The town has canceled its contract with a solar power company to purchase discounted energy because it could have been forced to pay millions of dollars if it were to cancel later.
The Town Council voted unanimously on July 1 to appoint Lodestar Energy of Avon as the town’s authorized representative for the virtual net metering program in connection with the construction and operation of a solar farm in town.
Officials estimated the S, which will still be built on Powder Hill Road, would save the town $1.6 million over the next two decades.
As part of the agreement, the town had the ability to cancel Lodestar’s appointment at any time for any reason without further obligation, which the council voted 11-0 to do on Jan. 6.
Town Manager Christopher Bromson said the town entered into the agreement to explore the project subject to negotiating the terms, but upon further discussion it didn’t seem to be a good fit.
As town staff — including Assistant Town Manager Kasia Purciello, Director of Finance John Wilcox, and Assistant Town Attorney Mark Cerrato — negotiated the contract, there were some terms they felt weren’t in the town’s best interest, Bromson said.
“It was a risk we weren’t willing to take,” Bromson said.
Purciello said the decision was made following a cost-benefit analysis.
She said town staff agreed the risk of the contract was too great because of the high cost of damages if the town needed to exit the agreement for any reason.
“It was a very good conversation we had with Lodestar, and they’re still continuing with building their facility in Enfield. We wish them the best in their endeavors, and there’s no hard feelings on either side,” she said.
While the amount varied by year, Purciello said the damages could have been millions of dollars.
Though the town didn’t foresee any reason to exit the agreement, the term of the contract — 20 years — presented too many unknowns.
Jaime Smith, Lodestar co-founder, told the council in July his company develops solar power-generation facilities around the state and supplies the electricity to Eversource, resulting in power credits to any towns that sign up for it, including South Windsor, Suffield, and Vernon.
Smith explained that the electricity produced by the solar farm is sent to the grid, producing credits. Lodestar then communicates with Eversource, which provides the town’s electricity, to transfer the credits to the town’s account.
When the town receives its Eversource bill, it would be the normal amount, minus 15 cents per kilowatt hour in credits.
So essentially, the town would pay 85 cents on each dollar — instead of the full price — for the electricity costs on the top town-affiliated accounts, such as Enfield High School, John F. Kennedy Middle School, and the former Fermi High School building at 124 N. Maple St., which has been rebranded as the Enfield Town Annex.