A solar field built at the former French's Landfill site on Sally Ike Road would save Brick taxpayers $13 million over 15 years – then more after that, a team of experts associated with the project said Tuesday night.
A group of individuals representing companies responsible for planning, arranging financing, designing and facilitating the project gathered at the township municipal complex to provide new details on the plan to install solar panels at the former Superfund site, which is now being outfitted with a permanent cap.
"The solar panels were a nice passive use of the facility," said Noreen White, the township's financial advisor on the project.
On Feb. 14, township council members will vote on whether to float bonds which will come to about $23 million. But under a redeveloper's agreement, a private company – not taxpayers – will pay back the debt.
"The township is at virtually no risk of the taxpayers ever having to pay the debt service on the bonds," White said.
Here's how the plan will work, according to officials: The township will borrow the cost to build the solar field at a special low interest rate only available to municipalities. Standard Alternative, LLC, the company selected to redevelop the site, will then reimburse the township as money is disbursed.
The township will benefit from an upfront $2.5 million payment from Standard Alternative as well as annual rent of the property between $50,000 and $85,000, depending on how much energy the site produces. After 15 years, the township will own the property outright, and will be able to generate electricity for property owned by the township and BTMUA, as well as sell solar energy credits to the power company for a profit.
In exchange, Standard Alternative will make money from the deal over the next 15 years by selling its own energy credits generated by the site.
During the 15 year period, the township and BTMUA will also be able to purchase energy for about 40 percent less than the rate at which they are currently paying, saving a minimum of about $300,000 per year, according to Business Administrator Scott Pezarras.
Over the course of 15 years, especially after the Oyster Creek nuclear generating station in Lacey shuts down in 2019, the savings on electrical costs could grow even more, said Thomas Brys, an energy consultant who worked on the project.
"Oyster Creek represents base load electricity that significantly reduces electric rates in service area," Brys said. "With that major change, it will go up significantly, unfortunately. That adds to the savings greatly."
Current models show the township eventually saving as much as $600,000 per year in energy costs.
Financially, officials said multiple layers of protections are added in to shield taxpayers from ending up on the losing side of the deal. The project is backed by multiple guarantors, and if Standard Alternative were to go out of business, the energy generated by the station would generate far more revenue than the township would be required to pay in debt service.
"If they default on anything, they're gone, and we have the fully functioning array which is enough to more than cover the debt service," said Township Attorney Jean Cipriani.
As to why the township couldn't simply build the array itself: special incentives that lower the cost of the project are only available to private companies under the Obama administration's stimulus package. The idea was to create jobs in the private sector, officials said.
Standard Alternative, a company created a year ago and based in Hoboken, is owned 90 percent by another company, Iron State Development. That company was responsible for developing Pier Village in Long Branch, skyscrapers in Jersey City, marinas on the Hudson River and overseeing the Essex and Sussex project in Spring Lake.
Standard Alternative is a wing of Iron State that will focus on alternative energy redevelopment, according to Sam Faivus, the company's president.
"We are very, very experienced in redevelopment projects, brownfield projects," Faivus said.
The actual arrays will be constructed by Orion Energy Systems, a national company that designs large-scale energy projects for companies and public entities.
Orion representatives said solar panels can last for as many as 30 to 40 years, and are warrantied for 20 years. Faivus said after the site is turned over to the township in 15 years, the panels will generate about 80 to 85 percent or more of the energy they generated when new.
The solar field will take between 12 and 18 months to build, officials said, but neighbors should not worry about noise from construction.
"The construction activity for building a solar plant on top of a closed landfill is very different from capping a landfill," Brys said. "There is virtually no noise in the construction of a solar plant. There's no banging or digging, by design."
The site will also be aesthetically pleasing, Brys said, with part of the project focused on planting trees and green grass at the tract. Security systems will also be installed.
The Bottom Line
Between the upfront payment, lease fees and energy savings, township taxpayers stand to save about $13 million over the 15 years the redeveloper's agreement with Standard Alternative will remain in place, according to Cipriani. More revenue will be generated after that once the township takes full control of the site.
Township council members are set to vote next week on whether to award the bonds which would enable the project to move forward.
As for the capping process, officials say it is on schedule