Warren County Report

June 1, 2010

Is the future now or never for solar in Front Royal?

Fairy tale 'Brown to Green' ending to Avtex story may be history

By Roger Bianchini

At one level in mid-May things seemed to be moving at a rapid pace concerning a solar power proposal for Front Royal, yet at another it appeared things were creeping toward oblivion.

At a May 17^th Front Royal Town Council work session a letter from AMP-Ohio Assistant Vice President of Power Supply Planning and Transmission Michael Migliore outlined his company’s plans to begin introduction of 300 megawatts of solar power into its municipal cooperative’s energy network, which includes Front Royal.

That plan begins with the creation of 8.07 megawatts of solar power at a Front Royal site as soon as possible, Migliore wrote.  He also stated that AMP was involved in development of a Power purchase Agreement (PPA) with Standard Energy to facilitate that solar energy plant and that company officials had met with representatives from the local Economic Development Authority to discuss the proposal that day.

“The first site to be developed  by Standard will be in Front Royal,” Migliore said in a May 17^th letter to Town Manager Michael Graham.

However after the intervening week and comments at the subsequent council meeting of May 24^th, there appear to be many hanging ends on whether Front Royal will ever host any portion of a solar power generation facility.

Two primary questions appear to remain:

1. will the Front Royal Town Council ever commit to purchasing any solar power

2. and if so, where will the Front Royal solar fields be located?

AMP options

To facilitate its solar proposal, Migliore wrote that AMP is presenting two options to the town.  The municipal energy cooperative’s preferred option appears to be to facilitate immediate movement on construction here.  That would entail the town committing to purchasing the entire 8.07 megawatts up front, then reduce its commitment down to 2 megawatts as other AMP members buy into the company’s  initial solar power offering from the Front Royal site.  The second option is that the town only commit to its eventual 2 megawatt purchase with construction commencing after the other member municipalities buy into the remaining 6.07 megawatts.

Perhaps ironically at the May 24^th town council meeting, the man Vice Mayor Bret Hrbek has accused of attempted sabotage of the solar power proposal brought here last June, pressed Town Manager Michael Graham to reveal “the good news” about that proposal.

Councilman Tom Sayre initially questioned the business and personal character of potential private sector solar investors in the fall of 2009.  That criticism focused on NY developer Kent Swig following a council authorized trip to New York city by Mayor Eugene Tewalt and Graham to listen to initial project investment strategies.  Later Sayre, along with Chris Holloway and Carson Lauder questioned the town manager’s involvement in the negotiating process leading to some testy work session exchanges earlier this year.

But on May 24^th things seemed rosier as Sayre asked Graham if he was going to reveal what the councilman termed “good news” about the solar project.  Graham responded that he was reluctant to address the proposal’s status because as of yet AMP President Marc Gerken had not signed off on the AMP board approved moves on the development of solar energy.  So as of yet, Graham explained, nothing was or is official on any AMP-Standard Energy solar movement toward Front Royal as part of a now multi- faceted plan spread across many member localities.

EDA perspective

Following that exchange between Graham and Sayre, EDA Executive Director Jennifer McDonald addressed the referenced May 17^th meeting with AMP and Standard Energy officials, Magliore from AMP and Mark Ballentine and Todd Wyder from Standard.

She reiterated that the AMP plan did not involve placing all of its proposed 300 megawatts of solar power here.  She said that it appeared the initial 8 megawatts might be increased to 20 megawatts or up to a maximum of 40 megawatts here.

She agreed with Graham, that she had received no indication that AMP’s chief executive, President Marc Gerken, had signed off on committing the company to the board approved solar plan starting in Front Royal.  She also added that the EDA was showing other properties than Royal Phoenix as potential solar field sites. – “Royal Phoenix may not be the best location for them,” McDonald told the board.  She identified the EDA – owned Happy Creek Industrial/Tech Park as one alternative location, and said other properties were being considered as well.  Later she explained to us that it appeared that multiple sites could be utilized for whatever solar plan might be realized here.

