County on hook for $24 million
By Nathan Mayberg
NEWTON — Sussex County has a $24 million hole it will have to fill after the lights went out on its 2011 solar power project.
The county issued $27.7 million of debt in order for New York City-based SunLight General Capital in 2011 to install solar panels on municipal buildings and schools throughout the county. The deal was part of a larger project supported by two other counties: Morris and Somerset. The total cost for the three counties was estimated at nearly $90 million after the firm was the lone bidder on the project.
The plan was for the counties to act as a bank and loan the money to the New York City company to invest in the infrastructure.
There was only one problem with the plan: the county didn't have a fallback option if somehow the company went insolvent and couldn't pay back the money.
That is what has now happened, Sussex County Administrator John Eskilson said.
Eskilson was county administrator when the Sussex County Board of Freeholders voted unanimously to approve the $27.7 million bonding. SunLight General only paid back $2.7 million of that.
Now the county has to pay back the $24 million part of the deal which SunLight General Capital never paid back and now can't.
SunLight General Capital has been in ongoing litigation with PowerPartners MasTec, the construction firm hired to install the solar panels on the buildings.
The contractor sued to hold the solar power investment company accountable for tens of millions of dollars it said was owed to them. SunLight General Capital has tens of millions of dollars in liens against the company.
Eskilson said the firm is "insolvent but not bankrupt."
Still, Eskilson said the company will not be able to pay the county any more money. They haven't paid the county any money since 2013.
The county has to make $2.7 million bond payments each year out of a budget of $100 million. The county had been counting on SunLight to make those payments but will now have to find other sources. Eskilson declined on Tuesday to speculate where that money will come from.
Among the muncipal buildings which had solar panels installed as part of the project were Sussex County Community College, which estimated that it would save an average of $20,000 to $30,000 annually on its electricity costs as a result of the panels.
Eskilson said the Board of Freeholders will discuss a settlement on Thursday with the companies. One option is to have the contractor complete the second half of its solar panel project, which could potentially bring the county an additional $1 million of revenue, Eskilson said. Space was a member of the Republican-dominated Board of Freeholders when they voted unanimously to approve the bonding.
Eskilson said the situation is not what was imagined back in 2011 when the county intended to save municipalities and taxpayers money by investing in renewable energy. On Wednesday, Sussex County Freeholder Gail Pheobus (R-Andover) and Assemblyman Parker Space (R-Wantage) called for the U.S. Securities and Exchange Commission, Department of Justice and state Attorney General's Office to investigate SunLight General Capital and expressed concern about the "lack of transparency on the matter."
Reporter Nathan Mayberg can be reached at comm.reporter@strausnews.com or by calling 845-469-9000 ext. 359