The Martha’s Vineyard Airport Commission last Thursday approved a contract with Syncarpha Capital, a New York–based private equity firm that operates solar farms throughout the Northeast, to purchase power from the company’s off-Island solar farm in Freetown.
The unanimous decision followed lengthy debate, during which members of the airport commission said it was a complex proposal, one they had not fully reviewed, and questioned what it was they were being asked to vote on.
Pressed to take action by commission chairman Myron Garfinkle, they did vote.
The airport now spends about $130,000 a year on its electric bill. This deal is calculated to shave approximately $31,000 a year off that bill and ultimately save the airport $825,000 over the course of 25 years.
Under the complex financial deal, the airport agrees to purchase a 13 percent share of the power generated by Marie’s Way Solar One, a 5.3-megawatt solar farm in Freetown owned by Syncarpha. That 13 percent will meet about 85 percent of the airport’s power needs, according to airport officials.
In the complex world of state and federal renewable-energy tax incentives and credits, government entities that purchase solar power earn higher tax credits than private institutions. The airport, which is a tax-free entity, would then sell those tax credits to Syncarpha.
Mr. Garfinkle told The Times in a phone conversation that Syncarpha stands to earn $3,670,000 over the course of its 25-year energy contract with the airport. Syncarpha has agreed to give the airport $825,000 of that amount in return for the tax credits.
“We’re buying energy from somebody because we are a municipality. For tax reasons, we are giving them the benefit of selling it at a higher rate,” Mr. Garfinkle told the commission last Thursday. “By finding us as an off-taker, we increase their yields so much that they can pay us to take it.”
Too good to be true?
Airport commissioner and businessman Don Ogilvie asked for clarification on the overall net savings of the contract. Mr. Garfinkle said that in the first year, the airport would receive $31,000 plus a $25,000 signing bonus, totalling $56,000. After that, the airport would receive approximately $31,000 for the next 24 years.
The complexities of the net-metering arrangements generated some confusion, and also raised a number of concerns about the solar contract itself.
Mr. Garfinkle told the commission that the contract had been vetted, but there were two paragraphs in the contract that attorneys were reworking, regarding how the airport was paid and when they were obligated to pay Syncarpha.
“Offhand it seems to be premature to approve a contract that we don’t have,” commissioner Robert Rosenbaum said.
Commissioner Clarence “Trip” Barnes said that the deal sounded too good to be true. Syncarpha was going to simply give the airport $825,000 just for signing up? “Why are they being so nice?” Mr. Barnes asked.
Mr. Garfinkle said that Syncarpha will earn $3,670,000 over 25 years with their deal with the airport.
Commissioner Kristin Zern asked that in the future there be an overview of agenda items, like the Syncarpha contract, that would provide answers to basic questions the commission may have.
“That’s true for the other things, too,” Ms. Zern said. “I think there needs to be more pre-education.”
After more discussion, Mr. Ogilvie made a motion to approve the deal. Ms. Zern seconded it. They were joined by commissioners Mr. Barnes and Mr. Rosenbaum, along with chairman Mr. Garfinkle, and voted unanimously to approve the contract. Commissioners Christine Todd and Richard Michelson were absent. Airport manager Ann Crook provided no input to the discussion.
In a telephone conversation with The Times, Mr. Garfinkle said that net-metering arrangements are “ridiculously complex,” and that it has taken him months to get a grasp on it. When asked why the yearly dividends add up to only $800,000, Mr. Garfinkle explained that it’s dependent on how energy rates fluctuate. The $825,000 was based on a 1 percent energy-rate increase, he said.
He said that the Syncarpha deal was one of three options the airport had to take advantage of solar growth. Building a solar farm on airport land has been on the commission’s radar for some time now. Mr. Garfinkle also said he was trying to “motivate” Eversource to build a solar farm on the four acres that the company now leases from the airport to stage backup generators.
The third option would be a deal like the one with Syncarpha. Mr. Garfinkle described it to the commission as an option where no one would have to lift a shovel.
He told commissioners Thursday that if they accepted Syncarpha’s offer, they could still utilize their other two options without it affecting their contract.
Oak Bluffs option
On land not far from the airport, on a heavily wooded well site off Barnes Road, the Oak Bluffs Water District (OBWD) proposes to construct a solar array. That project is now under review by the Martha’s Vineyard Commission (MVC) as a development of regional impact.
Boston-based BlueWave Capital, in partnership with SunEdison, is proposing to clear 10 acres of wooded area for a solar array proponents estimate would generate 1.6 megawatt-hours a year.
Opponents of the project said the water district ought to look for other options that do not require cutting trees.
Mr. Garfinkle told the commission Thursday that he wished Oak Bluffs would work with the airport on a potential solar farm, instead of looking to build at the OBWD’s proposed site, which is roughly half a mile from the airport.
“The fact of the matter is that we [the airport] have uniquely positioned land because we’re not in the forest, and our land is different from any other land on the Island in that it won’t get used for farmland,” Mr. Garfinkle said to the commission. “I wish Oak Bluffs would come to us and say ‘Hey, we’d like to do this.”