Catching Up on Solar Panels

I'd just like to pat the backs of the school committee for insisting on seeing the details to the solar deal. I can't find the link to the Daily News article, but here's the editorial on the matter.

For the life of me I can't understand why this contract is being treated as such a state secret. Perhaps the mayor is concerned that sharing the details will open up a can of questions, concerns and considerations.

If so, good.

Solar Answer

Well, we got out answer. The city will indeed save some serious dough on energy in the new solar deal, according to Lynne Hendricks' article in the Daily News

Truth be told, the Daily News was kind with the headline. It could have easily read, "No Bid Solar Deal Would have Cost the City Thousands."

You may recall the mayor rushed through a controversial, no-bid process to secure a deal with a vendor EyeOn. The agreement fell through when EyeOn lost its investors.

At the time, the mayor said we shouldn't expect any real savings from the EyeOn deal. Now, it sounds like we'll save hundreds of thousands over the life of this new contract.

Bottom line, the new deal is better than the old deal. And, by my reading, the city still will receive the precious rebate that drove the mayor to bypass the no-bid deal at the start.

Looks like things worked out of the best.

The school committee still needs to vote on the arrangement at its Feb. 23 meeting.

Are there solar savings?

Mayor Moak touched upon the solar panel project in his address to the council last night. 

I was happy to hear the solar panel project is moving forward. Last I read in The Daily News, the mayor still hadn't selected a vendor. But he was supposed to do one a few weeks ago, so perhaps he hasn't announced it yet.

But one line of his speech caught my ear.

"We will continue to work on green initatives. The solar panel project at  the middle school and the DPW has been retooled and is in final stages of the contracts. There will be 500 kilowatts of solar panel being produced on our roofs this summer, which will lower the costs of powering the middle school and the DPW building."

This runs counter to my understanding of the project. I thought the city basically was looking to break even on the deal, paying out to the solar panel company roughly the same amount we're paying to National Grid. In fact, I found this excerpt from a Daily News article published in September. 

Since the city pays about 15 cents per kilowatt now, Moak said the $3.6 million solar panel system that would be installed atop the Nock wouldn't generate cost savings as much as take pressure off the grid.

"(The cost) is very similar to what we're paying now," said Moak. "We don't expect to save a lot of money. What we expect to do is provide alternative energy — that's a huge factor that we're looking for. Some people pay more than they have to. We're not doing that."

So which is it? Are we saving money? I certainly hope so, and kudos to the mayor if that's the case. But if we are, what changed? Did the collapse of Eyeon--and the competitive bidding that followed--actually help the city?

The Answer (?)

City Councilor James Shanley got in touch with the mayor and secured an answer to our question posted here: To paraphrase, just how is the city going to stash $400,000 away to offset any differences between market rates for electricity and what the city would be paying through any solar deal?

Apparently, the mayor will put the money--which will be left over from a $1.6 bmillion rebate coming from the state--into an Alternative Energy Stabilization Account, which is the proper vehicle to carry money from year-to-year. Any expenditures from the account would have to be approved by the City Council, so the any dipping into the fund would get a full public airing.

If untouched, the money also would be available to purchase the solar panels in the future if we sought to do so.

As Shanley notes, this gives the council a degree of oversight in the deal, some thing which seemed to be missing in the first go around (as an anonymous poster offered in the linked post.) Shanley, in a comment on that same post, correctly points out that the council really has no jurisdiction over the mayor's negotiation of the solar deal so it was in no position to oversee anything.

He's right, of course. But as a voter I'd enjoy seeing the council butt into the mayor's office a little more often. Councilors generally have kept quiet about a few of the larger controversies this year including the Clamshack and the Solar Deal. Of course, when a councilor does step in--like Larry McCavitt--they're piled upon on by anonymous commenters telling them to mind their own business.

No one said councilors had an easy job.

But as Shanley hints at in his comment, the answer might lie in a change in the city's charter.

I've always been a proponent of having an elected mayor run the city. But the invisible wall between the City Council and Mayor's office has me wondering if the city would fare better under a city manager system. At least that way the council--who I think answer more directly to voters because they're more likely to get voted out of office--would have a much larger stake in the performance of the person managing the city's affairs. Seems to me that would focus more eyeballs on the operations of the city.

I'm still undecided, but I'm clearly off on a tangent. More on the Charter Review later.

Thanks to Councillor Shanley and the Mayor Moak for providing an answer.

Top Stories-Vol. 2

Continued and in order of appearance in the poll.

BATTLE AT CROW'S LANE: Well, this story has everything. Victims. Villains. Reports of sick residents, including children. Promises of state investigations. A very public meeting with Deval Patrick. It goes on and on and on, and potentially will do the same through 2009. This is a problem with no clear fix, but I think Mayor Moak and the council have held up pretty well in this fight against New Ventures. It's anybody's guess as to how this thing will turn out, but the issue is scheduled to have its date in court come this spring.

THE SOLAR PANEL DEAL:

Charlie Brown, you're the only person I know who can take a wonderful season like Christmas and turn it into a problem.
-Linus Van Pelt

This quote from the Charlie Brown Christmas special sums up my feelings about the mayor's push to get solar panels atop the Nock Middle School. How can a seemingly wonderful thing like Solar Panel get twisted into a problem? Well, it appears to be one-part rushing into a deal with vendor the city knew little about with a dash of having a guy who might benefit from the deal serve as the city's advisor. Just not a good combination for the sake of appearances and, clearly, performance.

The city finally moved on from the vendor, EyeOn, after the company lost its backers. According to the most recent report from the Daily News, the city was supposed to have received new bids yesterday from several interested--and economically viable--vendors. Here's hoping the terms are a little more favorable given the current climate.

