This email has been going around, I don't know who Peter is or where he is from, but the information is very interesting. I advise people to check out the details. Seems someone doesn't like the image this controversy is giving to the solar industry.
-----Original Message-----
From: Peter Moriarty [mailto:pemoriarty@ymail.com]
Sent: Tuesday, January 25, 2011 5:05 PM
To: pemoriarty@ymail.com
Subject: Metrotek Solar Energy Proposal
I am writing to urge the Tamaqua School District to consider declining
MetrotekElectric's request to sign a letter of intent for a solar / wind
energy power purchase agreement. I am a strong proponent of solar energy, however Metrotek's business practices and abrasive community and public relations are ruining the solar industry for everyone in Pennsylvania. As you a likely aware, Metrotek has an agreement with the Northampton School District to install a 2.2MW solar energy system as part of a power purchase agreement.
Metrotek's cost figures for the Northampton project have not sat well with me since the beginning, and after interviewing several other solar providers about panel prices, installation costs, and power purchase agreements, it is clear that Metrotek is taking advantage of a legal loophole allowing these public projects to avoid going to bid and is convincing school districts to sign a so called letter of intent, solely designed to secure no-bid status in order to inflate the profit margins of their projects.
Using Northampton's project with Metrotek as an example, consider the costs just to install a system of this magnitude. In presentations and discussions with the press, Metrotek has repeatedly said the project will cost more than $14 million to complete. At one of Northampton's board meetings, a competing solar installer mentioned that he could install the 2.2MW (2,200,000 watt) system for $4.25 a watt. According to the Pennsylvania Department of Environmental Protection
(http://www.portal.state.pa.us/portal/server.pt/community/grants_loans_tax_credits/10395/pa_sunshine_solar_program/821790), the
current average installation price for a 44kw system, some 50 times smaller than the Northampton system, is $4.97 a watt, with some installers completing systems for as little as $2.67 a watt. Granted, a solar energy system of this size would require additional cost outlays in engineering and infrastructure upgrades, but neither of those would be enough to justify charging more than the reasonable $4.25 a watt installation costs. In discussing this project with
other installers in the area, they agreed that $4.25 a watt was a reasonable estimate and suggested that it could be completed for even less. This means that if the Northampton School District was purchasing this system outright, it would cost the school district no more than $9,350,000.
So where is Metrotek getting $14,000,000 from? After comprehensive research and again discussing the project with other installers, I was able to calculate the estimated profit Metrotek will be earning from the Northampton has a result of securing an exclusive letter of intent. Using the $9,350,000 figure as a starting point, I asked what other costs would be incurred as a result of the project being financed under a power purchase agreement. It was revealed that several factors would increase the cost of the project as the result of it being financed under a power purchase agreement, including interest that
accumulates during construction, legal costs from writing the power purchase agreement, and fees that are paid to the bankers who raise the capital for the project. However, these additional factors would only add approximately 10% to the project costs, so we can safely assume that Northampton solar project isn't costing Metrotek more than $11 million (including a reasonable profit margin for them). Other system costs such as insurance, maintenance expenses, and accounting costs are taken from the annual revenue earned through the power purchase agreement and come from the money the school district pays to Metrotek
for power, and revenue from the sale of renewable energy credits earned by operating the system.
So why does the project cost $14 million? Simply, Metrotek can borrow
whatever it wants as long as paying the initial costs back will be supported by the revenue from the project during operation. Take the 10% profit margins most solar providers operate on and apply it to the reasonable $9,350,000 cost, combined with the difference between $14 million and $11 million, and Metrotek will be making an astonishing $3.9 million for a 28% profit margin.
But wait, it gets better. Our terrific state government has the wherewithal to reward Metrotek's greed and gift them an $800,000 plus grant for the project, all of which you can see is pure profit, pushing the profit margin on the project to 33%, all of which will be enjoyed by the company as soon as the system is operational (revenue during operation would pay back the $14 million loan, Metrotek sees virtually all of the profit when the project is completed), while tens of thousands of taxpayers and the school district have to wait 20
years to POTENTIALLY save $2 million. Additionally, the above cost estimates use solar panel prices that are about $1.70 a watt, but the they're falling so rapidly (http://www.renewableenergyworld.com/rea/blog/post/2011/01/some-changes-ahead-in-2011) that Metrotek's profit margin could be in the 40 to 50% range by the time installation gets underway.
