Standard Financial Offer

Funding and Services to Support the Development of Wind Power on Municipal Sites

Summary
The Standard Financial Offer (“SFO”) is a package of funding and services offered to qualified Massachusetts municipalities committed to developing a 500 kW+ wind project on municipal land.

The Standard Financial Offer
The Standard Financial Offer consists of two major elements:

  • Development Support Grant: MTC will provide a grant of up to $150,000, or the equivalent in services, to the municipality to support development of the project. The Development Support Grant could be used to evaluate offers from developers, to resolve project-specific issues if the municipality intends to own the project, and/or to develop project-specific information in an effort to secure a developer.  Separate from the development support grant, MTC may provide in-kind assistance with RFP development.  
  • REC Purchase Offer: Beginning on December 12, 2006, MTC has a standing offer to buy renewable energy certificates (RECs) from any 500 kW to 5 MW wind generating project constructed on land owned by a qualified Massachusetts municipality or municipal entity at a standard price of $40/MWh. The nominal value of the REC contract will be based on the nameplate capacity of the project, as follows:
    • $1.2 million/MW for projects up to 3 MW, plus
    • an additional $400,000/MW for additional capacity up to 5 MW.

REC purchase contracts are capped at $4.4 million per project.  MTC will revisit the level and terms of the REC Purchase offer periodically and may at that time modify and/or re-issue the offer. The REC purchase award shall be deemed to be made to the municipality, for its benefit. However, MTC will contract with either the municipality or a development partner, depending on the project structure. The REC contract term and annual percentage of RECs to be purchased by MTC will be proposed to MTC by the municipality and any development partner. 

Eligible Applicants/Projects

  • Open to Massachusetts municipalities whose residents pay into the Renewable Energy Trust.
  • The municipality must have formally decided (e.g. through vote of the Board of Selectmen or City Council, Town Meeting, or act of the Mayor) to proceed with a wind project of at least 500 kW on a specific municipal site, and must have the written approval of any municipal agency controlling or using the site.  The decision to proceed may be subject to selection of an acceptable project developer/owner, Town Meeting approval, or other such ratification process.
  • The municipality must have obtained not later than the application date any required legislative approval for ownership or development of the project (e.g. for municipal ownership or development on “Article 97” land).
  • The municipality must provide a Community Wind Collaborative Feasibility Study, or study of similar scope acceptable to MTC, to demonstrate that the project is feasible.
  • The municipality must have a reasonable business plan and budget for the project.
  • The municipality may not receive funding for the project under any other MTC initiative.

Available Funding
All MTC awards pursuant to this Notice are subject to the availability of funds, approval by the MTC Board of Directors.  All MTC awards pursuant to this Notice are subject to terms and conditions as described in the Standard Financial Offer application forms and related materials as may be modified or amended from time to time, including but not limited to the REC purchase contract.  MTC reserves the right to terminate this offer in its discretion for reasons including but not limited to lack of funding.

Application Process
The SFO Application Process has two phases.  In Phase 1, a qualified Massachusetts municipality submits an application requesting that it be awarded the Standard Financial Offer.  (See:  Application for SFO Phase 1 – Request for Award; 2007-CWC-01a.)  If the application is approved, MTC will reserve $150,000 for development support awards to the municipality.  MTC will also issue an award letter and reserve funds to cover a future REC Purchase contract. 

After the SFO is approved, MTC anticipates that municipalities will issue an RFP either for a development partner or for a turnkey contractor, and will undertake a final analysis of project economics based on this information. The municipality and its partner(s) will then be ready to enter into the REC purchase contract with MTC. Municipalities will have one year from the original SFO award date to complete the developer and/or contractor selection process and submit a Phase 2 application.

In Phase 2, a municipality that has received an MTC REC purchase award proceeds to finalize the REC purchase contract. At this stage, the municipality knows the location and exact size of the project and must have identified the contracting party—that is, the party that will own the RECs from the project and will sell them to MTC. The municipality and the contracting party (if different) then submit a Phase 2 application, which provides the information that MTC will need to complete a REC Purchase contract.  (See: Application for SFO Phase 2 – REC Contract Details; 2007-CWC-01b.  Also see the Notice of REC Contract Terms and Availability; 2007-CWC-01.)

The municipality or project developer will have 18 months from the date that MTC approves a Phase 2 Application to complete development of the project.

To Apply

  • Complete and submit the application form, Phase 1 – Request for Award, found here.
  • MTC will review complete and conforming applications on a rolling basis as they are submitted.
  • MTC reserves the right to make partial awards, at $40/MWh, if there is uncertainty about the final size of the project, or if budgetary constraints so dictate.
  • MTC expects that it will typically take up to four months to evaluate and make a determination on a complete and conforming Phase 1 application.

FOR MORE INFORMATION

CONTACT: Nils Bolgen
PHONE: 508-870-0312, ext 1-402
EMAIL: bolgen@masstech.org