⚡ 4 BOSTON RD

MEMORANDUM

TO: Sunland America Corp. Development Team

FROM: Senior BESS Site Evaluation Analyst

DATE: October 26, 2023

SUBJECT: Comprehensive Site Diligence Analysis for 4 BOSTON RD, Palmer, Hampden County, MA (APN: 227 3_6_1)

This report provides a comprehensive due diligence analysis for the property located at 4 Boston Road in Palmer, MA, for its potential as a distribution-scale Battery Energy Storage System (BESS) project. The analysis is based on the initial data provided. Key unknowns are highlighted and must be investigated to de-risk the project.

1. Site Access & Topography

The site benefits from direct access via Boston Road (US Route 20), a major local thoroughfare, which is designated as "Public" access. This is highly advantageous for both construction and long-term operations and maintenance. The road appears suitable for heavy haul trucks required for delivering large equipment such as battery containers, power conversion systems (PCS), and the main power transformer.

The provided "Buildability: Good" rating suggests that the site's topography is likely flat or gently sloped, minimizing the need for extensive civil work and grading, which in turn reduces construction costs and timelines. However, a formal topographic survey is required for confirmation. The parcel size is listed as both 21.67 acres and 12.66 acres (Regrid data); this discrepancy must be resolved immediately via a title search and survey review to confirm the actual lot size and boundaries available for development. Assuming the smaller 12.66 acres, this is still more than sufficient for a ≤5MW BESS project, allowing for flexible layout design and inclusion of required setbacks and access roads. No access easement concerns are immediately apparent given the direct public road frontage, but a title report is necessary to confirm no encumbrances exist.

2. Environmental Constraints

This category presents the most significant data gaps and potential risks for the project.

• FEMA Flood Zone & Wetlands: Both are listed as "Unknown." This is a critical deficiency. Development within a Special Flood Hazard Area (SFHA) would require significant engineering, potential elevation of all equipment, and increased insurance costs, possibly rendering the project non-viable. Similarly, the presence of state or federally regulated wetlands could impose substantial setbacks, drastically reducing the buildable area. A desktop environmental screening, including a National Wetlands Inventory (NWI) review and FEMA map analysis, is the immediate first step.
• Brownfield/Superfund Status: The presence of a brownfield site within two miles is noted. While this could indicate a risk of soil or groundwater contamination migrating to our parcel, it also presents a potential opportunity. If the subject parcel itself can be classified as a brownfield site under IRA guidelines, the project could qualify for a 10% ITC adder. The current "Land Use" designation of "Battery Energy Storage" is unusual and warrants investigation into the site's history; a Phase I Environmental Site Assessment (ESA) is essential to clarify historical usage, assess contamination risk, and determine eligibility for the brownfield adder.
• Habitat & Protected Areas: The data indicates no critical habitat or protected areas on site, which is a positive finding that simplifies permitting. This should be confirmed during the initial environmental screening.
• Pipeline Proximity: No pipelines within a 3-mile radius is a significant safety and layout advantage, eliminating the need for pipeline-related setbacks and safety protocols.

3. Grid Infrastructure & Interconnection

The grid infrastructure is the most compelling attribute of this site. The designation "POI Onsite" (Point of Interconnection) is a major advantage, suggesting a suitable distribution feeder directly crosses or is adjacent to the property line. This can dramatically reduce the cost and complexity of interconnection, which is often a primary driver of project viability.

• Substation & Lines: The Palmer Substation (115 kV max voltage) is only one mile away, and a 115 kV transmission line is just 0.6 miles away. While direct transmission interconnection is too costly for a ≤5MW project, the proximity of this robust infrastructure implies that the local distribution network originating from this substation is likely strong and has available capacity.
• Interconnection Voltage & Feeder: The most probable interconnection will be at the distribution level, likely 13.8 kV, which is standard in Massachusetts. The "POI Onsite" suggests a three-phase overhead distribution line is present. The specific feeder name and its available capacity are critical unknowns.
• Utility & Process: The utility is listed as a UUID. Requires Verification. The primary utility in Palmer, MA is National Grid. Assuming this is the utility, we would follow the Massachusetts Standardized Interconnection process (managed by the Department of Public Utilities). Queue times in Massachusetts can be lengthy, often 18-24 months from application to commercial operation, due to detailed study requirements.
• Cost & Timeline Estimate: With a POI onsite, the physical interconnection cost could be relatively low, potentially in the $250k - $750k range. However, this excludes the cost of required utility system upgrades, which can only be determined through the formal interconnection study process.

