By Steve Landwehr
IPSWICH — When a partnership between the schools and the Light Department was first proposed to construct a wind turbine on Town Farm Road, it appeared the benefit would be a no-interest loan for a portion of the cost that was only available to the district.
Appearances, as they say, can be deceptive, but this might be a case of all's well that ends better.
As originally conceived, the School Department would have obtained a $1.6 million interest-free Clean Renewable Energy Bond. The federally subsidized program was supposed to provide lenders with a tax credit in exchange for not collecting interest from the borrower.
The Light Department will finance the other $2.6 million of the project.
But Utilities Director Tim Henry said that when lenders were actually being sought, banks had begun charging interest, which is currently around 3 percent.
On the other hand, a standard municipal bond can be obtained for 3.5 percent interest, so what first looked like a deal-breaker didn't seem quite so bad.
"The project as a whole is still a moneymaker," Henry said.
While the new plan will be discussed at a meeting of the selectmen and school and finance committees next Tuesday, schools Superintendent Rick Korb said the change of course would actually improve cash flow for the schools.
That's because the CREBs program required the schools to obtain a loan by Dec. 31, and also to make a first principal payment by the end of the year.
The first payment on a general obligation bond wouldn't be due until the end of 2011.
That first payment is projected to be about $166,000, Korb said, and a $10,000 payment for operation and maintenance of the turbine would be due at the same time.
The School Department's 39 percent share of the project will generate $200,000 in savings on the district's electric bill to offset those expenses, Korb estimated, leaving $24,000 in new revenue.
The other 61 percent of the turbine's output will offset the kilowatt hours the town buys from the electric grid.
"This project is still a profitable project," Henry said.
