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Marblehead Municipal Light Department general manager Jonathan Blair updated commissioners on a proposed five-megawatt battery storage system and received informal board approval to proceed with signing an energy storage service agreement at the board’s Jan. 27 meeting.
Board chair Jean-Jacques Yarmoff said Blair could sign the agreement if no commissioners raised concerns by the following Monday. Blair said he would return to the board before signing two additional required agreements.
“I feel comfortable signing this once I get concurrence, either formally through a vote or just in a, you know, an expression in this meeting,” Blair said.
The proposed battery would be developed by LightShift Energy under a 20-year revenue-sharing agreement. Blair said the agreement would split revenue roughly 50-50 between the developer and the department.
Blair projected total value of approximately $1 million annually, yielding about $500,000 in savings for ratepayers.
“We really have no upfront capital costs, no O and M throughout the lifespan and no end of life obligation to restore the site,” Blair said. “It’s all on them.”
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The energy storage service agreement would not become effective until all local permitting is approved, site control is established and the interconnection agreement is signed, Blair said. He said those subsequent steps would provide additional checkpoints for board oversight.
“That’s really the control that the board can maintain over this process, those two subsequent checkpoints that will then feed into this first,” Blair said.
Blair said construction costs are estimated at roughly $1 million per megawatt for a total project cost around $5 million. The developer would also handle ongoing operations, maintenance and eventual decommissioning.
Blair said the developer would fund a decommissioning account progressively over the first 10 years of the contract, reaching approximately $145,000 by year 10.
Yarmoff proposed that board members review the energy storage service agreement during the week and contact Blair with any concerns.
“If by this weekend there is no particular red flashing light, I think, having read this document, which seems fine, and if I have some more concerns, I will, I will read them to you, John, I would propose that we affirm that John can go ahead and sign as he sees fit,” Yarmoff said.
Blair said the contractual requirement would be one year from the effective date of the agreement for the battery to be operational.
“So I would say, pencil in June of 2027,” Blair said.
The board voted unanimously to elect Yarmoff as primary representative to the Massachusetts Municipal Wholesale Electric Company, with Blair, Simon Freshett, Adam Smith, Harrington and Mike Horne designated as backups in that order.
Yarmoff said he believed it was important for commissioners to participate in MMWEC governance alongside general managers.
“I personally feel that it would be of interest to have a commissioner represent one of the systems,” Yarmoff said. “I would volunteer for that if everybody thought it was appropriate.”
Blair said MMWEC membership meetings are usually quarterly and may include voting elements in one or two meetings per year.
“I would hope that in most systems, certainly in Marblehead, I would hope and believe that we would be in alignment,” Blair said.
Blair provided an update on ISO New England’s capacity market reforms. He said the reforms would move to a prompt auction instead of a three-year forward market, shift to seasonal rather than annual auctions and implement accreditation reforms.
“Moving to a prom seasonal structure is going to be we think, better for consumers overall,” Blair said. “Again, it’s a more efficient market. It’s more dialed in, and so you’re going to have less free riders, you’re going to have more accurate pricing.”
Blair said the changes are expected to take effect in June 2028. He said plants like Wilkins that have oil-burning or dual-fuel capability are expected to benefit, particularly as winter peak demand receives more emphasis.
Blair reported the Wilkins plant experienced a coolant leak during a 10-hour dispatch on Jan. 25 that required shutting down and taking a weeklong outage for repairs.
“We had to opt out of our dispatch and ended up taking a week long outage this week to try to repair, restore and get back in starting first of February,” Blair said.
Blair said work on the Village 13 substation upgrade has experienced delays. He said the project is expected to be back online with two transformers in the March or April timeframe.
“We’re probably in the May, early June,” Blair said of the overall completion timeline.
The board also reviewed a draft policy for voluntary payments in lieu of taxes to the town. Yarmoff said the proposal would calculate annual transfers at $3.60 per megawatt-hour of electricity sales, with a floor of $360,000.
“By law, we cannot bake it into the rates,” Yarmoff said. “If the surplus exists, that is it. If it does not exist, then MMLD may have to adapt.”
Yarmoff said the department paid the town $360,000 this year, up from $330,000 transferred annually from 2020 through 2024.
The board’s next meeting will be a strategic planning workshop on Feb. 10 at 4 p.m., followed by the regular board meeting on Feb. 24.
