A proposal to install a natural-gas-powered generator to supply electricity to Riverhead Town Hall drew interest from Town Board members Thursday, but the town procurement director said the project should be reviewed through a competitive process before the town considers moving forward.
The proposal, presented at the Town Board’s June 4 work session by Walt Jordan of dGEN Energy Partners, calls for installation of one 250-kilowatt Mainspring linear generator at Town Hall, 4 W. Second St. The generator would run primarily on natural gas and supply electricity to Town Hall and potentially nearby town-controlled electric accounts, with PSEG Long Island remaining available as backup.
Council Member Ken Rothwell brought the proposal to the board, saying he had been looking for ways to reduce town operating costs.
“One of the things that obviously I think many of the board members have been looking for is to trying to find ways — our ultimate goal is to save taxpayer money — to whatever we can do to lessen our budget each year and pass those savings on to each and every one of our taxpayers,” Rothwell said.
Rothwell said he’s been working with Jordan for several months and said the proposal could reduce electric costs at Town Hall and possibly other town facilities, including the town-owned ice rink at Veterans Memorial Park.
“If we reduce our electric costs, then we pass that savings on to each and every one of our taxpayers,” Rothwell said.
Jordan, chief revenue officer at dGEN Energy Partners, described the Mainspring unit as a “linear generator,” a system that produces electricity through back-and-forth motion rather than a rotating engine shaft. He contrasted it with a conventional diesel backup generator, saying the Mainspring system has fewer moving parts, lower noise and lower emissions.
“Take what you know, what you think of when you think of a diesel generator, a backup generator, you got one sitting right on the other side of that wall over there, and throw all that in the trash,” Jordan told the board. “Forget it. Lot of moving parts, lot of emissions, lot of noise, the black smoke that comes out of them. This is not that.”
Jordan said the unit can run continuously, rather than serving only as a standby generator.
“This generator runs full time,” Jordan said. “This is on 24/7.”
The proposal presented to the board projected that one 250-kilowatt generator at Town Hall would produce 882,570 kilowatt-hours annually. The presentation said the combined monthly average utility spend for Town Hall and the adjacent M&T Bank building, which the town owns and leases, is $18,019.15, and projected that the average monthly utility spend would fall to $4,237.74 after installation of the generator.
See presentation slide deck below.
The presentation listed the total project cost at $1.31 million, with a projected $393,000 federal direct-pay incentive, $153,951.12 in annual net utility savings, a six-year payback period and an internal rate of return of 20.3%.
“Internal rate of return” is a financial measure used to estimate the annualized return a project would generate from future savings compared with its upfront cost.
Jordan said the projections were based on the town’s actual electric bills, not hypothetical figures.
Supervisor Jerry Halpin asked whether the figures were hypothetical or based on actual bills.
“Those are based on your actual bills, yes, sir,” Jordan said.
“When we did math, we did work with the town engineer’s department,” Rothwell said. “We did present them copies of our electric bills, because I said to them I wanted real numbers, not hypothetical.”
Town Engineer Ken Testa said the town’s electric bills for Town Hall and the adjacent M&T Bank building, which average about $18,000 per month, climb into the $20,000-per-month range in the summer because of air conditioning and drop to about $12,000 or $13,000 in the winter.
Jordan said the Town Hall site is well-suited for the project because of the existing gas and electric infrastructure.
“It sets up perfectly,” Jordan said. “You’ve got a very large gas line that comes into the building. I would neck that down to connect to my machine. The service, the electrical service for the facility, is right there on the corner, so it would lay in there perfectly.”
The presentation did not address Town Hall’s current natural-gas consumption or costs, or what equipment in the building currently uses natural gas.
Jordan said the new generator could be placed near the town’s existing diesel backup generator. The diesel generator would then become the town’s third line of defense, he said, behind the Mainspring unit and PSEG service.
Asked by Rothwell whether the town would be “completely removed” from the PSEG grid, Jordan said, “In theory, yes,” but said PSEG would remain as “your redundant backup.”
Rothwell said the generator would become the town’s primary source of electricity for Town Hall, with PSEG as backup.
The generator could also produce excess power that could be credited to other town electric accounts through net metering, Jordan said. Council Member Denise Merrifield asked whether that could include the police department.
“Yeah, absolutely,” Jordan said.
Testa said the town would need to understand how that arrangement would work with PSEG.
“If you can get an agreement with PSEG for net metering, I don’t know that usually that’s all through RFPs and stuff, but if it’s a net metering arrangement, then you can produce power here and offset it to highway like we do with solar,” Testa said.
Testa also flagged an existing town solar project as a factor that would need review before any generator proposal moves forward.