The mayor's haste is due mostly to his desire to score $1.6 million in rebates from the state. It's hard to argue with the pursuit of free (i know, it's not really free) money, but the rush didn't serve us too well the first time.

BTW, we got an answer to the question we posed in our earlier post. See "The Answer."

SENIOR CENTER FINDS A HOME: Not much else to say.

An Increase in Solar Interest

Ah, I love the smell of free market competition in the morning. It will be interesting to see what kind of deal the city lands from a new solar panel/energy provider, nine of whom are interested in doing business with the city, according to the Daily News.

Given the current economic climate, I could see the terms only getting better as I'm sure there are fewer entities out there--corporate or government--willing to fork over serious dough for a larger capital project. But perhaps I'm misjudging the market.

If I were the mayor, however, I'd be reluctant to sign any deal that didn't at least match what Eyeon, the former provider who apparently lost its investor, was offering. Unless the Eyeon deal was just too good to be true, but other firms contacted by the Daily News at the time of the exclusive Eyeon talks seemed to indicate they might match or exceed the terms.

I do have one question. From the Daily News Article:

Most important for prospective bidders, Moak and Wootan told the group the city wants to keep the $400,000 in MTC rebates it negotiated into its contract with EyeOn. That would allow the city to offset unforeseen expenses and to compensate for potential energy price dips that might make Newburyport regret locking in at higher energy costs down the road.

How exactly does this work? Does the city keep $400,000 in an account that it will dip into whenever energy prices climb? I didn't think municipal entities could carry accounts over year- to-year.

If we can't, than is this going to be a $400,000 budget line item added into future budgets? If that is the case I can easily envision a scenario where that money is treated as a sudden windfall by this or a future mayor and diverted to cover more immediate budget costs. Then we'd be stuck with the higher energy prices with no means of covering our increased cost.

Any thoughts out there?

Solar Deal in Trouble?

Coincidentally, a friend of the Posts attended a business breakfast type meeting yesterday where an alternative energy type gave the keynote.

He told the crowd of bankers, private equity folks and the like that the ongoing credit crisis was killing solar panel and other green energy projects. So the news about our own city project wasn't surprising.

But the problems surrounding EyeOn sound a little more extensive. From the Daily News article:

Beyond the financing hurdles, EyeOn, an upstart company from out of state with few clients to its credit, could be facing other problems, as well.

Boulder County records show the building owned by EyeOn owner and President Alex Kramarchuk — the company's official address, according to the Colorado Secretary of State's Web site — is slated for foreclosure due to mortgage default. It's the fifth time Kramarchuk's residential property has been threatened with foreclosure for nonpayment since 1996. Kramarchuk did not return a call for comment yesterday.

We'll see how this plays out, but this certainly doesn't instill one with a great deal of faith going forward. Isn't the city supposed to be part of a long-term partnership with this company? If I recall correctly, they're not just installing the solar panels. They're also going to be selling us energy for the foreseeable future and maintaining the panels if I remember correctly.

From an earlier article:

In exchange, the city will agree to purchase back energy created from the panels from EyeOn at a cost of 14 cents per kilowatt, escalating 4 percent per year for the next 20 years, until it can purchase the system back and reap the 34 percent cost savings themselves.

But the article leaves me with a few questions:

1. Was the commercial bank--probably Morgan Stanley, according to the mayor--going to invest in the project or was it merely providing financing. Big difference. If it was the former I'd say the deal could be in big trouble. If it's the latter there may be a sniff of hope, but not much.

2. Have we given any money to EyeOn? If so can we get it back?

3. Who filed the complaint with the ethics commission? Check the last graph.

Solar Express

I know I'm late on this, but I did want to chime in on the solar deal.

I'm glad the Daily News has taken a long, hard look at the solar panel fight. I won't repeat the entire story. Just read the editorial, articles and items from the mayor that run along the side.

Bottomline, Jeff Wootan, the city's representative, as well intentioned as he might be, stands or stood to benefit from the contract he helped negotiate on the city's behalf.

According to the News, he led the city's negotiations with with one company, EyeOn, while also entertaining--or at least discussing--a job with an EyeOn subcontractor, Integrated Energies, that will install the solar panels. Incidentally, Wootan had a hand in launching Integrated Energies earlier this summer.

If this is the case, and no one has disputed it, it's clearly a conflict. I'm not saying it was his motivation, and I can't say a huge windfall--if any windfall--will come his way as a result. Doesn't matter. This is still a conflict that should have been disclosed.

I know the Mayor and other officials say don't see a conflict, but frankly their opinion doesn't matter. To me, the state law is pretty clear.

"Unless you make a proper, public disclosure — including all the relevant facts — you may not take any action that could create an appearance of impropriety, or could cause an impartial observer to believe your official actions are tainted with bias or favoritism."

The missing disclosure, which reportedly was filed after the Daily News started asking questions, takes on even more importance since this deal has been rushed through without the standard competitive bid process.

What's worse is that this connection would have gone unreported if not for the Daily News hadn't been poking around.

Any outrage about this is clearly muted by the fact that we're talking solar power (who doesn't love that) and that the city is spending grant money rather than it's own (at least that's what I've been told.)

I wonder what the reaction would be if a representative of the school department negotiated a city contract with vendor while discussing employment with the same company.

We can argue as to whether this was a wise business practice. Critics--mostly anonymous commenters on the Daily News site--worry that the city didn't get the best deal. The Mayor insists he had to rush to take advantage of state programs and grants to pay for the project. We'll give him the benefit of the doubt.

But I don't think there's much doubt that politically this is a mistake. Folks on the fence will be looking for any reason to reject next month's debt exclusion. I'm sure, for some, this became one.