4. Regulatory & Zoning Analysis

The regulatory landscape appears favorable but requires local-level verification.

• AHJ & Zoning: The Authority Having Jurisdiction (AHJ) is Palmer Town. The property is zoned "Industrial (General) (Code: RR)". Industrial zoning is typically the most compatible classification for BESS projects. The "RR" code is unusual for an industrial zone and Requires Verification against the official Palmer Town Zoning Bylaws.
• Permitting Pathway: BESS is often not explicitly defined in municipal zoning codes. The most likely pathway in an Industrial zone would be a permitted use by-right or, more commonly, requiring a Special Permit from the Planning Board. This process involves public hearings and site plan review. We must engage a local land use attorney to review the Palmer Town bylaws to confirm the exact process and requirements.
• Setbacks & Regulations: We must identify specific setback requirements for industrial lots, as well as any local noise ordinances that could impact transformer and HVAC selection. Compliance with Massachusetts fire safety regulations, including the Board of Fire Prevention Regulations (527 CMR) and NFPA 855, will be mandatory and will heavily influence site layout and safety system design. There are no known moratoriums on BESS in Palmer, but this must be confirmed.

5. IRA/ITC Incentive Analysis

The project's eligibility for federal incentives is currently weak, which significantly impacts its financial viability.

• Base ITC: The project is eligible for the base 30% Investment Tax Credit.
• Opportunity Zone: No. Not eligible for the 10% adder.
• Energy Community: No. Not eligible for the 10% adder.
• Low-Income Community: No. Not eligible for the 10% or 20% adder under the Low-Income Communities Bonus Credit Program.
• Potential Cumulative ITC: 30%. The only potential upside is the 10% Brownfield adder. As noted in the Environmental section, a Phase I ESA is required to determine if the site itself qualifies. Without this, the project must be underwritten assuming only the 30% base ITC.

6. BESS Score & Rationale

Overall BESS Suitability Score: 63/100

• Location (15/20): Strong. Sited in an industrial area on a major road, minimizing community impact and simplifying logistics.
• Grid Access (22/25): Excellent. "POI Onsite" is a massive de-risking factor. Proximity to a major substation suggests a robust local grid. Score is not perfect due to unknown feeder capacity.
• Environmental (5/15): Poor/High-Risk. The "Unknown" status for both wetlands and flood zones represents a potential fatal flaw. Score is low until these critical items are clarified.
• Regulatory (10/15): Good. Industrial zoning is highly favorable. Score is reduced pending confirmation of the specific permitting pathway and requirements in the Palmer Town bylaws.
• Incentives (3/15): Very Poor. Lack of any confirmed ITC adders is a major financial headwind. The project economics will be challenging with only the 30% base credit.
• Buildability (8/10): Good. The "Good" rating and ample acreage are positive. Score is slightly reduced due to the parcel size discrepancy that needs to be resolved.

7. Key Risks & Mitigants

1. Risk: Fatal Flaw Environmental Conditions. The presence of significant wetlands or location within a flood hazard area could make the site undevelopable.
   • Mitigant: Immediately commission a Desktop Environmental Report / Preliminary Jurisdictional Determination to screen for wetlands, floodplains, and other critical environmental constraints.
2. Risk: Unfavorable Project Economics. The lack of ITC adders (Energy Community, etc.) puts significant pressure on the project's financial model.
   • Mitigant: Re-run the pro-forma assuming a 30% ITC to confirm financial viability. Simultaneously, investigate the site'