It appears Metrotek has offered the school a starting power rate of 8 cents a kilowatt hour, increasing to 20 cents a kilowatt over the 20 year term, yet I haven't seen a single conclusive piece of analysis out of Metrotek that shows that power will cost more than 20 cents in 20 years. Its more than possible that the increasing flood of renewable and alternative power systems being connected to the grid in combination with energy efficiency advances will result in slower increases in the cost of power over the next 20 years, meaning... here's the
best part... the school district could potentially lose money on the deal. Realistically, Metrotek has reduced the savings the district will enjoy to next to nothing, allowing Metrotek to take all of the financial benefits from the project the day it is completed.
Isn't it Metrotek's responsibility to ensure that the school district
doesn't lose money on the agreement and ensure that the system continues to operate properly over the next 20 years? No, Metrotek has specifically avoided accountability on the project by creating a limited liability company. Metrotek formed what appears to be a wholly owned subsidiary, Energy Alliance Group LLC, which ultimately executed the agreements with the Northampton School District. This means that should the system suffer a catastrophic failure,stops making money and / or paying back the loans, or results in a significant insurance claim, Metrotek has no responsibility to keep the system running
or even have to remove it from the land at the end of the 20 year term if they so choose. If you got all of your money the day the project is completed how concerned would you be about maintaining it for the next 20 years?
I have seen power rates of 4.5 to 9 cents a kilowatt hour over the life of agreements offered by competing solar providers for other school districts in the state, and its clear from the financial analysis that Metrotek could have offered a similar, competitive rate to the school district had they not been selfishly obsessed with maximizing their profit margins.
Maybe even more surprising than the level of profit Metrotek will be
enjoying is the level of experience Metrotek has in renewable energy and power purchase agreements. Browsing records from Pennsylvania and New Jersey, In October 2010, Metrotek completed its first and only major solar energy project, a private 600kw solar array, and appears to have no other projects under construction. Not only that, that have ZERO experience working with power purchase agreements, essentially using the Northampton Area School District as their guinea pig for trying to break into the industry. Metrotek and their subsidiary Energy Alliance Group appear to be completely owned by Reiner Jaeckle and Eric Abeshaus, two individuals of questionable backgrounds. Abeshaus alone
has been under federal investigation several times for bribing various
school officials through his former company Circle Systems and is currently facing civil litigation as a result of the allegations. Metrotek also claims to have been in business since 1975, but state incorporation records show the company was formed in 2005. But my favorite part so far though is that I cannot find one
licensed electrical engineer that works for Metrotek or Energy Alliance,
including the owners, yet they want to design, build and maintain
multi-million dollar electrical systems that will surround our children. Records do show that Jaeckle is a licensed electrical contractor in New Jersey, but not in Pennsylvania.
Northampton's decision to use Metrotek is the result of failing to complete even minimal due diligence. The school district did not even evaluate one other solar provider and got locked into a letter of intent with Metrotek, and is now suffering the consequences. Even one other bid on this project would have forced Metrotek to improve the financials in order to compete and would have resulted in millions in additional savings for the residents of Lehigh and Moore Townships.
I have no problem with private enterprises profiting from the public sector, but this is not capitalism, this is corruption, fraud and profiteering. For an example of solar projects being done right, look no further than the Bethlehem Area School District, and I would recommend talking to them to learn about how they approached their successful solar power purchase agreement projects. Additionally, there are many far more experienced and less expensive solar providers that I am sure would be more than willing to provide an evaluation
without a letter of intent, for instance:
Vanguard Energy Partners - 908-534-1302
Kenyon Energy 904-777-0833
PennWind and PASolar - 570-286-4030
Reading Electric - 610-929-5777
I invite you to forward this message to other school districts that may be considering solar energy or reproduce this message as needed to spread the message about these unfortunate business practices.
