Solar deal hailed as `win-win'

Johnston’s energy future recently became brighter and cleaner thanks to an arrangement that will give the town solar energy credits to reduce its electricity bill.

The Town Council on Sept. 26 authorized Mayor Joseph Polisena to enter into a payment-in-lieu-of-taxes, or PILOT, agreement and a municipal net metering finance agreement with Southern Sky Renewable Energy RI LLC to provide the town with credits for utilizing solar energy.

Southern Sky plans to construct a solar facility on A Street off of Plainfield and Shun Pikes with a generating capacity of approximately 3.39 megawatts. The town will then consume 2.18 megawatts of that output.

The expected completion of the solar field is targeted for June 30, 2017. According to the project’s letter of understanding with the town, the finance agreement will generate renewable net metering credits.

“This is a very similar thing that we’ve done in Warwick. It’s almost a carbon copy, though it’s slightly different. Warwick’s getting a little less of a discount because of the location site,” said attorney K. Joseph Shekarchi, who represented Southern Sky during negotiations. “Johnston has the most advantageous site in the state there, and where we’re proposing the solar farm is very close to a National Grid connection. The ones in Warwick are farther away, and therefore more expensive to transfer power from the site to the connection. We can’t connect to a line, we have to connect to a substation. The concept is great.”

According to Shekarchi, Southern Sky builds solar fields and sells electricity to National Grid, then receives a credit from that company. That credit is then used like a check when the municipality pays its electricity bill.

The company is currently working on similar agreements with Lincoln, North Providence, and Warwick. Participating cities and towns then receive a 13- to 20-percent discount on their electricity bill going forward, with Johnston receiving a 20-percent discount. The agreement is slated to last for 25 years.

In his presentation of the resolution to the council, Town Solicitor William Conley stated that the town will purchase all of the solar energy produced by Southern Sky for use in town buildings. In addition, after all the town buildings use the energy, it is possible that there may be a surplus left over. Under the statute, that energy may be sold for an appropriate use, and it could conceivably be used by the housing authority.

Conley also added that the developer will make annual payments to the town in lieu of real and personal property taxes on the project. He said the arrangement sets a rate of $5,000 per megawatt, and that the annual payment base would be $13,350 for 2.7 megawatts. At the current preliminary sizing, it’s estimated that the payment would total $16,950 per year.

“We’ve got all kinds of green energy here, if you will, we’ve got the gas companies that burn natural gas for energy, we’ve got the biodigester going up in the area, and we never had a solar farm, so this company came in and they sat down with us and met with the council members,” Polisena said. “What they’re going to do is sell energy to us at a 20-percent discount and it’ll be some substantial savings.”

Shekarchi also said the arrangement between his client and the town was mutually beneficial.

“The land that we use has very limited or zero development possibilities. We use radioactive land, environmentally challenged land, non-buildable land, land that’s a landfill,” he said. “If it’s a [Department of Environmental Management] site, we cover it and we put our equipment on top of it. So we’re not taking away land that can be used for a business or otherwise, we’re taking land with limited value.”

Polisena agreed, adding that the proposed development is the second site remediated by a private company in town during the last year, the other being located at the site of the planned Citizen Bank corporate campus.

“That land was basically a brownfield site, so they’re going to clean that land up. Obviously, with the deal we’re getting, we’re getting more now than we were getting from the taxes on the land, so it’s really a home run for the town and we’ll continue to look at other solar interests that want to come into the Johnston and we’ll go from there,” he said.

Shekarchi also stated that the properties used by Southern Sky are self supporting, requiring no city maintenance, and do not burden town services such as police, fire, or the school district. The facility will also generate very little noise, and only when in use during the day.

Southern Sky has also agreed to voluntarily to make a payment in lieu of taxes, adding additional revenue.

“They’ve also offered, every year, a $5,000 stipend, so I’ve decided to turn that into five different scholarships for the town’s children that are in the sciences, such as criminal justice or nursing, for example,” Polisena said. Schoolteachers will help to select students for those awards.

Councilman Anthony Verado added: “We met with them individually, and research has proven that they’re a great company in some of the towns they’ve been in. Also, other solar companies in the towns that they’re in have nothing but good praise for the company, so in my opinion it’s a win-win for the town.”

“I think it’s a great deal for the town, it’s a great deal for the taxpayers. We know that the cost of energy is only going to go up in the future, and this will save us some substantial money,” Polisena said. “I’ve received calls from other developers that would like to put solar farms in, which I have no problem with. It’s a fabulous idea. Sunlight is free.”