“Our goal is July 31,” said OnForce CEO Charles Feit when asked about a completion date at a special March 29 Town Board meeting. He hopes his company can secure permits soon and begin work in April.
The town contracted with Bronx-based OnForce last May to build a 600-kilowatt solar array on the grounds of the wastewater treatment plant. Through a power purchase agreement, or PPA, OnForce would build the array and sell electricity back to the town at a rate lower than that currently offered by Central Hudson.
The town assumes no responsibility for the construction or maintenance of the array, which will be installed and connected to the Central Hudson power grid. The town will still be connected to the grid, but its electricity bills will be offset by credits for the amount of electricity generated by the array.
Town officials had expressed frustration that the project seemed to have stalled. OnForce explained at the meeting it was attempting to secure financing, a necessary step the town board was aware of when it inked the deal.
Dublin, Ohio-based IGS Solar will own and finance the project while OnForce will construct it. Acting as a sort of liaison between OnForce and IGS is Sol Systems, based in Washington, D.C. Sol Systems brought IGS Solar to the table because it is interested in continuing to build a portfolio of solar assets, Feit said. Sol Systems’ initial role will be that of project manager, according to Project Finance Associate Taylor Leyden.
Asked by Councilwoman Laura Ricci why IGS needs a separate project manager, Feit explained that IGS doesn’t have the personnel to oversee every project in-house.
Ricci asked if this reshuffling of responsible parties was like one’s mortgage being sold to another bank. Nathan Jovanelly, Mid-Atlantic region manager for IGS agreed.
The town will have a choice between keeping the contract officially with OnForce — which will delegate to IGS — or to update it to be an agreement with IGS. The town will pay IGS or OnForce for the electricity generated by the array at the lower than Central Hudson rate. Some of the parties may be different, but “there are no financial ramifications whatsoever,” Feit said. In fact, the rate has gone down slightly, from 9.3 cents per kilowatt-hour to 9.15 cents with a yearly two percent increase allowed over the span of the 20-year agreement. At the time of the original agreement, Central Hudson’s rate was 10.16 cents. The utility’s rates have risen an average of 4 percent yearly.
Ricci asked what legal protections the town has now that a new company, IGS Solar, will own and maintain the array, to which Feit replied, “They’re about to give me a check for a million dollars, so they have a vested interest,” Feit said.
Jovanelly added that IGS is a family-owned investor with more than 800 employees, $1.5 billion in revenue and carries no debt. The family makes decisions.
IGS Solar is part of IGS Energy, which was founded in 1989 as Interstate Gas Supply. It has amassed more than 1 million commercial and residential customers in Ohio, Michigan, New York, Kentucky, Pennsylvania, Illinois, Indiana, Virginia, Maryland, California and Texas, according to its website. IGS was recently approved to be an electric supplier.
Supervisor Jeremy Wilber pointed out the array could change ownership dozens of times, but the new owner will still have to honor the terms of the PPA.
Councilman Jay Wenk expressed disappointment at the “long period of time when we had no communication about these changes.”
Feit noted he was in contact with Wilber and Councilman Bill McKenna and the basic terms of the PPA haven’t really changed. The deal is more about being environmentally than fiscally responsible, since any savings in the town’s $131,000 yearly electric bills would be “miniscule” compared to the entire budget.
OnForce estimates the array will produce 718,000 kilowatt hours per year. In 2014, the town used 729,823 kilowatt hours.
Wilber said he hopes to schedule another special meeting for April 5 when the Town Board will vote to authorize him to sign the updated deal with OnForce and IGS Solar.