The decision on whether to build specific projects depended on their financial viability, and that depended on available sunlight and construction costs
MORRIS COUNTY -- The Morris County freeholders voted Monday night to put their embattled 2011 solar project back on track by building new facilities at 10 sites, but they also agreed to abandon six others that had been planned.
In a rare display of unity over what has been a volatile issue, the board voted unanimously for the project after hearing a presentation from an attorney for the Morris County Improvement Authority, which is managing the project.
The plan had been developed over a course of several weeks by a "Build No-Build Committee" consisting of the MCIA, its professional staff and three freeholders, officials said.
By continuing with the work, the county stands to make an estimated "revenue gain" of $3.4 million through the sale of Solar Energy Renewable Credits, which have rebounded in value, said Matt Jessup, counsel to the MCIA.
On the other hand, if the county abandoned its already-bonded project, the county would have a "shortfall" of $5.76 million, Jessup said.
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The program installs solar facilities at county, municipal and school buildings, saving the government entities money on electric bills and selling electricity to electric companies and other power generators.
The plan, whose methods had been presented at a series of public meetings over the past several weeks, drew support even from freeholders and members of the public who had been extremely critical of the solar program.
One of them, Freeholder Hank Lyon, said he chose to support the revival of the program after he was convinced its planners had conducted "a very rigorous assessment of the entire model."
"The level of risk at this point forward is very diminished, compared to before," Lyon said.
As an example of why it's better to move forward than to drop the project, Lyon said, "We already bought these (solar) panels. They are sitting in a warehouse and we can't return them ... The cost of installing panels on buildings is relatively minor."
The decision to build, or not build solar facilities at specific sites, came down to financial viability, including the size of the facility, along with such factors as how much sunlight is available and the consruction cost based on local conditions, said Larry Ragonese, a spokesman for the county.
In the end, the freeholders agreed to build four facilities at county-owned sites, including two at the county library, one at the public safety academy and one at the Office of Temporary Assistance; five at public schools, including two in Washington Township, two in Mount Olive and one in Chatham; and one at a municipal complex in Chester.
Three of those county sites were added to the program recently, Ragonese said.
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Removed from the program were six sites, including one each in Hanover, Montville, Mount Olive, Parsippany, Randolph and at the Morris County School of Technology in Denville.
"We've eliminated projects that were marginal," said Freeholder David Scapicchio. "The remaining projects will provide positive results."
The freeholders originally agreed to build 30 facilities as part of a $33.1 million bond issue in 2011, part of a 71-facility, $88 million project that also involved Somerset and Sussex counties.
However, work on the projects ground to a halt in 2013 amid lawsuits between the original contractor, Power Partners MasTec, and the developer, SunLight General, over cost overruns. Nearly all the projects had been completed in Somerset, but only half had been finished in Morris and Sussex.
The lawsuits went to arbitration and MasTec was awarded $66.3 milllion by the arbitrator. The counties agreed to pay $7 million each -- a total of $21 million -- to settle the arbitrator's award.
That, however, drew severe criticism from some freeholders and members of the public who opposed paying any more money for what appeared to be a fizzled project.
Under the new projects, the county will no longer hold the same bottom-line responsibility that it did previously, Jessup said.
Contractors, who will be supervised by the MCIA's professional staff, "will have to provide multiple layers of insurance" and will assume "the risk of loss," Jessup said.
County officials anticipate they will receive a 27 percent reimbursement from the federal government, but that requires the work to be completed by Dec. 31, 2016, they said.
Discussing the anticipated revenues, Jessup said under current conditions, the forecast is rosey. Solar credits have been selling this week for $280 -- up from $245 just two weeks ago -- with an average break-even price of $180 over the next 15 years, he said.
The plan drew support even from Barbara Eames of Hanover, an unsuccessful freeholder candidate who has been a critic of the solar program.
"From Mr. Jessup's presentation, you have thought about a lot of things," she said. "The money we're going to get back here is significant."
But another frequent critic of county spending, George Moken of Morris Township, still had his doubts.
Noting the problems in the earlier solar programs, Moken said it might make more sense to "give limited approval" to a few projects, rather than move forward on 10 at once.
Ben Horowitz may be reached at bhorowitz@njadvancemedia.com. Follow him on Twitter @HorowitzBen. Find NJ.com on Facebook.
