Wind Energy Feasibility Study - Town Of Orleans

Wind Energy Facility Economic AnalysisTown of Orleans, MA5.4 Case StudyThe Town of Falmouth is a relevant case study for development of a municipally-owned windturbine project in Massachusetts. The Town of Falmouth began exploring a wind turbine projectin 2002. One year of on site wind monitoring was completed in 2004 and a feasibility study wascompleted in 2005. The Board of Selectmen approved a Town-owned 1.5 MW turbine in 2007and Town vote approved $4 million for the project in November 2007. Special legislation (StateLaw Chapter 200, H.B. 3769) enabling the Town to become a distributed generator of power, toown and operate a wind turbine facility, issue bonds to obtain financing, create an enterprisefund and other related provisions was passed in November 2007. It should be noted that similarenabling legislation was created for all municipalities under the Green Communities Act.An engineering design and invitation to bid package completed in May 2008. Six bids werereceived for the project in July 2008, where the low bid was in excess of the $4 million dollarsoriginally approved by the Town. Subsequent to another Town vote, a contract was awarded inDecember 2008 for $4.3M and construction of the project is currently underway. As part of theTown approval to appropriate additional funds, an updated independent economic analysis wascompleted. The analysis, completed by Sustainable Energy Advantage, LLC of Framingham,MA, included a statement of project cost, estimates of operation and maintenance costs andanticipated annual cash flows needed to support the project, including the sale of excess powerREC credits.The Falmouth model assumptions included financing through a contract for advanced RECpayments in excess of $1,000,000 and a revenue bond amount of $4,000,000 at a rate of 4.5%over a 16 year term. Annual energy production estimates were estimated to range from 3,080 to3,624 MWh per year and total net cash flow from $2,056,000 to $4,023,000 over 20 years. TheFalmouth model predicted a worst case positive cash flow after the first year of $465,000. Asummary of the Falmouth municipal ownership model case study is included in Appendix D.25