Three counties have a solution to salvage an $88 million solar project that went bust: borrow more millions to pump into the project and hope it will eventually turn a profit and ease the pain to taxpayers, officials said.

Some officials view the solution as damage control. Others are calling it a repeat of a mistake, one they will fight to avoid.

Freeholders in Sussex, Morris and Somerset counties will vote on settlement agreements this week that would end multiple lawsuits and get the projects back on track, officials said.

But there will be opposition -- and some have even called for federal authorities to investigate where some of the millions went when the project fizzled.

The settlement agreements are a choice to opt for "stability over uncertainty and chaos" that could result from future years of litigation, said John Eskilson, the Sussex County administrator, who unveiled some key aspects of the coming settlement on Friday.

In a deal that will be "nearly identical" to one in Morris and Somerset, Sussex will pump millions into the settlement and take over its part of the solar development, according officials.

Sussex plans to borrow $7 million, buying its own bonds using an emergency reserve account from the sale of a county-owned nursing home in 2012, said county officials.

The original plan was a public-private partnership to install panels on public buildings in the three counties and then sell excess electricity, using the revenues to pay off the debt.

The concept was called the "Morris model," held up nationally as an example of how to take advantage of federal grants and subsidies and produce renewable energy. It was the second project of its kind and the previous one was hailed as a success.

But the solar tax-subsidy prices plummeted within months of the deal being struck in 2011. The project quickly ground to halt, and developer SunLight General and contractor Power Partners MasTec sued each other.

Ultimately, MasTec was awarded $66.3 million by arbitrators, court documents showed.

Although nearly all the projects had been completed in Somerset, only half were built in Morris and Sussex.

Morris County Freeholder John Krickus, a longtime opponent of the solar project, said he won't be able to comment on the specifics in the potential settlement until Wednesday, when the Morris freeholders will also meet. But Krickus emphasized the original scope of the projects will not be expanded.



"The bonds are issued. We can't take them back," Krickus said. "Even though we disagreed with the project, what we're doing now is working hard to minimize the losses... We're in damage control now."

Morris is budgeting $3.4 million to cover the projects this year, he pointed out.

The settlements have opposition, however. Another Morris freeholder, Hank Lyon, went further than Krickus, saying he disagrees with the settlement terms - although he did not talk details.

"Morris County has not made a decision regarding the unbuilt sites. However, I do not support spending more taxpayer dollars to complete the unbuilt sites," Lyon said. "As to the specific terms of the settlement, I do not support them."

Criticism of the public-private partnership reached a fever pitch this week. Two officials even called for a federal and state investigation of the project's finances this week. Freeholder Gail Phoebus and Assemblyman Parker Space asked the U.S. Department of Justice, among others, to look into allegations of "trust fund diversion" brought by MasTec against SunLight in 2013 court papers.

Phoebus said she will vehemently oppose the settlement terms - since it won't hold SunLight and the other accountable.

"Taxpayers should not be forced to pay (additional) millions of dollars to bail out a failed solar developer or pay exorbitant fees to attorneys," Phoebus said.

SunLight, through an attorney, has denied all allegations of impropriety.

Somerset County officials did not return calls this week on the state of the negotiations.

Seth Augenstein can be reached at saugenstein@njadvancemedia.com. Ben Horowitz can be reached at bhorowitz@njadvancemedia.com.