The Town has been approached by Santa Energy, a developer from Bridgeport CT who wants to build solar arrays on two town-owned parcels, which they would lease for twenty years. The parcels are on Pinch Street, behind the DPW garage and on Brook Road, just south of the grade school and directly opposite the entrance to the firehouse parking lot. The Pinch Street parcel is approximately 19 acres and runs behind four homes on Pinch Street. The Brook Road parcel is about eight acres.
Santa Energy is proposing to generate 2 megawatts (MW) of electricity on the Pinch St. parcel and .75 MW on Brook Rd. The company would be responsible for construction and cleanup, for maintenance of the property and equipment, and at the end of the lease, for removing the solar panels and restoring the property. The construction would not require concrete or other impervious materials; the arrays will be supported by posts driven directly into the ground. Connection to the grid will be by a combination of buried and overhead wires. The ground around the array will be planted with pollinator-friendly grasses & wildflowers. Vegetative screening, such as arborvitae or other fast-growing trees, will be planted to preserve the viewscape from the road on Brook Rd and from the homes on Pinch St.
Santa Energy will utilize the Non-Residential Energy Solutions Program for this project. The program requires the state’s two largest electric utilities, Eversource and United Illuminating, to purchase electricity from developers like Santa. The amount of power the utilities must purchase is set by the state; each year, Eversource is required to add 18 MW of solar production from projects like the one Santa Energy is proposing.
The price is set by competitive bid. Twice each year, Santa and other companies submit bids specifying how much they will charge for the electricity. The rate remains in place for twenty years.
To submit a bid, Santa Energy must show that they have arranged for a site to build their solar array. In our case, that means they must have a lease in place with the Town for the parcels. But Santa Energy can’t tell us how much they will pay for the lease until they know how much Eversource will be paying them for the power they will generate. In other words, they can’t bid until they have a lease and they can’t have a lease until they make a bid.
To avoid this Catch-22, Santa Energy is proposing to enter into an option to lease the property. If we give them this option, and they win the bid, the lease will go into effect. But we won’t know how much we will get paid until the bids are awarded.
Instead of providing a single, fixed amount , Santa Energy is proposing a range of possible lease rates. The lowest amount they will pay is $15,000/MW per year. That works out to $30,000/yr on Pinch St. and $11,250 on Brook Road, or a total of $41,250. The maximum amount in the option is $25,000/MW. This maximum is based on the ceiling on how much developers can charge that was set by the legislation that created the NRES program, That rate works out to $50,000 on Pinch Street and $18,750 on Brook Road.
The payments will increase by 1% per year for the 25 year life of the lease. By the 20th year of the lease, the minimum payment would reach $14,285 for Brook Road and $38,092 on Pinch Street or a total of $52,377. The maximum payment would reach $23,808 on Brook Road and $63,487 on Pinch Street.
The question before the Town Meeting is whether or not to authorize the First Selectman to negotiate and sign an option to lease the parcels to Santa Energy for the program described above. Among the conditions to be negotiated are: vegetative screening, third-party indemnification, access to the sites, and the responsibilities of the developer.
If the Town Meeting approves the negotiation, if the conditions are met and the option is signed, and if it will yield at least $15,000/MW, the lease goes into effect for twenty-five years at a rate determined by the actual amount awarded in the bid.
If the conditions are not met, the option will not be signed, and if the minimum is not reached, then the option will not be exercised. We will vote on the two parcels separately, so it is possible to approve neither or both or just one of the parcels for this program.