Gloucester Mayor Carolyn Kirk has signed a power purchase agreement that will open the door to building two wind turbines that she said will ultimately generate enough electricity to power the city's municipal and school buildings.
Equity Industrial Turbines, LLC, a Needham-based company, agreed to build two wind turbines on the Gloucester Engineering property in the city's Blackburn Industrial Park in 2012 and sell all of the energy they produce to the city.
According to the agreement, the first 9 million kilowatt-hours produced by the turbines would be sold to the city at 20 percent below market rate.
Any energy produced above that level but below the total needed by the city would be sold at a 75 percent discount, according to the agreement, and any energy produced beyond what the city uses would be sold at a 100 percent discount — meaning that excess energy would become credits that the city would not have to pay for, but which could be sold back to utility companies like National Gird, Kirk said.
According to Jim Duggan, the city's Chief Administrative Officer, Gloucester has not yet worked out an agreement to sell the extra credits. But, he said, even without that income, the city could save $450,000 in the first year the turbines operate.
"This will create tremendous savings in alternative energy," said Duggan. "Alternative energy is a priority for the city."
Green energy initiatives have been growing increasingly popular in Massachusetts and the rest of the United States, but many of the projects involve sacrificing significant amounts of money in order to help the environment.
This project will likely save the city money from its current $1.2 million estimated annual electricity bill, according to Kirk, and it is an essential component to the city's grant eligibility as one of Massachusetts' designated "green communities."
"This is a good deal all around and an example of a positive public/ private partnership," said Kirk. "The city saves considerable money on its energy bill, and an important local employer, Gloucester Engineering, will benefit as well."
In order to qualify for state and federal tax breaks, Equity Industrial Turbines, LLC, will need to begin building the turbines soon. That's because 5 percent of its investment must be spent by Dec. 31 — or this Saturday — according to Duggan, and the turbines must be operational by Dec. 31, 2012.
The turbines have an estimated four-month construction time. Once they are built, they are expected to produce more than the 11 million kilowatt-hours the city uses to power all of its buildings, including the schools.
"This will be an $11 million benefit to the city over the course of the 25-year agreement," said Kirk. "These are the kinds of savings we need to generate. It frees up a lot of resources to do things we want to do, like building a new school in West Gloucester."
The purchase agreement marks the second step toward alternative energy that the city or one of its agencies has taken in the last two weeks.
Two weeks ago, students and teachers at O'Maley Middle School installed a 1.2-kilowatt turbine on the roof of the school to advance the school's science curriculum, with some electricity for the school as an added benefit.
That project was backed by the Gloucester Education Foundation, along with the Peter and Elizabeth C. Tower Foundation, the Moore Family Foundation, Geoffrey Richon Builders and J&L Welding.
Stephanie Bergman can be reached at 978-283-7000, x3451, or at firstname.lastname@example.org.