Fung’s $79M No-Bid Contract Pulled May Have Left Millions on the Table — Cranston Now to Bid Solar

Fung’s $79M No-Bid Contract Pulled May Have Left Millions on the Table — Cranston Now to Bid Solar

A GoLocal investigation into a no-bid contract between the administration of Cranston Mayor Allan Fung and Southern Sky — a politically connected solar company — has led to the contract being pulled.

On Monday morning, GoLocal published a detailed article outlining the multi-million dollar agreement by Fung. Later that day, Southern Sky pulled the application.

The contract, if it had been approved, was worth approximately $79 million over its duration. And, the contract may have left millions in potential revenue on the table for Cranston.

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Council Reacts -- More on Bid

Councilman Steve Stycos told GoLocal, “The company has withdrawn its interest in the no-bid contract, so as I understand it, it is dead. I had no part in the deal, so I am repeating what I have been told.”

"I can't imagine what Mayor Fung was thinking,” added Stycos.

Council President Michael Farina said, “Yes, Southern Sky withdrew their proposal on Monday and welcomed the bid process, so at this point it is no longer before the council and the Board of Contracts and Purchasing will do a bid.”

The usually accessible Fung has not responded to questions submitted by phone, email or texts.

The no-bid contract was for a duration of 25 years with two five year automatic extensions — the contract totaled 35 years.

The numbers are staggering and the percentage the Cranston received in the no-bid contract is below what other cities and towns have received.

According to a GoLocal analysis, of the approximately $79 million in total energy credits received during the term of the agreement, Cranston under the no-bid contract would receive 27.5 percent of the so-called remote net meter payments.

Over the 35 years, Cranston would save an estimated $21.8 million.

The developer — Southern Sky would receive payments of over $57.5 million.

Other cities and towns are receiving 30 percent and 32 percent in their agreements. If Cranston were to receive 32 percent, the additional revenue coming to Cranston would exceed $3.5 million over the length of the contract.

“Unless terminated earlier pursuant to the terms of this Agreement, shall remain in effect until the twentieth-fifth (25th) anniversary of the Commercial Operation Date. This Agreement shall be extended automatically for two (2) successive additional five (5) year terms unless City provides written notice of its intent to not so extend the Term to Seller ninety (90) days prior to the end of each additional five (5) year term,” states Fung’s agreement.

Southern Sky Renewable Energy RI is headed by Ralph Palumbo, who is the manager of multiple solar projects across Rhode Island and more than a dozen and a half separate limited liability corporations. According to one press announcement, "Southern Sky Renewable Energy RI, a Rhode Island-based business, is the leading solar developer in the state with over 100,000 panels installed and a pipeline of 296 MWs."

Palumbo has also refused to respond to GoLocal questions.

Some of Southern Sky's corporations are tied to New York City-based Izzet Bensusan who is the Managing Partner and Founder at Captona. 

The NY-based Captona says it is "a North America-focused investment company specializing in power generation and energy infrastructure assets."

Palumbo is a major political campaign donor in Rhode Island. He has donated over $50,000 to top politicians in Rhode Island, according to Rhode Island campaign finance reports including thousands to Governor Gina Raimondo ($3,400), Speaker of the House Nick Mattiello ($4,750).

Palumbo gave Fung $1,000 in the summer of 2018 -- in the midst of his second unsuccessful bid for Governor. 

Editor's Note: An earlier version of this story used had the wrong first name for Council President Farina.