ARE BASED UPON CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR ANY OTHER THEORY AT LAW OR EQUITY."
This may sound fair, but Fairhaven Wind was already protected by its Limited Liability Company status. So, the town is the big loser once again.
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