⚡ 4 BOSTON RD

MEMORANDUM

TO: Sunland America Corp. Development Committee

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 (≤5MW) Battery Energy Storage System (BESS) project. The analysis covers key development pillars including site characteristics, environmental constraints, grid infrastructure, regulatory landscape, and financial incentives.

1. Site Access & Topography

The subject property exhibits strong characteristics for site access and buildability. Located directly on Boston Road (U.S. Route 20), a major public thoroughfare, the site offers excellent primary access for both construction and operational phases. This eliminates the need for constructing long, private access roads, significantly reducing development costs and timelines. The public road access is suitable for standard construction traffic as well as oversized and overweight vehicles required for delivering heavy equipment such as battery containers, inverters, and the main power transformer.

Based on aerial imagery and its "Industrial" zoning designation, the terrain is presumed to be relatively flat and potentially graded, consistent with prior or intended industrial use. The "Buildability: Good" rating in the provided data supports this assessment. A formal topographical survey is required for detailed engineering design, but initial indicators suggest minimal earthwork will be necessary. The most critical and advantageous feature is the "POI Onsite" data point, which implies that not only is grid infrastructure present, but physical access for construction crews to the point of interconnection will be direct and unobstructed. There are no immediate indications of access easement concerns, as the property has direct frontage on a public right-of-way. Verification of any existing utility or access easements crossing the property is a standard title search requirement.

2. Environmental Constraints

This category presents the most significant uncertainty and risk for the project. The FEMA Flood Zone and Wetlands status are both listed as "Unknown." These are critical go/no-go diligence items. Any presence of FEMA-designated floodplains (especially Zone AE) or state/federal jurisdictional wetlands could severely restrict the buildable area, impose costly mitigation requirements, and potentially render the site undevelopable. A desktop environmental screening, including a review of National Wetlands Inventory (NWI) maps and FEMA flood maps, must be conducted immediately.

The data indicates "1 site(s) within ~2 mi" for Brownfield/Superfund status. While this proximity raises concerns about potential contaminant migration, it also presents a significant opportunity. If the subject parcel itself can be classified as a brownfield site under federal definitions (e.g., a property where expansion or redevelopment is complicated by the presence or potential presence of a hazardous substance), it could qualify for the 10% IRA Brownfield tax credit adder. This requires a Phase I Environmental Site Assessment (ESA) to confirm. The absence of designated Critical Habitat, Protected Areas, and nearby pipelines are positive risk-reducing factors. As the site is in Massachusetts, the Chesapeake Bay Critical Area regulations are not applicable.

3. Grid Infrastructure & Interconnection

The grid infrastructure at this location is the project's strongest attribute. The designation of "POI Onsite" is exceptionally favorable, suggesting that a distribution or transmission line is directly on or adjacent to the property boundary, which dramatically reduces the cost and complexity of the generator lead line. The nearest named substation, Palmer, is only 1 mile away and has a maximum voltage of 115 kV. A 115 kV transmission line owned by Fitchburg Gas and Electric Light Company (a Unitil subsidiary) is also just 0.6 miles away.

For a distribution-scale project (≤5MW), interconnection would likely target a local distribution feeder, not the 115 kV transmission system. The likely interconnection voltage would be in the 13.8 kV to 23 kV range. The specific feeder voltage and its available capacity require immediate verification by submitting a pre-application report to the interconnecting utility. The utility is identified by a UUID (38cc5e9a-3437-4974-ba4f-eb0a6dceb1f6), which must be cross-referenced to determine if it is National Grid or Eversource, the primary utilities in the area. Given the "POI Onsite" status, interconnection costs could be on the lower end, potentially in the $500,000 to $1.5 million range, but this is highly dependent on the required feeder upgrades identified in the System Impact Study (SIS). Timelines for the Massachusetts interconnection process can be lengthy, often 18-24 months from application to commercial operation, so initiating the process early is critical.

4. Regulatory & Zoning Analysis

The regulatory outlook appears highly favorable. The Authority Having Jurisdiction (AHJ) is Palmer Town. The property is zoned "Industrial (General)" (Code: RR), which is typically the most compatible zoning district for BESS projects. Furthermore, the existing "Land Use" is listed as "Battery Energy Storage," a critical and highly positive data point. This suggests the site may already be permitted, designated within a BESS overlay district, or that the municipality has previously reviewed and approved such a use here. This significantly de-risks the entitlement process.

The likely permitting pathway would be either by-right (permitted use) or require a Special Permit from the Palmer Planning Board. A thorough review of the Palmer Town Zoning Bylaws is required to confirm the exact process, setback requirements, noise ordinances, and any specific design standards for BESS. Given the positive indicators, the risk of a moratorium or outright restriction on BESS development in this industrial zone appears low. We must verify the status of the "Battery Energy Storage" land use designation—is it from a past application, or a current town plan? This knowledge will dictate our entire permitting strategy.

5. IRA/ITC Incentive Analysis

The project's eligibility for Investment Tax Credit (ITC) adders is currently weak, posing a potential challenge to project economics. The site does not qualify for the 10% Opportunity Zone adder, the 10% Energy Community adder, or the Low-Income Community bonus credits. This means the project, by default, only qualifies for the 30% base ITC.

The sole opportunity for an additional credit is the 10% Brownfield Adder. As noted in the Environmental section, eligibility hinges on whether the site itself meets the definition of a brownfield. This must be investigated via a Phase I ESA. If the site does not qualify, the project must be financially viable at a 30% ITC level. The potential for a 10% Domestic Content adder exists, but this is dependent on equipment procurement strategy, not site location.

• Base ITC: 30%
• Energy Community Adder: 0%
• Opportunity Zone Adder: 0%
• Brownfield Adder: Potential 10% (Requires Verification)
• Potential Cumulative ITC: 30% or 40%

6. BESS Score & Rationale

This site scores well on foundational elements but is penalized by significant uncertainty in key areas.

• Location (16/20): Excellent road access in an established industrial area. Proximity to major routes is a plus.
• Grid Access (23/25): Outstanding. "POI Onsite" and proximity to a 115kV substation are top-tier attributes that minimize interconnection cost and complexity.
• Environmental (7/15): Poor score due to critical unknowns. "Unknown" status for wetlands and flood zones, combined with a nearby superfund site, creates significant risk that must be retired.
• Regulatory (13/15): Very strong. Industrial zoning and a potential "BESS" land use designation suggest a smooth permitting path.
• Incentives (4/15): Weak. Lack of eligibility for standard adders is a major drawback. The entire incentive upside rests on the unconfirmed brownfield status.
• Buildability (8/10): Rated as "Good" and appears flat. Assumed to be straightforward, pending a formal survey.

Overall BESS Suitability Score: 71/100

7. Key Risks & Mitigants

1. Risk: Fatal Flaw Environmental Conditions. The site could have extensive wetlands or be located in a floodway, making development impossible or uneconomical.
   • Mitigant: Immediately commission a Desktop Environmental