Present were: Scott Bigelow – Chairman, Brad Hubbard – Commissioner, Don Steadman – Commissioner, and Brian Allen – General Manager.
Agenda: The Board voted unanimously in favor (2-0) to accept the Agenda as presented.
Scott Bigelow arrived at 4:30 PM.
Wind Turbine Update:
Mr. Allen explained the actions he took after receiving the 02/01/2012 proposal from Lumus Construction offering their assistance in replacing the gearbox for PMLD for cheap money and a quick timeframe. Initially the proposal sounded intriguing to Mr. Allen, however after reviewing it with Attorney Scobbo and discussing some of the claims Lumus made with Fuhrlaender (FLAG) management regarding FLAG’s involvement it was clear that the proposal had too many uncertainties and other issues that would have to be reviewed in detail and would take additional time and money. Mr. Allen explained that Lumus had made promises on FLAG’s behalf and FLAG confirmed that they were not working with Lumus. There were also concerns with the warranty wording. The Board agreed with Mr. Allen’s recommendation to terminate discussions with Lumus.
Mr. Allen and Attorney Scobbo will respond back to Lumus Construction in regard to a possible pending litigation for approximately $76,000 in unpaid overage charges. Attorney Scobbo is also working on a formal complaint to the Attorney General’s office regarding Lumus’ business practices.
Mr. Allen presented the Board with a copy of the final version of the February 2012 Settlement Agreement that PMLD, the Massachusetts Municipal Light Department Wind Energy Cooperative Corporation (MMLDWECC) and Furhlaender (FLAG) that Attorney Scobbo and FLAG Attorneys wrote after much negotiation. A copy is placed on file. Mr. Allen reviewed the agreement in detail and provided the Board with a snapshot of the top 10 key points of the agreement.
The Board asked Mr. Allen to sign the agreement and confirm FLAG’s signatures before releasing the funds. Mr. Allen explained that once the initial $100,000 is wired to FLAG the gearbox would be shipped and it would take about 4-6 weeks.
Mr. Allen confirmed that a representative for PMLD will be in Germany for the warranty review process/inspection of the broken gearbox.
Mr. Allen explained that the worst case cost scenario to replace the gearbox has been built into the MMLDWECC operating budget and if we are required to pay for the broken gearbox then PMLD will work with MMLDWECC to pay it as required. The insurance claims would also be submitted and any insurance money received would be applied towards the expense.
The Board asked Mr. Allen to talk to Scott in FLAG’s North American office to discuss and draft a warranty plan for either one or two turbines for a 1, 2, or 3-year term for PMLD to consider. Mr. Allen will also confirm the full involvement/turnkey process for the gearbox delivery, install and return shipment.
The Board acknowledged that the Town Treasurer will do the transfer of the $100,000 to MMLDWEC to be transferred to Germany; and an additional $100,000 in the depreciation account is earmarked for the crane costs.
Mr. Allen acknowledged the Board’s request to have PMLD eyes on site during the gearbox project so that we can maintain order and control and handle any unexpected issues/tasks during the project.
Mr. Allen explained how invoices flow through MMLDWECC to pay for wind turbine expenses incurred by PMLD and confirmed that there is a legal budget line item in the MMLDWECC operating budget.
Mr. Allen updated the board on his meetings/discussions with MMWEC and the MA Clean Energy regarding solutions to address the wind debt. Solutions include possible sale of green energy to IOU’s, wind power sales and/or becoming a member of the Berkshire Wind Cooperative. Ron Decurzio of MMWEC ran the numbers and is hopeful that joining a larger Wind Coop will allow PMLD to offset the cost per megawatt for wind energy to its participants, while reducing the yearly debt obligation for PMLD to a more manageable level. Mr. Allen will attend a Berkshire Board meeting in the future to present the idea, however the gearbox must be fixed first to make this a viable business arrangement with the other municipals in the Wind Coop.
Don Steadman made a motion to have Mr. Allen enter into the settlement agreement with FLAG as presented and sign the agreement and put the gearbox fix in motion. Scott Bigelow seconded the motion. All were in favor (3-0).
Don Steadman made a motion to authorize the transfer of $200,000 from the MMDT Depreciation Account to the Massachusetts Municipal Light Dept Wind Energy Cooperative Corporation to fund the gearbox financial obligation. Scott Bigelow seconded the motion. All were in favor (3-0).
At 5:10 PM the Board voted unanimously in favor (3-0) to adjourn.