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Solar panels: Their installation in Morris, Somerset and Sussex counties led to a $21 million bailout - one the freeholders banned themselves from discussing with the people who pay the taxes.

(File Photo/The Star-Ledger)

Freeholders Hank Lyon and Gail Phoebus told me last week that they would love to explain just where the Morris Model for solar energy went bust, leaving taxpayers in three counties on the hook for a $21 million bailout.

But they can't. That's because of the gag order that was incorporated in the settlement recently passed by the freeholders. Both Lyon and Phoebus voted against that settlement in their respective counties, Morris and Sussex.

But both said they were told they are still bound by a non-disclosure agreement prohibiting them from saying anything disparaging about a long list of people involved in the scheme.

"It certainly seems like a terrible policy for the county to agree to gag its public officials who should be explaining to them what happened to their tax dollars," said Lyon.

It does indeed. The settlement involved payments from one public entity to another, the freeholder board to the Morris County Improvement Authority. The authority will then sort out how to pay the company that was contracted to build the solar systems on public properties in those two counties as well as Somerset.

That's as if the state Senate passed a bill banning members from commenting on an appropriation requested by the governor. If anything, the law should go the other way. The freeholders should be compelled to explain themselves.

"Three all-Republican freeholder boards and this is what they signed?" said Phoebus.

She, Lyon and other elected officials are calling on the state Comptroller to fill in the missing knowledge with a probe of just where the project went wrong.

Fat chance, I'd say. The project was pushed by a lot of members of what I like to call the Mighty Morris Moderate Machine, a crew of Republicans who pull off the sort of stunts usually associated with the Democratic machines a couple counties over.

And of course the big boss of that machine is running for the Republican nomination for president. Chris Christie is now pandering to the Republican Party base on energy. But back in 2011 when this scam got started he was still pushing alternative energy. He doesn't need a Sungate to go with Bridgegate.

The so-called "Morris Model" was at the time hailed as a template for other counties to follow in building solar-energy systems in cooperation with a private company, in this case Sunlight General. The model called for three counties to guarantee bonds for $88 million to fund the construction.

What if the project couldn't generate enough to pay off the bonds? The Improvement Authority officials still don't believe that could happen if their website is any indication.

"The initiative is being financed by the Improvement Authority, with bonds guaranteed by the county and no debt service or out-of-pocket expenses incurred by the local entities," it reads.

No out-of-pocket expenses? I asked Lyon into whose pockets that $21 million was going, but he wasn't allowed to say.

What he did say was that the entire concept is flawed. The model was based on state-mandated subsidies called "SRECs" paid by the electric utilities to Sunlight General. But shortly after the deal was inked, the value of the SRECs plummeted. Even a bailout passed by the Legislature wasn't enough to rescue the Morris Model.

"This is a bailout on top of a bailout that already occurred," said Lyon, who predicted this debacle when he first ran for office.

Lyon compared the state's approach to sales at his family's chain of Mexican restaurants.

Hank Lyon: Back in 2011, he warned this solar project could go bust - and it did so right on schedule.

"If my burritos aren't selling, I can't get the government to mandate that everyone buy more burritos," he said.

The same should apply to alternative energy, he said. If it can't survive on the free market, then those favoring solar energy should just wait until the technology improves to the point that it can.

"I don't think anyone is opposed to renewable energy," he said. "But it's backwards to say we'll be subsidizing it with technology that is inefficient and not game-changing."

That makes sense to me. And at the end of the week I decided to see how that technology is coming along by attending a conference on renewable energy at the Rutgers EcoComplex in Bordentown.

There were a number of interesting takes on the technology. Of particular note was a presentation on the great progress being made on batteries. It seems that in China many people get around via the electric moped. The battery is so small and light that the rider can take it upstairs over night to charge and then ride all around the city the next day.

An electric bicycle at a shop just over the river in Pennsylvania: Great new technology that's banned in New Jersey.

Now that's great technology - no subsidy needed. But it's banned on public roads in New Jersey. Because it has a motor the moped qualifies as a motor vehicle. But you can't register it as such; it's too small.

So there's how government could help: By getting out of the way.

As for that costly solar scheme, the freeholders would like to tell you more about it. But for that you'll have to wait for the state to shine some light on the Morris Model.

Don't wait out in the sun. Like the taxpayers, you might get burned.

ADD: Here's an excerpt from a letter to Sussex County Counsel Dennis McConnell from Daniel M. Perez, the lawyer for Gail Phoebus.

Dear Mr. McConnell:

I write further to your recent conversation with Freeholder Phoebus, during which you

cited the non-disparagement clause in the settlement agreement she voted against and cautioned her not to publicly criticize Sunlight General.

Sunlight General deserves to be publicly criticized. It squandered millions of taxpayer

dollars, failed to build-out the solar projects, lost a $66 million arbitration award, defaulted payments, was found by the arbitration panel to have breached its express and implied covenants of good faith and fair dealing, made affirmative misrepresentations to Power Partners MasTec and, during the arbitration proceeding, raised "numerous unjustified legal and factual arguments and issues that needlessly increased the costs of arbitration."

Under the circumstances, Freeholder Phoebus's public characterization of Sunlight General as a "terrible company" was wholly justified. She should be thanked for speaking truth and exercising restraint, not called out by county counsel in a misguided effort to censor her speech.

As applied to the freeholder board, the non-disparagement clause contained in the

settlement agreement is a legal nullity, void as a matter of policy and law. There is no question that it violates the First Amendment. Freeholder Phoebus has every right to express her views. It is well-established that a public official, no less than any other person, has a First Amendment right to advocate.

Freeholder Phoebus's constitutionally-protected right to free speech cannot validly be abridged by a resolution passed by three of her colleagues.

In short, the non-disparagement clause is impotent and non-binding; it has a muted bark and a toothless bite. Freeholder Phoebus should disregard it.

In fact, I encourage all of the freeholders to disregard the non-disparagement clause.