Saturday, January 29, 2011
Tuesday, January 25, 2011
LEHIGH ELEMENTARY SOLAR PROJECT-THE MATH THE NEWSPAPERS WON'T REPORT
If you have been following the Northampton Area School District/ Metrotek proposed solar power plant story in the Morning Call, Northampton Press or Bath Home News, you probably are wondering, why are the residents of Lehigh Township so darn upset and against this great deal for their school district? You are not going to get the full story from the newspapers, I can assure you of that. The reports only go to the meetings and report what they like, they interview Metrotek, Bob Yanders and the School board constantly, getting their propaganda. They have never bothered to look into the facts, which are readily available in the PPA (Power Purchase Agreement), the application from Metrotek/ Dave Gogel to the township, the new application, etc. All the math is there, all the facts are there. Well, we have gone over these papers an here is how it works out.
The school will receive from metrotek, a discount on their energy bill that adds up to $2 million over 20 years, that's roughly $100,000 a year, given to the school in the form of a 2 cents discount per kwh. At a fairly recent school board meeting, the board stated there were approximately 40,000 school taxed properties, so.. that's the saving, per property owner in the NASD- $2.50 A YEAR! If you own a home, that a $50 saving over 20 YEARS!!! If you don't own a home- NOTHING!
Now, it gets better- What will Metrotek receive?? Already, they got a grant of $860,000 from our state, who took the money from the federal government. Where did that money come from? It came from borrowing from China and from the FED printing the money, so basically your Federal tax dollars, which you will have to pay out one day (or your kids or grandkids).
What else does Metrotek get? Well, they get SRECs (Solar Renewable Energy Credits). Those come from the government and they will get them annually, for 20 years. With the total 2.2 megawatt system, Metrotek is slated to receive over $1.3 MILLION THE FIRST YEAR ALONE! And every year after that, MORE if the rate goes up!!! So, if the rate doesn't go up and stays the same, Metrotek will make $26.4 MILLION DOLLARS over the 20 year period! Where is the press on this??
Further, METROTEK isn't GIVING the electricity away either, they are keeping the lions share and selling the electricity to the school at a discount of 2 cents a kwh off the going rate. At the last Township meeting, Eric Abeshaus (Energy Alliance) and Bob Yanders (Northampton Schools) mentioned the recent Lehigh Elementary electric bill as being $20,000. Using an average 3.5 cents a kwh rate with the electric and transmission charges combined, the school will still have an electric bill of about 35%-40% of it's current rate. So, instead of a $20,000 a month bill, they will have an $8,000 a month bill? What is Metrotek making on the electricity for the school that they sell to PP&L? That's still an average of $96,000 a year electric bill for the school, while Metrotek is making $1.3 million of our tax money plus selling the electricity to PP&L, all while using our property for free?? No one would ever sign on to a reckless plan like that, would they?
In the end, one final question the reporters have never asked- how long does it take for the solar power plant to generate enough energy to cover the energy it took to produce it? You have the massive solar cells, the forest of metal poles, the computer and flat screen TV, the wiring, the electric high tension cables, the inductors, the converter, transformer, the 6.5 acre chain link fence, the cameras, relays, etc, etc?? From what I can find out 20-50 years! All of these things took vast amounts of energy in a factory furnace to produce, so no carbon footprint savings there. ALSO- PP&L MUST INSTALL RAPID-TURN-ON, NATURAL GAS-FIRED TURBINES OF EQUIVALENT POWER GENERATION CAPACITY TO ENABLE THE SYSTEM TO RAPIDLY REACT TO THE SUN BEING COVERED BY CLOUDS OR NIGHT-TIME, SO....YES, YOU GUESSED IT, NO CARBON FOOTPRINT REDUCTION THERE. Just a giant ponzi scheme to steal money from the American tax payer and add to the growing $14 TRILLION dollar debt.
Can we get a reporter to actually do some work in the Lehigh Valley???.......
