Beaver Wood Pownal 248 Filing: No. 8M - Pre-Filed Testimony of Ted Verrill SD

8/8/2019 Beaver Wood Pownal 248 Filing: No. 8M - Pre-Filed Testimony of Ted Verrill SD

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S T A T E O F V E R M O N TP U B L IC S E R V IC E B O A R D

Pe tit io n o f B ea ve r Wood Energy Pownal, LLC )fo r a C er tif ica te o f P ub li c Good, pur su an t to 30 )V.S.A. § 248, to install and operate a Biomass )E n er gy Faci lit y and an integrated w o od pellet

Docket Noanufa ctu ri ng fac ili ty lo ca te d north o f the old )Green M ou nta in R ace tr ack in Pownal, V e rm o n t )to be k no w n as the “P o w n al Biomass Project”

P R E -F IL E D T E S T IM O N Y O FT E D W R IG h T V E R R IL L

O N B E H AL F OFB E A V E R W O O D E N E R G Y PO W N A L , L L C

O ctob er 25, 2010

T he pur pose o f the p re -f il ed t es ti m on y o f Mr. V erri ll is to support Petitioner’s request tocommence lim ited co nstr uc tio n activities in December, 2 01 0

(



TA B LE O F CO NT E NT S

1. In tro du ct io n Intr o duc tion

2. P rojec t F inan ce 2

3. Se c tion 1 603 G ra nt 3

C o ncl u sio n 4

P eti tio n er’ s Ex h ib i t T V-I R es um e of Te d V enill



ST A T E O F VE R M O N TPU B L IC S E R V IC E BO A RD

Petition o f Be av er Wood E ner g y Pownal, LLC )for a Cer tifica te o f P ubl ic Good, pursuant to 30 )V. S.A. § 248, to ins tall a nd operate a Biomass )Energy F acili ty and an integ rated wood pellet

Docket Nomanufactur ing facil i ty lo cate d north o f the old )Green Mo u nta in R acet ra ck in Pownal, Ven n on t , )to be known as th e “P ow n al Biomass Project” )

P R E -F IL E D T E S T IM O N Y O FTE D W R IG H T V E R R IL L

ON BE H A L F OFB E A V E R W O O D E N E R G Y P O W N A L, LIJC

1 1. In tro d u c tion .

2 QI - Please stat e y our na m e, business address and employment.

3 A l- I ant T ed W righ t V e n il l. I am a Managing Di r ecto r o f Bea ve r Wood Energy,

4 LLC and B ea ve r W o od E n ergy Pownal, [ I C (coll ectiv ely, “BWE”) resp o nsib le for

5 marke ting, fin anc e and tax matters. My home address is 75 Sasco River Lane, Southport,

6 Connecticut. M y o ffi ce add re ss is 230 We st Street, Rutland, Ve rmont 05701.

7 Q2: Could yo u p le as e sum m ar iz e your p rof essi o nal ed u catio n and experience?

8 A2: hi add it io n to m y re spo n sib ilitie s with B W E , I am a M an aging D ire ctor o f New

9 England A lte rn ati ve E n er gy LLC, which has be en org anize d to develop various

10 alternative en e rg y pr oj ec ts across New England and the sole member o f Naugatuck

11 Ene rgy De v elo p me n t L LC , wh ic h, throu gh affiliates, has dev e lope d or is dev e lopi ng

12 several el ec th ca l ge ne ra ti o n p roje c ts in C on n ectic ut . T h rou g ho u t my 35 year career in

( 13 finance,I

h av e fin an ced , lea se d and pu rch a sed on b e h a lf o f m y employers/clients, a



Pownal Biom ass Project, PSB D o ck et No.

_ _ _ _ _

Prefiled Te st im on y o f Ted VerrillOctober 2 5, 2 0 10

( P ag e 2 o f4

Ivar ie ty o f tang ib le assets, in cl ud in g co m m erc ia l aircraft, ro ll in g stock, v ess el s,

2 com m uni catio n satellites and various types o f projects. T h es e projects have included the

3 pr od ucti on o f en erg y from natural gas, coal, oil, nuclear, solar, wind and geothermaL I

4 ha ve a BA from Bowdoin College, an MBA in Fi na nc e from the U ni ve rs ity o f Arizona

5 and a ID from Fo rd ha m U nive rs ity School o f Law/University o f Maine School o f Law.

6 1 ant a ret ire d m em ber o f th e Bar in N ew York and Connecticut. My cur re n tresume is

7 at tached as Petitioner’s E xhi bi t T V -i .

8 Q3. What is the p ur po se of your tes tim o ny ?

9 A3. The p u rpo se o f m y te st im on y is to support BWE’s requ est for pe rm is si on to start

10 ce rt ain lim it ed construction ac ti vi tie s p rio r to the end o f 2010 in orde r to qualify for

LI cer ta in federal tax grants.

1 2 Q4. Have yo u testified prev iously befor e the Board?

13 A4. No.

14 2. P ro je c t F in an ce .

15 Q: Could you prov ide a b ri e f sum m ary o f the capital s tm ct u re and fin an c ing

16 req u ire m en ts fo r the Pownal B io m as s P ro jec t (the “Project”)?

