⚡ 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 a potential distribution-scale BESS project at 40 Millbury Road in Oxford, Worcester County, Massachusetts. The analysis covers key development pillars including site characteristics, environmental constraints, grid interconnection, regulatory hurdles, and financial incentives. The final recommendation is a NO GO for this site based on a confluence of fatal flaws, primarily related to zoning and grid interconnection feasibility.

1. Site Access & Topography

The 12.58-acre parcel has direct frontage on Millbury Road, a two-lane, paved local road. Initial site visits and light construction vehicle access appear feasible without significant off-site improvements. However, the delivery of heavy equipment, such as a main power transformer (MPT) or 5 MWh+ battery container enclosures, may require a detailed swept path analysis and potential temporary road reinforcement or widening at the site entrance.

Based on aerial imagery and regional topography, the site is characterized as undeveloped forest land, likely with moderate elevation changes and mixed tree cover. A formal topographical survey and geotechnical investigation are mandatory to determine final grading requirements, foundation design, and the precise location of the BESS pad. The "Forest Land" and "Private Preserve" designation suggests the terrain could be challenging, with potential for rock outcroppings or unsuitable soils. While the overall acreage is sufficient for a ≤5MW project, the actual buildable area is unknown and could be severely limited. No access easements appear necessary given the direct road frontage, but an internal access road will need to be constructed from Millbury Road to the project pad, the cost of which will be dictated by topography and environmental setbacks.

2. Environmental Constraints

This site presents significant, unquantified environmental risks. The "Unknown" status for FEMA flood zones and wetlands is a major diligence gap. Given the site's undeveloped, forested nature in this region of Massachusetts, the presence of state- and federally-jurisdictional wetlands is highly probable. Development will be subject to the stringent Massachusetts Wetlands Protection Act (WPA) and potentially local Oxford conservation bylaws, which mandate significant setbacks (typically 100 feet or more) from wetland resources, severely restricting the buildable envelope.

• FEMA Flood Zone: Requires Verification. Any designation other than Zone X would introduce significant design complexity, raise construction costs, and potentially render the site un-developable.
• Wetlands: Requires Verification. This is the highest environmental risk. A formal wetlands delineation is required immediately. The presence of vernal pools would add further restrictions.
• Critical Habitat/Species: The data indicates no critical habitat, which is a positive screening result. However, a state-level review (e.g., MA Natural Heritage & Endangered Species Program) is still a required step during permitting.
• Brownfield/Superfund: The absence of brownfield status is a double-edged sword. It indicates a lower risk of soil contamination and remediation costs, but it also means the project is ineligible for the 10% IRA Brownfield ITC adder, a significant economic disadvantage.
• Pipeline Proximity: No pipelines within three miles is a strong positive, eliminating a common safety and setback concern.

3. Grid Infrastructure & Interconnection

The grid infrastructure in the immediate vicinity is poorly suited for a cost-effective distribution-scale project. The nearest substation, NORTH OXFORD, is 1.5 miles away. This distance is generally cost-prohibitive for a dedicated distribution feeder extension for a ≤5MW project, with costs easily exceeding $1.5M - $3M for the line build alone.

Furthermore, the substation's 115 kV voltage class indicates it is a transmission or sub-transmission asset. Interconnecting a small 5 MW BESS at 115 kV is technically possible but financially non-viable due to the extreme cost of high-voltage switchgear, protection, and substation bay work. The nearby 345 kV transmission line is not a feasible Point of Interconnection (POI) for a project of this scale.

The only viable path would be to interconnect to a local distribution feeder (likely 13.8 kV) from the interconnecting utility, which is National Grid. The primary unknown is the location, capacity, and three-phase status of the nearest distribution feeder along Millbury Road. If a suitable feeder with available capacity runs adjacent to the site, the project might be feasible, but the 1.5-mile distance to the substation suggests the local feeders may be rural, capacity-constrained, and require extensive, costly upgrades. The ISO-New England (ISO-NE) interconnection process, managed through National Grid, is notoriously slow and complex, with queue times often exceeding 24-36 months for study and approval.

4. Regulatory & Zoning Analysis

The regulatory and zoning profile of this site represents a near-fatal flaw. The Authority Having Jurisdiction (AHJ) is the Town of Oxford. The parcel is zoned R-1 (Residential) and carries land use designations of "Private Preserve" and "Open Space-Vacant Land."

A Battery Energy Storage System is an industrial use and is fundamentally incompatible with R-1 zoning. It is virtually certain that BESS is not a permitted use by-right. The permitting pathway would be exceptionally difficult, requiring one of the following, with a low probability of success:

• Special Use Permit (SUP) / Special Exception: This is the most likely, yet still challenging, path. It would require a public hearing process before the Oxford Planning Board or Zoning Board of Appeals and be subject to intense public scrutiny and opposition from neighboring residential properties.
• Variance: A use variance would be required, which has a very high legal bar to clear, demanding proof of unique hardship related to the land itself.
• Rezoning: A petition to rezone the parcel from residential to industrial or a special energy overlay district would be a lengthy, political, and highly uncertain process.

The "Private Preserve" designation may also imply additional deed restrictions or conservation easements that could prohibit development entirely. We must assume significant local opposition and a high risk of denial by the AHJ. There are no known state-level regulations in Massachusetts that would preempt local zoning authority for a project of this nature.

5. IRA/ITC Incentive Analysis

The project's financial viability is severely hampered by its ineligibility for any of the 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)

As a result, the project would only qualify for the 30% base ITC (assuming prevailing wage and apprenticeship requirements are met). This places it at a significant competitive disadvantage compared to projects sited in locations that can stack these adders for a total ITC of 40%, 50%, or even higher. This lack of incentive upside makes the high development costs and risks associated with this site even more untenable.

Potential Cumulative ITC Adder: 0%