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Solar energy contract to net Riverhead Town $700K

10/30/2015 11:00 AM |

Riverhead Town’s contract with Hecate Energy will result in $700,000 of revenue for the town in its first year, officials said at Thursday’s Town Board work session. 

Hecate plans to build a 7.5 megawatt solar energy park on 45 acres of a proposed “energy park” on the southwestern portion of the Enterprise Park at Calverton.

The town budgeted for $750,000 in 2015 as revenue from the solar deal, although Supervisor Sean Walter said he thinks the town may be able to fill the remaining $50,000 through increased building permit fees.

It’s unclear whether the town will collect the money before the year’s end. If it doesn’t, the town will finish 2015 with a $750,000 budget gap.

The town still needs Hecate to sign the contract and it needs LIPA, which had selected Hecate through a request for proposals in 2014, to finalize the deal.

“There’s no guarantee until they sign the contract,” Councilman John Dunleavy said. “Everybody said we were going to get money this year. Did we get any? No.”

Mr. Walter responded: “We may get the money this year.”

The contract, which the town has signed and is awaiting Hecate’s signature, calls for Hecate to lease 45 acres of town-owned land at the Enterprise Park at Calverton for $10,000 per acre. The deal would run 25 years and there would be an annual increase of two percent or the cost of living increase, whichever is more, according to Councilman George Gabrielsen.

While that would only amount to $450,000 in year one, the contract also is “front-loaded” to provide an extra $250,000 in year one, bringing the first-year total to $700,000, according Mr. Gabrielsen said.

Over the 25-year contract, the town would make an estimated $13.2 million, he said, including the cost of living increases.

Hecate was one of several solar power projects selected by LIPA in December 2014 in response to a request for proposals for renewable energy plants, such as solar panels, wind energy, fuel cells and battery storage.

However, the LIPA board opted to choose only solar projects and said a second RFP would be issued in the future, at which time other types of energy would be considered.

In December 2014, LIPA had also chosen three other solar projects on private property within the Calverton area of Riverhead Town, but later indicated there wasn’t enough capacity at the existing substation in Calverton to handle them all.

As a result, the company had considered building a new substation at EPCAL as well, Mr. Gabrielsen said.

However, on Thursday, Mr. Gabrielsen and deputy town attorney Anne Marie Prudenti said that while LIPA still may do that in the future, they are now considering plugging the Calverton solar projects into an existing substation on Lilco Road in Shoreham, north of Route 25A.

Mr. Gabrielsen said the town plans to respond to the next request for proposal LIPA issues, and if it can get deals for fuel cell or battery storage at EPCAL, those type of facilities tent to bring in more money than solar energy.

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