DERBY LINE - Opponents of the Derby Line Wind Project are hailing a decision by the Public Service Board (PSB) Friday to deny Encore Redevelopment a "milestone extension." If the extension had been granted, it would have allowed the company to have more time to meet the requirements necessary for SPEED money, giving Encore a pipeline to renewable energy credits and a guaranteed return.
The board ruled recently that Encore could refile for a Certificate of Public Good for one of the two wind turbines proposed for Derby Line. Encore had decided not to proceed with the turbine on Smugglers' Hill after Canadian opponents demanded intervenor status with the PSB and engaged in hearings and protests against the project. Encore was seeking a milestone extension for the turbine to be built at the Grandview Farm of Brian and Sue Davis in Derby Line.
Encore only has until January 15, 2013, to meet the deadline for eligibility for SPEED allotments, not enough time to go through a second round of applications and hearings for the Certificate of Public Good. The company needed the extension to make the project work.
Encore told the PSB in it's application for extension: "If it is not extended, Encore will have to withdraw the project from the queue because the agreement is key to the project's economic viability."
By "queue," Encore is referring to the line up of potential developers waiting for acceptance into the SPEED program.
SPEED stands for Vermontâ€™s Sustainably Priced Energy Development Program. Under SPEED, the state encourages renewable energy projects by entering into contracts with developers to provide a 20-year, above market, guaranteed price per kilowatt hour as well as renewable energy credits. Under the current SPEED program for wind generation, a developer is guaranteed 12.5 cents per KWH and can get renewable energy credits up to 3.5 cents per KWH.
Estimates are Encore might have netted as much as $30 million over the life of the project. As part of the two-turbine project, the developer had offered to offset local municipal costs to the Town of Derby of about $73,000 per year, and $15,000 per year to the Town of Holland, under a PILOT (paid in lieu of taxes) agreement.
SPEED contracts have a three-year to completion shelf life. The contract between the state and Encore Redevelopment is due to expire Jan. 15, 2013. Encore applied for an extension of 25 months, into 2015, arguing that the company had faced numerous delays in getting the project off the ground. Encore claims, in its application, that the delays were due to the actions of other parties, delays by the PSB, and even bad weather.
Opponents argued, and the PSB apparently agreed, that Encore was responsible for most of the delays in project development. In a letter to the PSB, intervenor Mary Jenne of Derby Line wrote that Encore made mistakes, errors and omissions, and that Vermont Citizens "are not in the business of educating wind developers." She stated that allowing wind developers to get a fresh lease on a contract with the state by selling their Certificates of Public Good without actually building the project amounted to making "millionaires out of speculators" and would amount to manipulating the process.
The concern of some intervenors, including Jenne, was that Encore Redevelopment may not have had proper financial capacity or site control to follow through on the project and would probably sell the Certificates of Public Good. Encore Redevelopment is a real estate developer, not a utility. As an example, Encore had indicated that the local farmers who hosted the turbines would act as caretakers of the project, while experts asserted that the turbines required maintenance by professionals trained specifically in working on Big Wind equipment.
The PSB, in its decision, stated that if a developer sells his contractual rights to another developer, who would then argue that the timeline should begin anew because he/she/it is an innocent owner, "(T)he contract would be essentially meaningless and would open the door to gaming the milestones."
On that note, the PSB denied the extension, making it impossible for Encore to meet the January 2013 deadline. And although Encore could begin another project, by then, the terms of the SPEED program could, and very possibly would, be radically altered. However, Encore can use the SPEED contract allotments to building solar projects in the time retaining, if they want to help fulfill the renewable energy needs of Vermont.
See Public Service Board website < http://psb.vermont.gov/docketsandprojects/orders/recent > Docket 7832.