LINCOLNVILLE — Lincolnville voters on Oct. 11 will be asked to decide if they want the town to enter into an agreement with ReVision Energy to install a solar energy power facility, via a license on town land next to the center fire station.

If approved, ReVision would be granted a license and agreement to install a 43.4-kilowatt solar electric array on approximately one-quarter-acre of town land adjacent to the fire station, with a maximum 30-year lease. The town would purchase electricity from ReVision at an agreed-upon price for six years, and the town would have the option to purchase and operate the equipment in year seven. The electricity would cover about 90 percent of the town’s needs for its public buildings, including the fire station, the town office, the sand/salt storage building and the Breezemere Park bandstand, as well as the town buildings along Route 1 at the beach, including the fire station there, as well as lighting at the beach, the harbor and the town pier.

For anyone not familiar with the project, the Lincolnville Ad Hoc Energy Committee is holding a community informational open house on Saturday, Oct. 8, from 2 to 4 p.m. at Lincolnville Central School, 523 Hope Road. The open house will include activities, displays and refreshments throughout the afternoon, and a Q&A session at 3 p.m.

The solar energy power facility question is moving to voters following a long discussion at the Sept. 12 Board of Selectman's meeting, after which Energy Committee members were asked to do more work to better prepare the selectmen, and voters, ahead of a special town meeting vote this fall.

Working on the project since the spring, and learning that the town could save a substantial amount of money on electricity expenses without capital investment, the Energy Committee said on Sept. 12 they hoped the selectmen would act quickly so the project could start before the ground freezes going into winter. But the selectmen wanted to make sure they had all the bases covered, and knew fully what the town would be committing to, before putting it to voters. So they asked the Energy Commitee to do more work, and come back to the Board 's Sept. 26 meeting to see if the project could be ready for voters.

Normally, the work the Energy Committee needed to do would have been accomplished in large part by Town Administrator David Kinney, who was also a knowledgeable advocate of the plan and had been working with the committee until he unexpectedly suffered an aneurysm Aug. 23 and went out on medical leave. Kinney's absence, and unknown date of return, meant the project, if it got started this year, also did not have a manager to oversee it.

Following the Sept. 12 meeting, Board Chairman Ladleah Dunn, who is also the Energy Committee Liaison, and other Committee members devoted serious time to get the project to the next step as requested.

And that meant having the Power Purchase Agreement and other legal documents reviewed by a legal resource familiar with similar municipal plans.

Appearing at the Sept. 26 meeting were members of the Energy Committee, represented by Cindy Dunham, and attorney Bill Kelly, of Belfast, who was hired by the town to review the legal paperwork, called a Power Purchase Agreement.

Kelly addressed the selectmen, and told them he had looked at four similar municipal solar power agreements in the, including in Camden and Belfast.

Kelly said that the two main areas he worked on, in regards to reviewing the agreement, were not obvious in the document. One of those was to make sure there was a set price in year seven.

"Should the town wish to purchase the facility, you would know what the price is. You might think that with looking at the document and the schedule that was attached, in Exhibit 4, that those were the purchase price numbers. Not really. It's not a trick, it's just the way that the document reads. Those numbers have a bearing on a variety of issues, but what the IRS requires, with the various number of complicated tax credits involved, is that the purchase price be a fair market value in year seven should you wish to do that," said Kelly.

But, Kelly said, while ReVision is "happy to have some sort of set price" for the town to purchase the equipment in year seven, it cannot set the price right now for the benefits that it wishes to, as part of the deal.

To work around the issue with ReVision and what the IRS requires, Kelly said a gift letter has been drafted. The gist of the letter will be to allow the town to know what their price is to purchase in the future.
"So this letter basically says, if the town elects to purchase in year seven, it's a fixed price. It's $56,786 just like Exhibit 4 says. And if they have to pay more than that, ReVision will give that back to the town. So, fair market value has to be paid, it might be more than this, but you know that this is going to be your number after it's gifted back to you," said Kelly. "Everything you give over $56,786 you will get back. If you wait until year eight, that's not the deal anymore, it's whatever the fair market is [that year.]"

Kelly also said, "Quite frankly, ReVision wants you to buy it in year seven, so they are working with you through this arrangement to do that."

Kelly said it took a while to work through this detail on a prior project, but "not so much with this one." He said that ReVision was and is really easy to work with, and are very cooperative.

"They know what they are doing, the guy I work with at ReVision is just a peach of a guy, there is no hiding the apples, we worked everything easily and that's the good news. It's a good atmosphere," said Kelly.

The second issue of importance to the contract was taxation for the value of the facility. Of concern in the document, is that the town is responsible for paying the property tax for the facility.

That, he said, could be a lot of money over the life of the facility.

Kelly said there was discussion over whether ReVision has been able to take and file as the owner of the solar array, for the first seven years at least, whether this qualifies in the state of Maine for a program called the Business Equipment Tax Exemption. The BETE program is a 100 percent property tax exemption for eligible property.

"The long and short of it is we would like them to do that, meaning the town of Lincolnville, because you want them to be responsible for the taxes and you're perfectly happy if they can get an exemption in the state law," said Kelly.

Kelly said that one of his goals, which he has done with other towns, is to minimize the likelihood that the town is going to have to pay any personal property tax on such a facility.

