The Hudson County freeholders have raised serious concerns about the future of a proposed solar energy program that might reduce energy costs to the county and some municipalities, saying that participation in a 15-year contract could force the taxpayers to repay a $5.7 million loan if rates for solar power keep dropping.
The Hudson County Improvement Authority (HCIA), an autonomous county agency, is asking county government to provide a $5.7 million development loan for what is expected to be a $13 million to $15 million project to place solar panels on county, municipal, and school buildings.
HCIA officials said more than 100 sites in local towns were considered for the program, and that 36 were selected as suitable sites for installation of solar panels. The county would work with a developer to install the panels, and both entities would earn fees for their usage. The loan would be paid back from these fees, as well as with Solar Renewable Energy Certificates (SRECs) credits offered by the federal government to electricity providers.
“Time after time, we get presented with things that have to be passed right away.” – Bill O’Dea.
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But HCIA officials said that their estimates of energy savings, which could reduce participating government group’s electric costs by as much as 40 percent, were based on an already extremely conservative outlook, on rates that are less than half of what is currently being paid.
Deadline to participate
County officials are scrambling to find a way to include municipalities such as Hoboken, West New York and Kearny into the program in order to avoid higher rates if those towns join after Dec. 31, when a federal incentive grant subsidizing the lower rates expires. The freeholders also asked why some towns were left out or chose not to participate.
The HCIA has taken bids on the project and has a company in mind to work with. The developer, whom they haven’t identified yet, would own and maintain the panels, and would charge 9.5 cents per kilowatt hour as opposed to the 16 cents that schools, municipalities, and the county currently pay. Without the federal subsidy, the price could rise as high as 22 cents pkw.
The developer of the project would have to begin spending money on the project before the end of the year or lose the 30 percent federal incentive grant.
Freeholder Bill O’Dea was extremely critical of the timing of the proposal, saying that members of the HCIA had more than a year to present the proposal to the freeholders for approval, but brought the matter up only weeks before the deadline.
“Time after time, we get presented with things that have to be passed right away,” O’Dea said. “Had you brought this to us in October, we could have set aside time to find out why those others did not want to be included, and if they want to be included now.”
Norman Guerra, executive director of the HCIA, said getting a commitment from the Jersey City Board of Education caused the delay.
Freeholders Jose Munoz and Jeff Dublin said the HCIA had left freeholders from West New York and Jersey City out of the process, when they might have helped get results earlier.
Munos pointed out that West New York – one of the towns he represents – had a change in administration over the last year and currently has a building that would be well suited for the program.
Kearny Mayor Al Santos said the Kearny school district did not take part because all of its schools have installed solar panels, although the municipality was still interested.
Although municipalities and school boards – including Jersey City, the Jersey City school district, the City of Bayonne, Harrison, the Harrison Board of Education, the Weehawken Board of Education, North Bergen, Secaucus and East Newark – were asked to pass resolutions showing an intent to participate, any one of them could opt out of the program at any time.
Also a financial concern, O’Dea said, is a reverse possibility: that solar electricity rates might rise above the current level, but that any increase would benefit the developer.
He wanted to make sure that the county and other suppliers got a piece of the profits, especially after the first five years, by which time the developer will have already recouped its development costs and the county would begin paying the principal on the loan if the developer were to walk away.
“The county is at risk after the five years because we would have to pay off the bonds,” O’Dea said.