The school will receive from metrotek, a discount on their energy bill that adds up to $2 million over 20 years, that's roughly $100,000 a year, given to the school in the form of a 2 cents discount per kwh. At a fairly recent school board meeting, the board stated there were approximately 40,000 school taxed properties, so.. that's the saving, per property owner in the NASD- $2.50 A YEAR! If you own a home, that a $50 saving over 20 YEARS!!! If you don't own a home- NOTHING!
Now, it gets better- What will Metrotek receive?? Already, they got a grant of $860,000 from our state, who took the money from the federal government. Where did that money come from? It came from borrowing from China and from the FED printing the money, so basically your Federal tax dollars, which you will have to pay out one day (or your kids or grandkids).
What else does Metrotek get? Well, they get SRECs (Solar Renewable Energy Credits). Those come from the government and they will get them annually, for 20 years. With the total 2.2 megawatt system, Metrotek is slated to receive over $1.3 MILLION THE FIRST YEAR ALONE! And every year after that, MORE if the rate goes up!!! So, if the rate doesn't go up and stays the same, Metrotek will make $26.4 MILLION DOLLARS over the 20 year period! Where is the press on this??
Further, METROTEK isn't GIVING the electricity away either, they are keeping the lions share and selling the electricity to the school at a discount of 2 cents a kwh off the going rate. At the last Township meeting, Eric Abeshaus (Energy Alliance) and Bob Yanders (Northampton Schools) mentioned the recent Lehigh Elementary electric bill as being $20,000. Using an average 3.5 cents a kwh rate with the electric and transmission charges combined, the school will still have an electric bill of about 35%-40% of it's current rate. So, instead of a $20,000 a month bill, they will have an $8,000 a month bill? What is Metrotek making on the electricity for the school that they sell to PP&L? That's still an average of $96,000 a year electric bill for the school, while Metrotek is making $1.3 million of our tax money plus selling the electricity to PP&L, all while using our property for free?? No one would ever sign on to a reckless plan like that, would they?
In the end, one final question the reporters have never asked- how long does it take for the solar power plant to generate enough energy to cover the energy it took to produce it? You have the massive solar cells, the forest of metal poles, the computer and flat screen TV, the wiring, the electric high tension cables, the inductors, the converter, transformer, the 6.5 acre chain link fence, the cameras, relays, etc, etc?? From what I can find out 20-50 years! All of these things took vast amounts of energy in a factory furnace to produce, so no carbon footprint savings there. ALSO- PP&L MUST INSTALL RAPID-TURN-ON, NATURAL GAS-FIRED TURBINES OF EQUIVALENT POWER GENERATION CAPACITY TO ENABLE THE SYSTEM TO RAPIDLY REACT TO THE SUN BEING COVERED BY CLOUDS OR NIGHT-TIME, SO....YES, YOU GUESSED IT, NO CARBON FOOTPRINT REDUCTION THERE. Just a giant ponzi scheme to steal money from the American tax payer and add to the growing $14 TRILLION dollar debt.
Can we get a reporter to actually do some work in the Lehigh Valley???.......
Tuesday, December 14, 2010
NASD-SHIP OF FOOLS, CAPTAINED BY JANE "WHO DO THE PEOPLE THINK THEY ARE!" ERDO
Sorry for the delay, it's the Christmas season and solar power plants and school boards are low on my priority list. Anyway, some interesting info to report. December 5th's meeting of the Northampton Area School Board was another exercise in really bad government. Talk about a freak show experience, this is like a side-show carnival. One wonders how most of the board members were ever elected to a position of trust and authority. A couple striking things were evident during this meeting. First, school board member Jane Erdo exudes a contempt for the public I have never seen in a politician before. Not only is she disrespectful and rude, she is a downright confrontational and attacks the public. All during the meeting, as in previous meetings, she threatens the entire audience with shutting down their right to speak. When they do speak, she is combative, nasty and childish. I have rarely seen such an ugly personality, but having one administering what they think is best, to our students, is down right scary.
During the meeting, Erdo complained about people mentioning the solar power plant project. She stated it's a done deal and a closed issue. At the public comment period, at the end of the meeting, she decided to hide in the bathroom like a spoiled child holding their ears. When she finally emerged, it was just in time to rudely belittle a 13 year old student who had just lost her mother. To think that someone like this, holds your children's education in their hands, is disturbing. Further, to see an elected official who doesn't want to hear from the people, who she is representing, begs the question, what is her agenda?