"The contract says they [ReVision] have to [pay personal property tax], because they are stuck with the situation that they have to own it during the first seven years. So what we did is the same language in Belfast, we used language in the statute that if the town has some kind of interest in the array now, even if they don't own it yet, then it gives us the one window of opportunity under the statute to not tax yourself, or because under this contract ReVision is not paying personal property tax," said Kelly.

He said the language in there says that ReVision is pledging an interest in the array to the town, and by doing that, the town is satisfying a statutory exception such that there will be no personal property tax the town has to pay for this.

"Those are the two things of substance I brought to the table and they were most important. Beside this, I reviewed the document to make sure it was reasonable and what you would expect to see, and I think it is," said Kelly.

Kelly also said that since ReVision is no longer seeking an easement with the town to put the array on town property, and instead the town is giving them a license, it's a more simple document.

"It won't be registered in the Registry of Deeds, and a license is a lesser quality, so to speak, set of rights," said Kelly. "This is a better situation for the town."

Kelly said he also did not see the location of the facility, next to the fire department, and the license being granted as impediments to changing town needs down the road. He said that if the decides in three or five years to move the solar array, there is flexiblity.

"You have to pay to move it, but you have to right to do that if say the fire department land becomes more important for another use," said Kelly.

Kelly also said, "Some people get nervous that it's a 20-year document, but there is flexibility, and options to extend in five-year increments if desired, increasing flexibility further."
He also recommended that the Board of Selectmen not give another entity license to use town land without a town vote. He said that while the Board was executing a document, which gives assurance to ReVision that it wants to move forward and so ReVision can begin ordering equipment, it's also important to have a public vote to put the final OK on it.

He said that the document being executed that night very clearly states that there is no contract until the town meeting vote.

"Then it's a done deal. And ReVision knows this is often [how and] when we come down to these things, at the end of September," said Kelly. "So people out there watching, don't sweat that you won't have an opportunity to vote."

He said that usually, the Board of Selectmen has the ability to sign up for electricity contracts without a town vote, but where this involves a license and it's on town property, it's different and kicks it over to a town vote.

Speaking as chairman of the committee, Dunham said that the committee left the Sept. 12 meeting and got busy filling in the holes identified then by the Board of Selectmen. In addition to Dunham, the Energy Committee is comprised of Gary Gulezian, John Williams, Greta Gulezian, Jim Dunham, Bob Olson, Kathy Williams and Rich Smith.

Dunham said they first contacted 12 other towns and surveyed them on a number of areas, creating a matrix of their responses.

Those towns were asked, among other things, their experiences with ReVision Energy, steps taken to bring solar projects to a signed agreement, their approach to the buyout option, legal review of the Power Purchase Agreement, their lease arrangement and perceived risk from changing state police on net metering, among other things.

"We found the survey helpful and gave us insights into the entire process," said Dunham. "It helped to identify Bill [Kelly] as well as wording for the Town Warrant Article. It also helped us understand why a few projects did not work out on their first go-around."

She said that Committee member John Williams ran more budget and cost scenarios, and ultimately confirmed that the town was better off buying its electricity through ReVision via the solar array in town and then buying the equipment in year seven.

"After the buyout in year seven, it could save the town between $150,000 and $300,000," said Dunham.

She said that they talked with representatives from both the Budget Committee and the town's Financial Advisory Team, and nobody expressed serious concerns about the project or the proposed budget options. She said the Committee felt it might be worthwhile to get an outside financial review, "just to check on things," but that they hope that that process would not hold up the project.

"Future budget and energy projections are always subject to risk however with the option of continuing to purchase our own power for up to 30 years, we are also creating some budget stability," said Dunham.

She also said that last spring, when talking to Kinney about that subject and/or the challenge of the state's lack of solar policy, he responded that everything has risks and the future of the electricity market overall has great uncertainty. She said Kinney strongly encouraged them to pursue the project regardless of the state's policy climate.

Dunham said that while the Committee has not identified any one project manager to serve in Kinney's place, Committee members Andy Oliver and Jim Dunham are willing to act as co-managers. She said they were prepared to be on-site as needed during installation, and to serve as the contact to communicate with ReVision.

Listed among the other town supporters of the project are the Lincolnville Fire Department Inc. and the Conservation Commission, both of which have been kept apprised of developments and included in discussions, Dunham said.

"This municipal solar energy concept, including the PPA, is not easy to articulate or is something with which people are familiar. If you approve the go-ahead, we will do our best to get the word out and help educate the community members about the proposal," said Dunham. "We know many residents of Lincolnville are excited about the idea of local, renewable energy, and without a big upfront cost or tax increase, it is a really appealing project. We continue to strongly believe that using renewable local energy is a great opportunity for Lincolnville, not only financially but also for the benefit of future generations."

With no further comment from the public in attendance at the Sept. 26 meeting, and very little discussion from the board other than to voice support and appreciation for the extra time given to the selectmen to review earlier information they had been given, and for new information they had collected and disseminated to date, a motion was made to authorize the chairman to sign the PPA with ReVision, subject to ratification and approval of voters in a Special Town Meeting Oct. 11.

Related links:

• Lincolnville's solar electricity project moving forward, but for the devilish details

• Rest and heal, Mr. Kinney, Lincolnville's got you covered till you get home