“One other consideration we’re going to have to make is what arrangements we have with CVE solar, and make sure that we don’t have — we have a solar project on a landfill,” Testa said.
Testa said some of the landfill solar power is expected to offset town electric bills. The solar project is expected to begin operating this summer, he said.
The Town Hall proposal was not the only site discussed. Jordan’s presentation also included a possible generator installation at Veterans Memorial Park, where the town-owned Peconic ice rink is located. That proposal projected one 250-kilowatt generator producing 1,414,740 kilowatt-hours annually, with annual net utility savings of $204,806 and a 4.5-year payback period.
The Veterans Memorial Park proposal is more complicated because natural gas is not currently available at the site. Jordan said he had received a rough estimate from National Grid of about $800,000 to extend gas service roughly 4,100 feet to the site.
Rothwell said the town could potentially speak with nearby property owners, including Calverton National Cemetery, about whether they might benefit from an extension of natural gas service, though he said those discussions had not taken place.
“I have not spoken to, like, our biggest neighbor there is Calverton National Cemetery across the street,” Rothwell said.
Rothwell said the ice rink’s electric costs have been a point of criticism from some residents and said the generator proposal could be part of a broader effort to reduce the town’s operating costs while maintaining services.
“The long-term goal would be to remove us from having to cover those long-term electric costs up there,” Rothwell said.
Jordan said the Town Hall installation itself could be completed in a few days once approvals, interconnection, fabrication and delivery are complete. He estimated the full process could take about 10 or 11 months.
“If we started today,” Jordan said, the unit could potentially be installed by October or November and commissioned by the first of the year, though he said he preferred to be conservative about timing.
The discussion shifted near the end of the presentation to how the town would legally procure the system.
Mainspring Energy submitted an undated letter addressed to town Purchasing Director Teresa Baldinucci seeking a single-source procurement determination for its linear generator systems. The letter states that Mainspring is the designer, manufacturer and sole-source producer of its proprietary linear generator technology. It also states that dGEN Energy Partners is an authorized reseller for Mainspring products and that the Riverhead project has been specifically registered through dGEN within Mainspring’s internal project registration system.
The letter says no other reseller, integrator or channel partner is authorized by Mainspring to execute the Riverhead project as registered.
Halpin asked whether the town should issue a request for proposals.
“One of the things that was attached to us was the — you said it was sole source and proprietary — and so I wasn’t sure, do we need to RFP this to make sure there’s — I mean, I understand you’re saying this is our technology, this is our alone, just doing right,” Halpin said. “I just want to have that conversation.”
Jordan said Mainspring had submitted the single-source letter and said there is “nobody else with this technology.”
But Baldinucci said she had not seen the single-source letter before the meeting agenda was released and said she believed the town should do due diligence through a competitive process.
“Prior to seeing the agenda for today’s meeting, I had not even seen your letter or heard of you or anything, so I was a little surprised by that,” Baldinucci said.
Baldinucci said that even if the Mainspring product is proprietary, other companies and other technologies may exist.
“I think for the point of the state comptroller’s office, that we need to do a due diligence and put an RFP out,” Baldinucci said. She said the town could state its objective and allow companies to make presentations, “and then reviewing all of them.”
Testa agreed that other technologies may be able to accomplish the same goal.
“Wouldn’t a fuel cell be a competing product to do the same kind of thing, generate electricity with no emissions, and use natural gas?” Testa asked.
Jordan said other technologies exist but argued they do not offer the same performance guarantees, useful life or savings.
“There are other technologies out there that are very different from this one,” Jordan said. “However, they don’t have the performance guarantees, they don’t have the shelf life.”
Council Member Bob Kern said an RFP would address the question of comparative savings.
“What about from a savings standpoint, just to address the concerns up here?” Kern asked.
“What an RFP would probably tell you,” Testa said.
Rothwell said he believed the Mainspring product appeared superior but said there was nothing wrong with proving that through further review.
“Sounds like you’re far superior than other potential products are out there,” Rothwell said. “But there’s nothing wrong with proving that.”
The board took no action on the proposal Thursday. Rothwell said the town would continue discussions and work with Baldinucci on the procurement process.
“We’ll talk with Teresa and talk about RFPs, whatever is necessary to take the pathway,” Rothwell said. “But I think it’s a great potential.”
Rothwell said the town should continue exploring alternative energy sources for Town Hall and other town properties.
“The ultimate goal is to save the taxpayer money,” Rothwell said. “And so we got to start opening up the doors.”
Correction: This article has been amended to correct an error in the spelling of Purchasing Director Teresa Baldinucci’s surname.
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