Two Bridges Regional Jail Authority

Jail Authority mulls solar project

Posted:  Wednesday, September 6, 2017 - 9:15am

ReVision Energy of Liberty met with the Two Bridges Regional Jail Authority Aug. 30 to discuss a potential solar project, which, if approved by the full board, would go in a lot owned jointly by Lincoln and Sagadahoc counties behind the jail.

The project would not involve any immediate layout of funds for the jail. Known as a Power Purchase Agreement, or PPA, it would involve a third party who would finance the solar panels andReVision Energy’s work. The third party would sell the power to the jail for a flat fee for 20 to 25 years, and the jail would enter into a net metering arrangement with Central Maine Power to purchase the extra energy.

The third party would glean the state and federal tax benefits and all the depreciation for the panels at an accelerated rate. In year seven, the jail would have the option to purchase the panels at about half the cost of the new panels, which are $1.5 million and $2 million, or it could remain with the PPA for the contracted term.

The jail, as a nonprofit, would not be able to offset tax liability, nor could it take advantage of depreciation, making an outright purchase less attractive, said Sam Lavallee, director of financing at ReVision Energy. “Our goal in organizing these projects is not to leave tax benefits on the table,” he said. “That’s why it makes sense for a third party to start the project and get the benefits, which it can then use to finance a lower energy cost to the jail.” However, starting in year seven of the agreement, the jail would be able to finance and pay off the panels using its own energy savings, which Lavallee said could amount to several million dollars over the 20-25 year life of the project.

Even after 25 years, the solar panels are expected to work at 80 percent of top output, according to ReVision Energy’s Andrew Kahrl.

The total output of the system proposed is 1 mW, which is about what the jail has been using per year. Because the system would be grid-tied, not all the energy would have to be used during daylight hours; the energy would flow to CMP and be used as the jail needed it. The jail recently replaced its air exchange system, and is expecting increased efficiency.

ReVision Energy would be the builder and the designer of the solar project. It would not want to go forward without assurance it would be selected as the vendor, Lavallee said. It was unclear to members of the Authority if granting ReVision the project as a sole source violated policy, since the jail would not be responsible for any initial funding.  James Bailey, interim administrator, also had questions about whether or not the costs for the solar power could compete with a summer wholesale price the jail had recently received, since the figures ReVision Energy was working with came before the summer cost structure came into effect, and also before the efficiencies from the new air exchange system could be seen.

The full jail authority will meet Sept. 13 to discuss the potential project.