⚡ 40 MILLBURY RD

MEMORANDUM

TO: Sunland America Corp. Development Committee

FROM: Senior BESS Site Evaluation Analyst

DATE: October 26, 2023

SUBJECT: Comprehensive Site Diligence Analysis for 40 Millbury Rd, Oxford, MA (APN: 16_D03)

This report provides a comprehensive due diligence analysis for the potential development of a distribution-scale (≤5MW) Battery Energy Storage System (BESS) at the subject property. The analysis identifies significant regulatory and financial challenges that present a high-risk profile for this site.

1. Site Access & Topography

Road Access: The property is located at 40 Millbury Road. Initial desktop review suggests Millbury Road is a local, two-lane paved road. The quality and load-bearing capacity of this road are unknown and require verification. A key concern is whether the road can support the weight and turning radius of heavy-haul trucks carrying multi-ton battery containers, switchgear, and the main power transformer.

Terrain & Feasibility: Located in Worcester County, the terrain is likely to be characteristic of central Massachusetts: rolling hills with potential for significant tree cover and rocky soil. The "Forest Land" land use code supports this assumption. A full geotechnical survey will be essential to determine soil stability, the extent of rock ledge requiring blasting (a significant cost adder), and grading requirements. The 12.58-acre parcel size is ample, but the actual buildable area could be severely restricted by topography.

Equipment Access: Access for heavy equipment is a major unknown. We must confirm that low-clearance bridges, tight turns, or local road weight restrictions do not impede delivery from major highways (I-395, I-90). A route survey is a mandatory next step.

Easements: Requires Verification. A title search is required to identify any existing access, utility, or conservation easements that could encumber the property and restrict the placement of the BESS facility or the interconnection line route.

2. Environmental Constraints

FEMA Flood Zone: Requires Verification. The FEMA flood zone designation is unknown. This is a critical data gap. If any portion of the potential project area falls within a 100-year floodplain (Zone A/AE), it will necessitate elevating all critical equipment above the Base Flood Elevation (BFE), significantly increasing civil engineering and construction costs. Siting within a floodway would likely be prohibitive.

Wetlands: Requires Verification. The presence of wetlands is unknown and represents one of the most significant risks to the project. Massachusetts has stringent wetland protection regulations (Massachusetts Wetlands Protection Act). Any identified wetlands will require significant setbacks (typically a 100-foot buffer zone), which could render a large portion of the 12.58-acre parcel unbuildable. A formal wetland delineation by a certified professional is a non-negotiable, immediate diligence item.

Habitat & Species: The data indicates no critical habitat or protected areas on site, which is a positive finding. However, this should be confirmed via the Massachusetts Natural Heritage & Endangered Species Program (NHESP) database during formal permitting.

Brownfield/Superfund: The site is not a brownfield. While this avoids potential environmental liability and remediation costs, it also means the project is ineligible for the 10% IRA brownfield tax credit adder, a notable disadvantage to project economics.

Pipeline Proximity: The absence of major gas pipelines within a three-mile radius is a significant safety and permitting advantage, reducing complexity and potential public opposition.

3. Grid Infrastructure & Interconnection

Substation & POI: The nearest substation is North Oxford, located 1.5 miles from the site. Its maximum voltage of 115 kV indicates it is a transmission-connected substation, but it almost certainly steps down to serve local distribution circuits. This distance is workable but will incur substantial line extension costs.

Interconnection Voltage & Feeder: For a ≤5MW BESS, a transmission-level (115 kV) interconnection is financially unviable. The target Point of Interconnection (POI) must be a distribution feeder, likely at 13.8 kV, originating from the North Oxford substation. The configuration (e.g., overhead vs. underground, three-phase availability) and, most importantly, the hosting capacity of the nearest feeder are critical unknowns.

Cost & Timeline: A 1.5-mile overhead distribution line extension in New England can be estimated to cost between $1.5M - $3.0M, subject to terrain, road crossings, and utility requirements. The interconnection process in Massachusetts, governed by ISO-New England (ISO-NE) and the local utility (likely National Grid or Eversource - Requires Verification), is notoriously slow and complex. A realistic timeline from application submission to commercial operation is 30-48 months, driven by study queues and utility construction schedules.

Transmission Proximity: A 345 kV transmission line is 0.9 miles away. While too high a voltage for our target project size, its proximity could offer future opportunities for a much larger utility-scale project, though this is outside our current scope.

4. Regulatory & Zoning Analysis

Authority Having Jurisdiction (AHJ): The Town of Oxford, MA.

Zoning Compatibility: The parcel is zoned R-1 (Residential) and designated as "Private Preserve, Open Space-Vacant Land." This is a major red flag. BESS is an industrial/utility use and is fundamentally incompatible with residential zoning. It is highly unlikely to be a by-right use.

Permitting Pathway: The only viable, albeit high-risk, pathway would be to seek a Use Variance or a Special Permit from the Oxford Zoning Board of Appeals. This process is discretionary, time-consuming (9-18 months), expensive (requiring extensive legal and engineering support), and subject to significant public opposition from neighboring residential properties. The probability of success is low.

Setbacks & Restrictions: Specific BESS setbacks are likely not codified in Oxford's bylaws. They would be negotiated during the special permit/variance process and would likely be substantial (e.g., 200-500 feet from property lines) due to the residential context. There is also a risk that the AHJ could impose a moratorium on BESS development while they create specific regulations, stalling the project indefinitely.

5. IRA/ITC Incentive Analysis

This site has a critically weak profile for IRA tax credit adders, which severely impacts financial viability.

• Opportunity Zone: No. (0% adder)
• Energy Community (Coal Closure / Statistical Area): No. (0% adder)
• Low-Income Community: No. (0% adder)
• Brownfield Adder: No (as noted above). (0% adder)

Potential Cumulative ITC: The project will only be eligible for the base 30% ITC, assuming prevailing wage and apprenticeship requirements are met. The lack of any 10% adders makes this project significantly less competitive than sites that qualify for 40% or 50% ITC.

6. BESS Score & Rationale

Overall BESS Suitability Score: 38 / 100

• Location (8/20): Central MA is a decent power market, but the specific parcel's residential adjacency is poor.
• Grid Access (15/25): Proximity to a substation is good, but the 1.5-mile distance creates significant cost and timeline risk. Feeder capacity is a major unknown.
• Environmental (5/15): The unknown status of wetlands is a massive risk that could sterilize the site. No other major flags is the only saving grace.
• Regulatory (2/15): R-1 zoning is a potential fatal flaw. The permitting path is uncertain, costly, and has a high probability of failure.
• Incentives (3/15): Ineligibility for any IRA adders deals a severe blow to project economics, making it difficult to compete.
• Buildability (5/10): Unknowns regarding topography, road access, and geotechnical conditions make construction risk very high.

7. Key Risks & Mitigants

1. Risk: Permitting Failure. The R-1 zoning presents a high likelihood of the project being denied by the Town of Oxford.
   • Mitigant: Engage local zoning counsel immediately. Schedule a pre-application, informal meeting with the Oxford Planning Department to gauge their initial reaction before investing significant capital.
2. Risk: Poor Project Economics. The combination of high interconnection costs and a complete lack of