17 A: The total cost o f the P ro jec t w ill be a pp ro xi m ate ly $250 million. BWE intends to

IS se cu re term debt fin an ci ng equ al to ap pro x im a te ly sixty percent o f total P ro je ct cost, or

19 51 50 m ill io n , and equity fin an ci ng eq ua l to approximately forty p er ce nt o f total Project

20 cost, or $100 million. The eq u it y f in anc in g is exp ec te d to con sis t o f inv es tm en ts by

21 B W E principals, BWE joi nt dev elo pm en t p art ne r, Bechtel D e ve lo p m ent Company, other

22 dom est ic and fo re ig n i nvesto rs , tax in v estor s and a federal cas h grant aw ar de d pursuant to



Pownal Biomass Project, P5 8 Docket No.Pretuled Testimony o f Ted Verrill

October 25, 2010( P ag e 3o f4

ISe ct io n 1603 o f the A merican Rec ov e ry and R einv estm ent Act of 2009 (the “Recovery

2 Act”) equal to 30 percent of the cost basis of the quali fi ed pr o per ty of the Projec t (the

3 “S ecti on 1603 Grant”) which in this cas e should am o un t to at least twe nty-one percent of

4 total Project cost, or $52.5 million.

5 3. Se ct ion 1603 G ran t.

6 Q: Co uld you please de scri be the importance of th e S ection 1603 Grant to the Project

7 as well as the steps req u ired to q ualif y for the S ectio n 1603 Grant.

S A: The R eco ve ry Act pro vide s certain incen tive s to prom ote the construction and

9 co m ple tion o f facilities that produce ele ctr ic ity fro m ren e w ab l e energy resources , such as

10 th e Project. S ecti on 1603 o f the Recovery Act pr o vid es a mea ns for developers o f

11 e ligib le renew able energy projec ts to m one tiz e th e ap p lic ab le investment tax credits that

12 would othe rw is e be available. A more de taile d exp la na tio n of the R ecovery Act is set

13 forth in the M o tion for P relim ina ry Approval. As expla in ed in the Motion, the Section

14 1603 Grant will only be ava ila bl e to the Proj ect if cons tr uct io n of the Project begins

15 be fo re the end of D ece m be r, 2010. For BWE to sa tis fy this beginning o f construction

16 requirement, it ne eds to un dert ak e p hy s ica l work of a s ign ifica n t nature on the Project at

17 the Project site. BWE, w ith Board perm iss io n, hop es to undertak e certain construction

18 activi ties a t th e P roje c t si te in 20 1 0 in or de r to qu al ify for the Section 1603 Grant. Those

19 limited construction acti vi tie s are desc ribe d in the pre -f ile d testimony of William

20 Bousquet. T he se ac tiv it ies w er e carefUlly ch osen to m in im iz e any environmental impacts

2t a tth e site .



Pownal Biomass Project, PSB Docket No.Prefiled Testimony o f Ted Verrill

October 25, 2010( P age4 of4

If E W E is unable to secure the Section 1603 Grant, it will significantly

2 co m pl ica te th e Project’s fin anci n g because in order to fill the $52.5 million dollar gap in

3 the Pr o ject ’s capital re quir em e nts, 8V E will likely h ave to id en ti fy a pa r tne r that can

4 ma k e u se o f the long ter m inve s tm e nt tax credits tha t would be av ailable in lieu o f

5 S ecti o n 1603 Grant (ple ase re fe r to the Motion for an explanation o f the relationsh ip

6 b e tw e enthe Sec tion 1603 Grant and inv estm en t tax credi t av aila ble to the Project). The

7 1603 Grant pr o gr a m was created be c aus e of th e collapse o f the tax eq u ity market during

8 the recession. In the c u rre n t economy, with the tax eq uity m ar k et rem aini ng ve ry weak,

9 se lling th e se tax c redi ts for a pric e app r oac h ing S52.5 million will be ex ceed ingl y

10 di fficu lt and could se rio us ly jeo pa rd iz e SW E’ s ab ilit y to succ e ssf u lly finance and thus

11 co m plete the Pro je ct

12 4. C onc lusio n.

13 Q6. Does th is c o nc lu de y o ur te stim on y on th is issue?

14 A6. Ye s.

15

16 \G:\Usas\J4ans\Beaver Wood Energy, LLC’Act 248 Pownafltax credi t\Ve rriII pre-filed flnal.doc



( STATE OF VERMONT

PUBLIC SERVICE BOARD

Petition ofBeaver Wood Energy Pownal, LLCfor a Certificate of Public Good, pursuant to 30V.S.A. 248, to install and operate a Biomass )Energy Facility and an integrated wood pellet

D k Nmanufacturing facility located north of the old )CC et 0.

Green Mountain Racetrack in Pownal, Vermont, )to be known as the “Pownal Biomass Project”

PREFILED TESTIMONY OF

TED WRIGHT VERRILL

(Exh ibit BW EP -T V - 1

Resumé

Beaver Wood Pownal 248 Filing: No. 8M - Pre-Filed Testimony of Ted Verrill SD

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Transcript of Beaver Wood Pownal 248 Filing: No. 8M - Pre-Filed Testimony of Ted Verrill SD