McDonald added that it was her perception the agreement between AMP and Standard Energy was “totally separate” from previous solar discussions between Standard Energy or SolAVerde and the Town of Front Royal.  Increasing skepticism within council surfaced during a December to March RFP and consultant evaluation process about the town becoming directly involved in a partnership design-build option or a full Power Purchase (and resale) Agreement with a partnering solar development company.

In a related development, Tom Conkey later asked that an agenda item he originally introduced on May 10^th that all business negotiations involving solar power be taken over by the EDA be removed from the May 24^th agenda.  Conkey explained that in the wake of McDonald’s presentation it appeared events had overtaken his initiative and that it was no longer a necessary move for council to make.

To be or not to be…

However with that agenda discussion removed from the docket, several councilmen pointed out the town still was directly involved in the ultimate decision making process on whether solar power ever comes here.

Carson Lauder questioned McDonald about the ongoing necessity that the town’s electric department provide the access for any locally produced solar power into the regional grid.  McDonald agreed that was the case.

Sayre then referenced his “understanding of human psychology” to point out that if the town refused to purchase any power from an AMP- proposed solar field locally, it was likely no other member municipality would either, and the project would likely die.  With AMP’s vice president of power planning presenting two options to the town, both involving a minimum commitment to purchase 2 megawatts of solar power, it appears Sayre needn’t have focused on the nebulous mysteries of human psyche, but rather simply on the obvious to make his point-  we don’t buy in, they don’t build here.

Ghost train?

McDonald said it appeared the solar negotiating process was back to square one as far as land is concerned.  The EDA had entered into a tentative lease to purchase agreement with SolAVerde for 26 acres available now at Royal Phoenix as the site for the first 4 megawatt solar field.  However, now that the proposal has gone in other directions through the AMP network, that lease agreement is obsolete, she said.

McDonald added that Standard Energy had initiated the discussion of alternative locations through Royal Phoenix remained a possible for at least a portion of the solar field.  Later we asked McDonald about the availability of an additional 40 acres mentioned for a Phase 2 development of an additional 9 megawatts at Royal Phoenix.  She replied that at this point the EDA has received no timeline earlier that June 2011 on the release of other portions of the planned business park for development.

She said he hoped the jobs envisioned as part of an associated solar panel manufacturing and distribution facility, likely targeted for the nearby Old Virginia Plant would remain a part of the subsequent negotiations.  Royal Phoenix’s location adjacent to both railroad tracks and a potential manufacturing site made it an initially preferred location for both SolAVerde and Standard Energy, the latter when the entity was created out of a merger of the original SolAVerde group, Standard Solar of Maryland and Steve Lamb’s True Cast Capital financing grouped based in Middleburg.

However as far as the future of solar power in this community, those RR tracks may be leading nowhere fast.

What will we do here?

Perhaps coencidentally, on May 19^th the EDA Board of Directors reviewed changes it will submit to the EPA regarding restrictions on uses at the Roya Phoenix site.  Most of those restrictions date to early in the cleanup and eventual remediation process when as McDonald told the board they “thought back then that it would never be as clean as it will be.”  She also pointed to some inconsistencies such as the ability to manufacture baby food at the site but not have restaurants.

As they approached the task of what to ask for, what to reject and what kinds of building restrictions to maintain within the framework of town and county codes,  County and  EDA attorney  Blair Mitchell said, “ You have to decide if you want it to look like Main Street or Riverton Commons.

Among the changes that will be requested are to allow educational and research facilities, including college out –campus classrooms; dinner theaters, auto assembly and repair, meeting and fraternal halls; gas stations; wireless communication towers and equipment facilities.

Remaining prohibitions would include junk yards; oil and tire storage yards; packing plants; residential units; hospitals and nursing homes; and B&B’s though motels would be permitted.

Greg Drescher noted that the EDA would have the opportunity to approve specific uses at the time applications are made.

It would appear from this discussion that the not too distant notion of a 150-acre solar field with an associated R&D Center has been abandoned as a potential site wide use for the business park- and so much for the fairy tale “Brownfield to Greenfield ending” to the 21- year- old Avtex Superfund saga.