Secondly, the other school board members seem terrified of her and she appears to run the whole meeting, pulling the puppet string of the board president Dave Gogel, who appears to be a ventriloquist dummy sitting on her lap. I would have to say, she exercises more power than he does, oft times admonishing him as to what to do.
One small bright spot in the meeting was school board member Darin Arthofer, who dared to question the intent of the contract for the solar power plant. He was immediately jumped upon by Erdo who turned her full hormone raged fury against him. To his credit, he did not back down under her onslaught and has asked for documents pertaining to this issue, which Gogel and the superintendent said he will receive. Erdo suggested the discussion of this go on in "executive session", which means -behind closed doors, like everything else the board does. I guess she doesn't want the rabble to see them squabbling, but perhaps the hold she has over them is breaking.
Another gem that was gleaned from the meeting was the fact that the school board solicitor and the board members stated they did not know who Eric Abeshaus was. No wonder he never had a background check. If only they had read the contract they signed, they would see, on page 29, it was signed between school board president David Gogel and Eric Abeshaus, CEO of the shell company "Energy Alliance Group (Northampton) LLC" on June 17th. Funny they never looked into the company that was started less than a month earlier and has the same address and phone number of the electrical company reaping the rewards of this project- MetroTek. So, are they just really incompetent and are they not telling the truth? Abeshaus was seen exiting a board room with the school board members, the superintendent and Reiner Jaeckle a few minutes before the start of the Nov 8th School board meeting, but vanished before the meeting started, most likely not wanting to be seen by the media.
At the conclusion we learned Metrotek is redesigning the plans for the solar power plant and the board has promised to review them first and then open them up to the public for comment before they go any further. I wonder if they will stick to their word..........to be continued.
During the meeting, Erdo complained about people mentioning the solar power plant project. She stated it's a done deal and a closed issue. At the public comment period, at the end of the meeting, she decided to hide in the bathroom like a spoiled child holding their ears. When she finally emerged, it was just in time to rudely belittle a 13 year old student who had just lost her mother. To think that someone like this, holds your children's education in their hands, is disturbing. Further, to see an elected official who doesn't want to hear from the people, who she is representing, begs the question, what is her agenda?
Secondly, the other school board members seem terrified of her and she appears to run the whole meeting, pulling the puppet string of the board president Dave Gogel, who appears to be a ventriloquist dummy sitting on her lap. I would have to say, she exercises more power than he does, oft times admonishing him as to what to do.
One small bright spot in the meeting was school board member Darin Arthofer, who dared to question the intent of the contract for the solar power plant. He was immediately jumped upon by Erdo who turned her full hormone raged fury against him. To his credit, he did not back down under her onslaught and has asked for documents pertaining to this issue, which Gogel and the superintendent said he will receive. Erdo suggested the discussion of this go on in "executive session", which means -behind closed doors, like everything else the board does. I guess she doesn't want the rabble to see them squabbling, but perhaps the hold she has over them is breaking.
Another gem that was gleaned from the meeting was the fact that the school board solicitor and the board members stated they did not know who Eric Abeshaus was. No wonder he never had a background check. If only they had read the contract they signed, they would see, on page 29, it was signed between school board president David Gogel and Eric Abeshaus, CEO of the shell company "Energy Alliance Group (Northampton) LLC" on June 17th. Funny they never looked into the company that was started less than a month earlier and has the same address and phone number of the electrical company reaping the rewards of this project- MetroTek. So, are they just really incompetent and are they not telling the truth? Abeshaus was seen exiting a board room with the school board members, the superintendent and Reiner Jaeckle a few minutes before the start of the Nov 8th School board meeting, but vanished before the meeting started, most likely not wanting to be seen by the media.
At the conclusion we learned Metrotek is redesigning the plans for the solar power plant and the board has promised to review them first and then open them up to the public for comment before they go any further. I wonder if they will stick to their word..........to be continued.
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