EBEC: The Real Story

After reading through the hysteria of negative Patch blog posts and hearing the push-back from uninformed “taxpayer” groups that fear and distrust almost any change or innovation, I’m glad that EBEC has finally posted a blog entry of their own that addresses most of the concerns voiced so far. This blog post is available in its entirety at http://eastbayenergy.org/blog/ but I thought that it would be worth excerpting and summarizing some of its key points:

Why form a quasi-agency and why does it need eminent domain? Short answer: To be able to issue bonds. “Creation of a quasi-public agency requires a specific power as an “indicia of governmental authority”. There are three powers: police, taxation and eminent domain. The use of eminent domain in member municipalities is in the legislation. Eminent domain is a serious and complex process, and there is no current plan to use it, but EBEC requires one indicia of governmental authority to issue bonds. For EBEC there are three checks on the use of eminent domain: 1.) Any EBEC project and the exercise of eminent domain will require a majority vote of the board, 2.) Use of eminent domain will require the affirmative vote of the host municipality’s appointed representative and 3.) EBEC projects will include a host community payment. The council must approve the terms of this payment and any other restrictions including the use of eminent domain. But the governmental authority of eminent domain must be in the enabling legislation so that EBEC can issue revenue bonds. EBEC will issue tax-exempt bonds to finance the Tiverton project and future projects, and will not use the bonding capacity of member cities and towns, so the municipalities will not be liable for the debt, EBEC will.”

How will the Tiverton wind energy project be funded? “Our first project, the Tiverton wind farm, is an expensive one. Our member cities and towns will reserve their bonding capacity for their own projects and our project will pay for itself. The bonds will be guaranteed by a long-term electricity purchase contract with National Grid, who will purchase the electricity the project generates. This contract is the security that bond investors will look for. It is important to state that the Tiverton project, and any other project, will be subject to rigorous due diligence examination before it goes forward and any bonds are issued.

Why was Tiverton selected? “The Tiverton site is ideal because it is large, remote from residential areas, is near a highway for delivery of equipment, is near an interconnection site to the electrical grid, and has an adequate wind resource. The site was selected after two feasibility studies by a RI engineering firm who conducted a survey of municipal property in all nine cities and towns, with the assistance of the nine municipal planning departments.”

Will this project make our electricity rates go up? The short answer is that our rates will likely go up initially anyway, but not because of EBEC:  “ National Grid is required by RI law to purchase a set quantity of renewable energy each year or pay a penalty, and we want them to purchase energy generated in RI.... Electrical rates are regulated by the PUC and are a combination of the cost of procuring the electricity, transmission, operation and maintenance, taxes and the Renewable Energy Charge. Once again, under Rhode Island law National Grid (NGrid) must purchase a certain percentage of its electricity from renewable sources each year or pay a penalty. If there isn’t enough electricity from renewables produced in Rhode Island to purchase at a good price, NGrid has to buy it from out of state. The PUC regulates rates, and they ultimately regulate the cost NGrid will pay for any electricity it purchases. Because they have to buy from renewables, don’t we want NGrid to buy a Rhode Island product and keep the money in-state for our taxpayers?

These excerpts address many of the key issues that are worrying people about EBEC, but the key reason for allowing EBEC to move forward is so that it allows for the process of legislative review to take place at the State House. After this process, each City or Town that is an EBEC member will have an opportunity to review the resulting legislation and decide whether or not they want to stay as members. By all means, tell your representative about your concerns but please do some reading first. The EBEC blog site is one source of information on this topic, but there will also be others. Don't rely on any one source, but do the research before you condemn a project that seems to me to have a lot of promise for our communities.