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Split Maryland Board of Public Works approves solar farm lease

July 27, 2011|By ANDREW SCHOTZ | andrews@herald-mail.com
  • State-owned land near the Maryland Correctional Institution-Hagerstown and the Maryland Correctional Training Center will be home to a solar-powered electric generating facility capable of powering more than 2,000 homes at peak output.
By Colleen McGrath/Staff Photographer

ANNAPOLIS — The Maryland Board of Public Works voted 2-1 Wednesday to lease land at a prison complex near Hagerstown to a company planning a $70 million solar farm.

The board — made up of Gov. Martin O'Malley, Comptroller Peter V.R. Franchot and Treasurer Nancy K. Kopp — had to approve the lease for the project to move ahead.

The project still needs the approval of the Maryland Public Service Commission, which has scheduled a hearing for Aug. 18 in Baltimore.

Franchot questioned the lease proposal, particularly why the state didn't try to share a $24 million federal grant the project would get.

However, states aren't allowed to receive credits under that federal program, Raquel Guillory, a spokesman for O'Malley, wrote in an email after the meeting.

O'Malley spoke enthusiastically about the project, saying it's a step toward energy independence and job creation. He voted for it.

Kopp asked a few questions about the lease, then said she was satisfied with the answers. She also voted for the lease.

Maryland Solar LLC has proposed building a 20-megawatt solar farm close to the three state prisons south of Hagerstown, producing enough electricity, at peak output, for about 2,250 average homes.

Under the lease, Maryland Solar would pay the state $32,050 a year to use 250 acres, or $128 an acre. The rent would rise 3 percent in the fourth year and every other year after that.

The contract would start Sept. 1 and run for 20 years, with two possible five-year extensions.

On Friday, state Sen. Christopher B. Shank, R-Washington, sent O'Malley a letter asking for the Board of Public Works to table the matter while a new lease is considered.

Shank wrote that government bodies elsewhere have received higher lease payments and have negotiated deals in which the government shares in profits derived by the production of solar energy.

Shank pointed to another project in Maryland in which a government body supposedly will receive $2,000 an acre for a solar project on "otherwise non-useable land." He wouldn't name the government or project in his letter or during an interview, saying the lease details aren't public yet.

During Wednesday's board meeting, Maryland Energy Administration Director Malcolm D. Woolf said this project is the first in Maryland in which the state wasn't asked for a subsidy.

Besides the rent, Maryland Solar will give Washington County a $2.4 million payment in lieu of taxes, Woolf said.

The project has been estimated to require 125 construction jobs.



'Desperate for jobs'

Del. John P. Donoghue, D-Washington, seized on the economic impact in his plea to the board.

"We are desperate for jobs," he said, sharing what he described as a "heartbreaking" story of a single mother in Washington County who has a low-paying job in Montgomery County and can only afford to feed her children ramen noodles every day.

D. Bruce Poole, an attorney representing Maryland Solar, said Washington County has been "sliding back precipitously," and many people wonder which business will close next.

Woolf noted that Maryland must meet goals for renewable energy in the coming years. With 20 megawatts, the Maryland Solar project would double the state's current solar energy output, putting the state closer to its 2012 benchmark, he said.

The land Maryland Solar would use is now farmed by Creek Bound Farm LLC, at the same rent.

Michael A. Gaines Sr., the assistant secretary of the Real Estate Division in the state Department of General Services, said land values have dropped since the farm lease was negotiated in 2007; if the lease were renewed now, the state would expect the farmer to seek a lower rent.

Gaines confirmed Franchot's statement that Maryland Solar asked about the prison land first, then the state wrote a request for proposal — to which only Maryland Solar replied. The RFP was advertised for 30 days through newspaper notices and the eMaryland Marketplace website, Gaines said.

Washington County resident James Devine agreed that the lease arrangement could have been better.

"Maryland should be looking for its cut in this matter," Devine said.

Devine also questioned the propriety of Michael Enright, a former senior aide to O'Malley, as a principal in Maryland Solar's parent company.

O'Malley responded that Maryland Solar has acted "in an open and transparent way."

"Given the strides that this project will make to achieving our renewable energy portfolio, I only wish Mr. Enright had joined the private sector earlier rather than later," O'Malley said.

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