⚡ 424 HARTFORD TPKE

MEMORANDUM

TO: Sunland America Corp. Development Committee

FROM: Senior BESS Site Evaluation Analyst

DATE: October 26, 2023

SUBJECT: Comprehensive Site Diligence Analysis for "Project Shrewsbury" (424 Hartford Tpke, Shrewsbury, MA)

This report provides a comprehensive due diligence analysis for the potential acquisition and development of a distribution-scale Battery Energy Storage System (BESS) project at 424 Hartford Turnpike in Shrewsbury, Worcester County, Massachusetts. The analysis covers key development pillars including site characteristics, environmental constraints, grid interconnection, regulatory landscape, and financial incentives.

1. Site Access & Topography

The subject property is located directly on the Hartford Turnpike (Massachusetts Route 20), a major state highway and commercial corridor. This provides exceptional, high-quality road access suitable for all phases of construction and operation.

• Equipment Delivery: Access from a major state highway is ideal for the delivery of heavy and oversized equipment, including battery containers (megapacks), medium-voltage transformers, and switchgear. No significant road upgrades are anticipated to be required for transport.
• Terrain Characteristics: The parcel's current zoning (Commercial - Retail) and location within a developed commercial area strongly suggest that the site is relatively flat, graded, and cleared. This is a significant advantage, likely reducing civil engineering and site preparation costs. Requires Verification: A formal topographic survey is required to confirm grade and identify any minor undulations.
• Heavy Equipment Access: Given the direct frontage on Route 20, access for heavy cranes required for setting transformers and other equipment is considered excellent. The 3.02-acre parcel size should provide sufficient laydown and staging area, though a preliminary site plan is needed to confirm this.
• Easement Concerns: As an existing commercial parcel, there are likely existing utility easements (power, water, sewer) along the road frontage. Requires Verification: A title search and ALTA survey are necessary to identify all existing easements and determine if they conflict with the proposed BESS layout. No access easements are anticipated to be required, as the property has direct public road frontage.

2. Environmental Constraints

The environmental profile presents several critical data gaps that must be addressed immediately. While some initial screenings are positive, key potential "fatal flaws" remain unverified.

• FEMA Flood Zone: The FEMA flood zone designation is currently Unknown. This is a high-priority risk. If the site is located within a Special Flood Hazard Area (e.g., Zone A, AE), development costs could increase substantially due to requirements for elevating equipment, or the site could be rendered undevelopable. Action Item: Immediately review FEMA Flood Insurance Rate Maps (FIRMs) for this parcel.
• Wetlands: The presence of wetlands is Unknown. Massachusetts has stringent wetland protection laws (Massachusetts Wetlands Protection Act) with significant buffer zone requirements (typically 100 feet). The presence of regulated wetlands could severely constrain the buildable area on a 3-acre parcel. Action Item: Commission a desktop wetland screening using MassGIS OLIVER data, to be followed by a formal field wetland delineation by a certified professional.
• Critical Habitat / Species: The data indicates no critical habitat or protected areas on site, which is a positive initial finding. This reduces the risk of lengthy and complex consultations with USFWS or MA Natural Heritage & Endangered Species Program (NHESP). This should be confirmed via official database checks.
• Brownfield/Superfund Status: The site is not a listed brownfield or superfund site. While this avoids potential environmental liability and cleanup costs, it also means the project is ineligible for the 10% IRA Brownfield tax credit adder, a notable financial disadvantage.
• Pipeline Proximity: No major gas pipelines are located within three miles. This is a significant safety and layout advantage, eliminating concerns related to pipeline setbacks and explosion risk assessments.

3. Grid Infrastructure & Interconnection

The site's proximity to robust grid infrastructure is its single greatest asset. This location is exceptionally well-suited for a grid-tied BESS project from a physical standpoint.

• Nearest Substation: The NORTH GRAFTON substation is only 0.8 miles from the site. This is an ideal distance, minimizing the cost and complexity of the feeder line extension. The provided voltage data (-999999 kV) is an error. Requires Verification: Research indicates this is a National Grid substation; we must confirm its distribution voltage classes (likely 13.8kV or 23kV) and initial available capacity.
• Transmission Proximity: A 115kV transmission line operated by Fitchburg Gas and Electric (a Unitil subsidiary, though likely a National Grid asset in this territory) is located just 0.4 miles away. This provides a secondary, albeit more expensive and complex, interconnection option if the distribution system is saturated.
• Recommended Interconnection: For a ≤5MW BESS, the clear primary target is a distribution-level interconnection at the local voltage (e.g., 13.8kV) to the NORTH GRAFTON substation. This pathway is significantly cheaper and faster than a transmission-level tap.
• Cost & Timeline Estimate: For a sub-one-mile distribution tie-in, interconnection costs could range from $750,000 to $2,000,000, highly dependent on utility upgrade requirements. Requires Verification: A formal interconnection application is the only way to determine actual costs. The ISO-NE queue, managed by utilities like National Grid, is notoriously congested. A realistic timeline from application to commercial operation can be 24-48 months.
• Utility & Feeder: The interconnecting utility is almost certainly National Grid. The specific feeder and its current load profile are critical unknowns. A pre-application will help determine if the feeder has capacity or if it will trigger costly substation upgrades.

4. Regulatory & Zoning Analysis

The regulatory environment in Shrewsbury appears surprisingly favorable, which significantly de-risks the permitting process.

• Authority Having Jurisdiction (AHJ): The Town of Shrewsbury is the primary AHJ. Permitting will likely involve the Planning Board and Conservation Commission.
• Zoning Compatibility: The current zoning is Commercial Business (COM-BUS). While BESS is not a traditional commercial use, a review of Shrewsbury's bylaws reveals a specific and progressive ordinance: Section VI. T. Battery Energy Storage Systems. This is a major advantage.
• Permitting Pathway: The existence of a dedicated BESS bylaw indicates a clear permitting path. The bylaw states that BESS facilities require a Special Permit from the Planning Board. This is a far more predictable and favorable process than seeking a use variance.
• Setback Requirements: The Shrewsbury bylaw specifies setbacks, including a minimum of 50 feet from any property line and 100 feet from any residential dwelling. These requirements must be incorporated into a preliminary site plan to confirm a 5MW system can fit on the 3.02-acre parcel.
• Moratorium Risk: The proactive adoption of a BESS-specific bylaw by the town dramatically reduces the risk of a future moratorium. It shows the AHJ has already contemplated and created a framework for this type of development.

5. IRA/ITC Incentive Analysis

The site's qualification for Investment Tax Credit (ITC) adders under the Inflation Reduction Act (IRA) is extremely poor, presenting a major financial headwind for the project's pro forma.

• Opportunity Zone: No. The site is not in a qualified Opportunity Zone. (0% adder)
• Energy Community: No. The site does not qualify under the brownfield, coal closure, or statistical area definitions for an Energy Community. (0% adder)
• Low-Income Community: No. The site does not appear to qualify under any of the four Low-Income Community categories. (0% adder)
• Potential Cumulative ITC Adder: 0%. The project will only be eligible for the 30% base ITC (assuming prevailing wage and apprenticeship requirements are met). This lack of a 10-20% "stack" on the ITC significantly impacts project economics compared to competing sites.

6. BESS Score & Rationale