Who Put Fairhaven in Financial Jeopardy?

The original contract protections seemed little more than a fig leaf, but the Amendment appears to tear even that modest protection away. It seems Bowcock’s Board left the town utterly naked to legal threats, without recourse. Apparently, Crotty didn’t dissuade them from doing so, either.

Friends of Fairhaven Wind would have you believe that proponents of shutting the turbines down put the town in financial jeopardy from its litigious friend, Gordon Deane. A close look at the contract, however, tells a very different story.

The 2007 contract was signed by then Chairman, Ron Manzone, and two other Selectmen, Michael Sylvia and Brain Bowcock. The developer was Jim Sweeney, President, CCI Energy, LLC.  Much of the negotiation was apparently handled by Jeffrey Osuch and reviewed by Town Counsel, Tom Crotty.

At that time, Sweeney was the proud owner of two turbines, with no place else to put them. The town held all the cards; but instead of a sweet deal; the town seems to have gotten most of the risk and Sweeney got most of the financial reward. This contract was a bad pony out of the gate.

Osuch predicted town revenue based on megawatts (capacity), but the actual contract ties rent payments to megawatt-hours (energy production). Voters weren’t told that turbines seldom produce even 20% of their name-plate capacity. That’s why the town hasn’t realized the $200K-$500K in yearly revenue Osuch projected—and never will. Town revenue will steadily decrease because it is tied to natural gas prices which will continue to fall for several years to come.

Somebody was asleep at the switch.

Section 9g of the contract also required that the turbines “would not exceed 60 dBA at the nearest property line”; but, incredibly, no penalty is defined for violations—financial or otherwise. For comparison, Hanover required Shah to pay $1,000 per day just for project delays.

Osuch told Town Meeting there was funding to restore the land when the lease expired. Though true, he neglected to mention that the amount was $500—not enough to seed new grass. Money is added to this fund based on—you guessed it—energy production. Section 11 adds 3 pennies per 10,000 KWh. This may add up to enough in fifty years or so.

Did Crotty warn the Select Board about these glaring legal omissions? Due to attorney/client privilege, he can’t say; but Manzone, Sylvia, or Bowcock could. If they flagrantly ignored his legal advice, maybe one of them will come forward, admit their mistake, and rescue Crotty’s reputation—but don’t count on it. These things happen when you don’t have open, honest government.

Towns commonly require private companies to post a bond that would offset financial damages if the company defaults or goes bankrupt, but no such bond exists in this contract. If Fairhaven Wind goes belly-up, the cost of dismantling two turbines falls on taxpayers. Falmouth estimated $838,000 to dismantle its two turbines.

This story gets worse. Towns that put contracts out to bid are accorded a right known as “termination for convenience”, but the 2011 Amendment includes this: “The town hereby expressly waives any rights it may have to cancel this Lease or discharge any of its obligations hereunder….” The arbitrary right of termination would have been powerful negotiation tool for avoiding costly legal battles, but Bowcock’s Board apparently waived this right for no good reason.

Still worse, Section 9.2 reads:

“NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITVE DAMAGES…IRRESPECTIVE OF WHETHER CLAIMS OR ACTIONS FOR SUCH DAMAGES ARE BASED UPON CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR ANY OTHER THEORY AT LAW OR EQUITY.”

This may sound fair, but Fairhaven Wind was already protected by its Limited Liability Company (LLC) status. So, the town is the big loser once again.

Basically, this clause appears to give up any right we may have had to hold Fairhaven Wind liable for anything whatsoever. The original contract protections seemed little more than a fig leaf, but the Amendment appears to tear even that modest protection away. It seems Bowcock’s Board left the town utterly naked to legal threats, without recourse. Apparently, Crotty didn’t dissuade them from doing so, either.

Recently, Selectman Geoff Haworth said of Crotty, “I see that the truth is he does what he is asked.” Perhaps true, but that’s not his job. In my opinion, Crotty’s first responsibility must be to zealously guard the town’s legal interests, not rubberstamp dangerous contracts to ensure his own fees and job security. Wouldn’t you love to know if Bowcock asked Crotty to ignore these risks to the town and waive protection from The Three Amigos?

If the Friends are looking for someone to blame for Fairhaven’s financial predicament, they need look no further than their own ranks. Apparently, Bowcock, Osuch, Crotty, Deane, Shah, and Sweeney did everything possible to ensure we were left totally unprotected. The contract tells the story. No wonder the Friends seem so anxious to point their finger at someone else.

Curt Devlin, Fairhaven, MA