In a column that appeared in this paper last week, Duxbury was portrayed as “outsourcing” our contribution to the advancement of renewable energy by entering into financial transactions instead of developing renewable energy projects of our own.  The solar energy purchase contract that the town recently entered into with Pegasus Renewable Energy Partners was described as analogous to a “cap and trade” deal that lets a contaminating factory buy its way out of installing pollution reducing equipment.  This analogy is confusing and simply inaccurate. The Alternative Energy Committee voted to table our wind turbine project and focus on more economically attractive renewable energy proposals, primarily from solar developers, that have been submitted to the town.  One such proposal, a Net Metered Credit Purchase Agreement with Pegasus, will provide electricity cost savings to Duxbury that are substantially greater than those that were projected for the wind turbine.  The Pegasus project will provide savings for 25 percent of the town’s electricity use, and the AEC is working on similar deals to provide savings on the rest of the town’s needs.  But the impact of the town’s involvement in these projects will result in much more than simply cost savings to Duxbury.

Net Metering is a renewable energy incentive that is part of the Massachusetts Green Communities Act of 2008.  This mechanism allows renewable energy projects to hook up to the electrical power grid and receive revenue for the clean electricity that they produce.   In order to receive that revenue, projects must find a credit-worthy entity willing to enter into an agreement to buy the value of that electricity.  Here is how it works in the case of the Pegasus project:

Duxbury enters into an agreement with Pegasus to purchase the electricity credits from their solar plant. 

When the plant produces electricity, that electricity flows directly into the electrical grid; and NSTAR, the public utility that serves that region, credits Pegasus’ electric account for the retail value of that electricity.

Pegasus then transfers those electricity credits to Duxbury’s account at a discount, in our case, 18.5 percent.

It is as if Duxbury is receiving a $100 NSTAR gift card and only paying $81.50 for it, except in our case it’s more like we’re receiving a $200,000 gift card each year and paying only $163,000.

This is the structure that virtually all renewable energy projects in Massachusetts use, including town-owned wind and solar projects.  It is the structure that our wind project would have used and it is the structure that the AEC is currently negotiating for the solar project on our town landfill.  Clean renewable electricity flows into the grid, producing electricity credits from the utility.

The single most important thing that a renewable energy project needs to secure financing and become a reality is a long-term contract with a credit worthy entity to purchase its Net Metered electricity credits.  Duxbury’s role in purchasing these credits is critical.  By offering our AAA credit rating, together with our willingness to understand and work through these complicated structures, we are providing the essential ingredient to creating exactly the type of renewable energy facilities envisioned by the Green Communities Act. 

The Pegasus project alone will generate 1.3 million kilowatt hours of clean, renewable electricity into the grid each year for the next 30 years, offsetting the need to burn 25,000 tons of coal (think of a line of 10 ton trucks bumper to bumper, from here to the Sagamore Bridge), and Duxbury will receive an 18.5 percent discount from the electricity.  That’s a win for the project, a win for Duxbury and a win for the planet.

Jim Goldenberg, Chair

Alternative Energy Committee