Brick Council Again To Consider Returning Solar Field Escrow

When the Brick Township Council meets Tuesday evening, members will be again considering a resolution to return nearly $500,000 to the redeveloper operating the solar fields at French’s Landfill.

That resolution first came before the council two weeks ago, but was tabled by the council after questions were raised about some aspects of the agreement and whether the redeveloper, Brick Standard, had indeed fulfilled all of its responsibilities.

George Scott of Queen Ann Road, who has been critical of the solar fields contract, urged the council at the April 7 meeting to hold off approving the resolution, which would release $462,688.86 that is being held in escrow, because there were some obligations that had not been fulfilled.

Scott also wanted to know what rate the township was paying for the electric generated by the solar field.

A February 2012 letter from Brick Standard’s law firm, when the council was discussing bonds to pay for the construction, set out different rates Brick Standard would charge the town for the electricity generated by the solar field -- 8.5 cents if the bond interest rate was 4.3 percent, or 8.75 cents per Kilowatt if the bond rate was 4.4 percent.

But a follow-up letter in March 2012 changed that agreement to 8.75 cents if the bonds were sold at 4.5 percent, eliminating the 8.5-cent offer.

The agreement signed in 2011 provided that the township would bond for the money to build the solar array, with Brick Standard paying the debt service on the $34 million in bonds.

The provision for the 4.5 percent rate to be paid by Brick Standard in exchange for lower electrical rages was accepted by the council in 2012. But then-Mayor Stephen Acropolis refused to sign off on it, citing concerns that the town would be on the hook if the interest rate on the bonds came in at more than 4.5 percent.

At the time, Scott Pezarras, the township business administrator then, said the bonds would be financed for good once the solar array is completed, which could take 15 to 18 months after construction begins.

That happened in October 2014, and the final interest rate on the bonds was 2 percent, according to numbers cited during the council meeting April 7.

But how that final bond rate affected the electrical rate the township is paying was not clear.

That March 2012 letter also set out terms where the township would receive money if the solar energy credits sold at more than $400 apiece. In the last year, that number has never risen higher than $225 in New Jersey, according to a website that tracks the prices of solar credits.

At previous council meetings, Mayor John Ducey has said the original deal negotiated has cost the town $2.6 million, and that the town has done the best it can to improve the deal on the 42-acre site, a former Superfund site. A solar farm was one of the few options the township had, since it is what is known as a brownfield site, which is not marketable to developers who would build homes or businesses.

According to a Patch article during the bond discussion, the township was expected to generate revenue if the bond rate was less than 4.5 percent, because Standard Alternative would have been be required to pay the town back at a higher rate.

The township handled the bonding because municipal bonds are paid off at a much lower interest rate than commercial loans.

The company was to pay Brick a $2.5 million upfront lease payment, then up to $85,000 per year for 15 years. The township was expected to save estimated $9 million over the 15 years it will take to pay off the bonds due to the lower cost of the electricity, officials said at the time.