CENTRE COUNTY — A solar power project that once promised Centre County governments millions in savings is now projected to cost them money, deepening a split among local officials over whether to continue negotiations or abandon the deal altogether.
At a meeting of the Centre County Solar Group held Dec. 3, consultant Gregg Shively told members that developer Prospect14 has asked to amend the three-year-old Solar Power Purchase Agreement, increasing both the price per kilowatt-hour and the annual price escalator.
Shively said Prospect14 wants to increase the base rate from $0.04459 per kilowatt-hour to $0.05755 and raise the annual escalator from 1.5 percent to 2.5 percent.
“That shift would eliminate expected cost savings and create an estimated net settlement cost of approximately $650,000 over the 15-year term,” Shively said, explaining that the revised economics are based on current wholesale power price forecasts and the volume of electricity the governments agreed to buy.
The group was presented with three options: accept the revised offer, terminate the deal or continue negotiations under the existing contract. Shively said he has been pressing the developer to stay closer to the original economics.
“I don’t think there’s any more room to negotiate price,” he said. “I have tried ten different ways to Sunday to try to get them to explore lower prices. I’ve told them we need to be in the lower 50s in order for our value proposition to be maintained in the current market.”
Shively said the developer’s request appears tied to its target investment returns and ability to secure financing. “They could put their money and their time and effort in various projects and certain projects, if they get too disinterested in them, they would move to other projects,” he said.
He also framed the situation as a choice between upfront savings and protection from volatile energy markets. “There’s an objective that speaks to mitigating exposure to budget volatility and price increases inherent in electric markets. That’s one of the core objectives. And this project would accomplish that.”
Dr. Peter Buck, a longtime member of the CCSG working group, warned that rising demand — particularly from data centers — could sharply increase electricity prices in the next decade.
“Estimates place data centers consuming 7 to 12% of electricity in the United States by 2028,” Buck said at the meeting. “This is the largest impact on electrification itself. They estimate an increase of 14 to 19% electricity increase by 2030. Next quarter, First Energy business customers, including West Penn Power will see a 6.5% to 13.13.8% increase in prices.”
“Data centers are devouring power,” Buck said in a follow-up email to The Centre County Gazette after the meeting. “Last year they consumed just over 3% of all electricity in Pennsylvania. By 2030, conservative estimates place consumption at about 10%.” He added that private technology companies could secure exclusive power agreements, pushing everyone else into a more expensive market. “All those factors place families, small and mid-size business, and governments in a bad position because we don’t have bottomless pocketbooks.”
Buck said any decision on the SPPA must balance costs, energy stability and emissions goals. “We have to consider cost savings, price stability and greenhouse gas emissions reductions together,” he said. He emphasized that continued negotiations will depend on transparency from the developer. “We just need to see their math. It’s that simple. As you heard, there is a significant trust gap now. If we don’t get what we have asked for, all options are on the table.”
Not all officials support continuing discussions. State College Borough Council member and CCSG representative Josh Portney said the governments should walk away.
“The legal fees ballooned from the originally approved $165K for legal fees to $288,345.50,” Portney said in a follow-up email to The Centre County Gazette after the meeting. CCSG was promised a $60,000 reimbursement from Prospect14 if the contract moved forward, but he said that payment has not come through. “The developer said that contingent upon the execution of the contracts, we would get $12,500 back; and then $47,500 back if the project gets up and running. But the contracts have been executed and still the $12,500 has not been paid.”
“In order to potentially retrieve that $60K, we must enter the PPA with updated prices, which is set to cost the entities a collective $650,000 more than if we stayed on our current electric grids,” he said. “It is not worth it. The PPA’s slated savings have disappeared and we should not be chasing this bad deal anymore.”
Portney said he believes the developer has not acted in good faith. “There have been red flags after red flags from the start,” he said. “We must ensure that all of our contractors and vendors are operating in good faith, but this seems to not have been the case. I believe an independent review of this process is due. This must never happen again.”
Portney wants to pursue solar independently rather than through a private developer. “We must get out and pursue building solar on our own facilities like the County Government and the Recycling/Refuse plant did,” he said.
In response, State College Area School District finance director Randy Brown said the contract remains active and the CCSG is following the procedures allowed under it.
“There is a provision in the Solar Power Purchasing Agreement (SPPAWG) related to what happens if Prospect14 is unable to obtain financing,” Brown wrote in email to The Centre County Gazette. “The SPPAWG has the option to consider re-negotiation under that provision. Since signing the SPPA Agreement, the participating entities now operate under the Centre County Solar Group (CCSG).”
“The CCSG directed its consultant to respond to the developer, asking for additional information to prove all requirements for re-negotiation have been met as well as an amended offer,” Brown said.
Brown confirmed that each entity would be responsible for its own legal costs. Still, he said the district hopes the project remains viable. “Our goal has been to purchase solar power at a reduced cost. This is beneficial to our community financially and aligns with our commitment to sustainability. Our hope is that this goal is still attainable and we can provide long-term value for our district and serve as a model for future community partnerships.”
Meanwhile, former Centre Region Council of Governments chair and Halfmoon Township Supervisor Ron Servello said he has emailed the Pennsylvania Attorney General to investigate the SPPA process, alleging legal fees were incurred without authorization and claiming transparency issues regarding the developer.
“I believe that these entities violated the law with regard to the legal fees expended… as well as the lack of transparency regarding the identity of the provider,” Servello wrote in an email to Attorney General David Sunday, which was forwarded to The Centre County Gazette. He said he has “documentary evidence” and urged investigators to obtain records before “they are destroyed” in that email.
An email request to Sunday’s office for comment was not returned.
Centre County Commissioners responded to the recent SPPAWG meeting on Tuesday.
“Centre County government entered into this intergovernmental agreement with I believe it’s now nine other partners,” Commissioner Mark Higgins said. “So, by being part of a bigger group, we were negotiating for better pricing and that’s been our goal the entire time, is to save money on the county’s electric bill.”
“We have negotiated in good faith,” Commissioner Steven Dershem said. “We entered into this concept with our fellow municipalities with the understanding that we would be buying a fixed price source of electricity for what, 15 years? My personal feeling here is though, a deal’s a deal. I would hope that they would honor those prices with the contract that we signed.”
“I’d also emphasize we do have a contract in place,” Commissioner Amber Concepcion said. “Our goal throughout this process has been both to save money on our energy bills as well as to reduce some of the volatility that you could see year over year with increasing energy prices and to have some predictability.”
CCSG’s consultant is expected to return with additional information from Prospect14. Until then, members remain split between three options: renegotiate, withdraw or explore legal remedies.
