With the large number of questions we are receiving concerning our wind power project, we cannot answer all of them individually. We hope that these answers will provide answers to the most frequently asked questions. If your question is not answered here, please e-mail questions@PortsmouthRIenergy.com and we will contact you directly or post an answer here.

Questions are grouped in several categories for your convenience.

FUNDING and ECONOMICS

Q-F-1 - How do we pay for the turbine?
A-F-1 - If our calculations are correct, the turbine pays for itself. Of course, we have to first borrow the money, in the form of a bond. But, with the energy that the turbine produces that displaces the power we have to buy from the power company, we actually provide revenue into the Town treasury during the first year of operation. After we pay off the bond, we get even more back. Things such as the fact that we are compiling and selling Renewable Energy Credits (RECs), have the option of a no-interest Clean Renewable Bond (CREB), and have gotten a grant of $25,000 from the State for our feasibility study all goes into the equation to provide a positive cash flow to the Town. And in 12-14 years, when the CREB is paid off, the return gets even better. By the way current Turbines have a 25 year useful life.

Q-F-2 How much return do we expect to get from the turbine installation?
A-F-2 Based on some related information we have gathered (like the performance of the Portsmouth Abbey turbine) and wind predictions from available models, we think we will return about $80,000 to the Town during the first year of operation. After the bond is paid off (depending on the terms of the bond - about 12 years) the return is significantly more. Over a 20-year turbine life, (which is a conservative estimate, since many turbines are expected to have a life of 20-30 years) the return is expected to be over a million dollars. And, that includes all costs including construction and maintenance. But, we are not relying on our estimates. As part of our $25,000 State grant, we have contracted with an expert firm to do a detailed analysis and provide us an economic model to ensure our estimates are correct.

Q-F-3 How does the Clean Renewable Energy Bond (CREB) work?
A-F-3 In July, 2005, Congress passed the Energy Tax Incentives Act of 2005 This Act permits State and local governments to issue CREBs to finance certain renewable energy and clean coal facilities. CREBs are a new form of tax credit bond in which interest on the bonds is paid in the form of federal tax credits by the United States government in lieu of interest paid by the issuer. CREBs, therefore, provide qualified issuers/qualified borrowers with the ability to borrow at a 0% interest rate. The federal tax benefit to the holder of a CREB is greater than the benefit derived from tax exempt municipal bonds in that the tax credit derived from a CREB can be used to offset, on a dollar-for-dollar basis, a holder’s current-year tax liability, as opposed to excluding interest from gross income, as permitted for tax-exempt bonds. Unlike tax-exempt bonds, CREBs are taxable obligations, and the tax credits received are treated as interest and included in a bondholder’s taxable income. More detailed information on CREBs is available in a document by Edwin Oswald and Michael Larsen of ORRICK . See, also, the IRS Announcement and the Letter of Award to the Town.

Q-F-4 - How will this turbine project affect my taxes?
A-F-4 - See the answer to Q-F-2 above. A penny on the tax rate equates to about $32,000 in taxes. The extra money we get by displacing the electicity supplied to the school will go directly back into the town's treasury. If we get what we expect back during the first year of turbine operation, this will be about 2.5 cents reduction in the tax rate. After the bond is paid off, it could be as high as 7.5 cents reduction on the tax rate. This is like money being returned to the taxpayers. Wouldn't it be nice if the Town Council decided to send a check back to each taxpayer (instead of the supplemental tax bill the citizens just received)?

Q-F-5 - Have we looked at other 'opportunity' uses for the land the turbine will be sited on to see if there are any better economic alternatives - like selling the land to a developer?
A-F-5 - The land parcels that are candidates for these turbines are on school property,owned by the Town. Although other uses for tha land is something that will be addressed, the fact is that the turbine tower itself takes up little space (about a 12 foot diameter circle). Other open-space activities can use the land around the turbine. (In Hull, Massachusetts, the high school footbal field in within feet of one of their turbines). The turbines will have buffer zones, to account for the extremely remote case where a mechanical casualty occurs, to ensure that damage to a building does not occur (such as in an extreme storm or other natural disaster). But other activities can be done very safely right up the the turbine tower. It is unlikely that the Town would ever sell any of this school land for development. Even the most conservative estimates would show that the revenue generated in selling a small parcel such as this is a small fraction of the revenue that a wind turbine would generate.

Q-F-6 - Does your predicted "over a million dollar" ROI over the 20-25 year life of the turbine include the costs associated with removing it? I am concerned that without a demolition plan the turbines will join the many obsolete solar panels dotting the Town as dangerous memorials to sustainable energy intentions gone bad.
A-F-6 - Our plan for the turbine specifies "cradle to grave" planning. The turbines are made to be substantially recyclable and of significant salvage value. The preliminary indications of our economic analyst and wind turbine expert consultants is that the value of the recyclables in the turbine will pay for the decommissioning and disposal costs.

Q-F-7 - Have we considered the cost of maintenance and upkeep? What is the lifespan of a turbine?
A-F-7 - Our economic analysis is considering all the "cradle to grave" costs. That means everything from the construction of the turbine, operation and maintenance, to hauling it away at the end of its useful life is being considered. We have hired and expert firm to ensure we don't miss any of the costs of building and operating a turbine. As for the lifetime - turbines have a minimum expected life of 20 years. Our economic analysis will use that in our calculations. Many turbines outlive that 20 year life, so any added years of operation adds to its economic value.