⚡ 40 MILLBURY RD

MEMORANDUM

TO: Sunland America Corp. Development Team
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 or utility-scale Battery Energy Storage System (BESS) at the subject property. The analysis concludes that the site presents numerous significant, and likely fatal, flaws related to zoning, site access, and financial incentives. The final recommendation is NO GO.

1. Site Access & Topography

Road Access & Equipment Delivery: The property has frontage on Millbury Road, a two-lane local road. While sufficient for initial passenger vehicle access, its suitability for heavy haul trucks carrying transformers, switchgear, and battery containers is questionable and would require a detailed transportation study. More critically, initial desktop review using aerial imagery suggests the parcel is heavily wooded and lacks any existing improved access road from Millbury Road. A new, permanent access road would need to be constructed from the public right-of-way into the site.

Terrain & Buildability: The site is located in central Massachusetts, a region characterized by rolling hills and rocky soil. The parcel appears to be entirely forested with significant topographic variation. Substantial tree clearing, grading, and earthwork would be required to create a level pad for a BESS facility, driving up construction costs and timelines. The presence of bedrock near the surface is a distinct possibility and would require geotechnical investigation.

Heavy Equipment Access: Gaining access for heavy equipment presents a major challenge. The construction of a new access road capable of supporting crane and tractor-trailer loads will be a significant project in itself. The road's grade and turning radii must be carefully engineered. This is a major buildability risk.

Easement Concerns: A title search is immediately required to confirm the property has legal, deeded access to Millbury Road. Given the undeveloped nature of the parcel, it is possible that access is constrained or non-existent. If a suitable access point cannot be established on the property's own frontage, an access easement would need to be negotiated and purchased from an adjacent landowner, adding significant cost, complexity, and risk to the project schedule.

2. Environmental Constraints

FEMA Flood Zone: The FEMA flood zone designation is currently Unknown. A desktop review of FEMA maps is a critical next step. However, given the site's apparent hilly topography, it is likely located in Zone X (minimal flood risk), which would be favorable. This requires verification.

Wetlands: The presence of wetlands is Unknown. Forested, undeveloped parcels in New England frequently contain jurisdictional wetlands, vernal pools, and streams. The Massachusetts Wetlands Protection Act imposes strict regulations and often requires significant buffers (e.g., 100-foot buffer zones) that would reduce the buildable area. A formal wetlands delineation by a certified professional is a mandatory and immediate due diligence item.

Critical Habitat / Endangered Species: The initial screening shows no designated critical habitat on the parcel, which is a positive finding. However, a more detailed desktop review of state (MA Natural Heritage & Endangered Species Program) and federal databases is necessary to screen for any state-listed species whose habitat may be present.

Brownfield/Superfund Status: The site has no known Brownfield or Superfund history. While this eliminates environmental liability risk, it is a financial disadvantage. The project is not eligible for the 10% IRA Brownfield tax credit adder, making it less competitive than a comparable redeveloped site.

Pipeline Proximity: No gas transmission pipelines are located within three miles of the site, which is a positive safety attribute and removes a common siting constraint.

3. Grid Infrastructure & Interconnection

Nearest Substation & Transmission: The nearest substation is National Grid’s NORTH OXFORD substation, located approximately 1.5 miles from the site. This substation has a maximum voltage of 115 kV, indicating it is a transmission-level facility with likely robust capacity. A 345 kV transmission line is also present 0.9 miles away, but this is not a viable Point of Interconnection (POI) for a project of this scale (≤5MW).

Recommended Interconnection: The most probable interconnection path is a new 1.5-mile tap line to the 115 kV system at the NORTH OXFORD substation. This would be a transmission-level interconnection, governed by ISO-New England (ISO-NE) and National Grid's transmission planning processes. The possibility of a closer, lower-voltage distribution feeder (e.g., 13.2 kV) should be investigated, but none are identified in the preliminary data.

Estimated Cost & Timeline: A 1.5-mile, 115 kV overhead line extension is a significant infrastructure project. A high-level cost estimate would be in the range of $2.5M - $5.0M, including line construction, substation upgrades (breaker, relays, etc.), and utility overheads. The interconnection process through ISO-NE is notoriously long and complex. The timeline from application submission to commercial operation could easily exceed 36-48 months, which is a major risk for an early-stage developer.

Utility & Feeder Configuration: The interconnecting utility would be National Grid. The likely interconnection would be a direct tap to a 115 kV transmission line, not a connection to a radial distribution feeder. This increases study complexity and the potential for costly network upgrade requirements.

4. Regulatory & Zoning Analysis

Authority Having Jurisdiction (AHJ): The Town of Oxford, MA, is the primary AHJ for zoning and permitting.

Zoning Compatibility: The parcel is zoned R-1 (Residential) and designated as "Private Preserve, Open Space-Vacant Land." This zoning is fundamentally incompatible with a BESS, which is an industrial utility use. This represents a potential fatal flaw for the project.

Permitting Pathway: Development is not possible by-right. The only potential pathways are a use variance or a zoning bylaw amendment. A use variance requires proving a unique hardship and is extremely difficult to obtain in Massachusetts. A zoning amendment is a political process requiring Town Meeting approval and is highly uncertain. A Special Permit is not a likely option as the underlying use is not permitted. This regulatory hurdle is exceptionally high.

Setbacks & Restrictions: Specific BESS setbacks are likely not defined in Oxford's code. However, any approval would certainly come with extensive conditions, including large setbacks from residential property lines (potentially >200 feet), noise limitations (requiring acoustic studies and mitigation), and extensive landscaping/screening requirements. There is a high risk that the Town of Oxford could enact a BESS moratorium if a project were proposed, halting development while they write new regulations.

5. IRA/ITC Incentive Analysis

The project's financial viability is significantly hampered by its ineligibility for key Investment Tax Credit (ITC) adders under the Inflation Reduction Act (IRA).

• Opportunity Zone: No. (0% adder)
• Energy Community: No. (0% adder)
• Low-Income Community: No. (0% adder)

Potential Cumulative ITC Adder: 0%. The project would only be eligible for the 30% base ITC. This places it at a severe competitive disadvantage compared to projects that can stack adders to achieve a 40% or 50% ITC, which directly impacts investor returns and offtake pricing.

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