The Steuben County Industrial Development Agency has negotiated the amount of annual payments that wind-farm developers will pay to the county, towns and school districts. The payments by the wind operations in Cohocton and Prattsburgh will be lower than the property taxes they would otherwise pay.
Other projects are in the pipeline in the county, and they will be included in this agreement.
However, ones not yet on the drawing board won’t: The IDA’s executive director, James Sherron, said that a different PILOT – payments in lieu of taxes – schedule, ostensibly with higher yearly payments, could still be negotiated for wind-farm projects in the future.
Under the adopted payment schedule, Naples schools will receive 47 percent of the PILOT payouts from developer UPC Wind for eight turbines within the WindFarm Prattsburgh project and 53 percent of the PILOT payouts for three turbines within the Cohocton Wind project. The remaining portion of the payments will be divided between Steuben County and the two towns in which the projects fall.
The PILOT agreement, approved unanimously by the IDA at its meeting last Thursday, lays out 20 years of payments that start at $500-per-megawatt of energy produced in year one and increase to $8,259-per-megawatt in year 20.
The amount that the Naples school district receives from the PILOT is calculated by multiplying the per-megawatt price by the number of turbines within the district by the megawattage of each turbine, then taking the project-appropriate percentage of that total – either the 47 percent slice or the 53 percent slice.
For Naples schools, payments from UPC for the WindFarm Prattsburgh project – which proposes to site eight of its 36 total 1.5-megawatt turbines within the district – range from $2,820 in year one to $46,580.76 in year 20. Payments from UPC for the Cohocton Wind project – which sites three of its 36 total 2.5-megawatt turbines within the district – range from $1,987.50 in year one to $27,491.10 in year 20.
Members of citizen groups Cohocton Wind Watch and the Naples Valley Bristol Hills Association asked the Naples Board of Education to seek higher compensation than is offered under a PILOT deal.
An attorney for the school board, Edward Premo Jr., asked the IDA in letters dated Jan. 10 and Jan. 17 to reconsider the proposed PILOT agreement for the WindFarm Prattsburgh and Cohocton Wind projects. The letters state that the PILOT “unfairly and excessively reduces the revenues that the Naples District would otherwise receive from the project(s)” if they were taxed at their full assessed value.
According to calculations included in the first letter, under the school district’s current tax rate of $15.33 per $1,000 of assessed value, the eight WindFarm Prattsburgh towers falling within the district – which, at a value of $1.712 million apiece, would have a total value of $13.7 million – would generate $210,000 per year in tax revenue. Tax revenue after 20 years would total $4.2 million – 85 percent more than the total amount received after 20 years under the PILOT deal. According to calculations included in the second letter, under the current tax rate, the three Cohocton Wind towers falling within the district – which, at a value of $3.723 million apiece, would have a total value of $11.17 million – would generate $171,000 per year. Tax revenue after 20 years would total $3.42 million – 87 percent more than the total amount received after 20 years under the PILOT deal.
Premo referred the Steuben IDA’s board of directors to an agreement between a wind-farm developer and several towns and school districts in Madison and Oneida counties. In that agreement, the developer pays $8,000-per-megawatt of energy produced. In the Steuben County PILOT, developers are not required to pay $8,000-per-megawatt until year 19 of their operation.
According to UPC Wind executive Chris Swartley, the developer will pay more than $8,000-per-megawatt when all payments – the PILOT, a host community agreement with the town of Cohocton, and payments to a historical society and special-improvement districts – are considered. But the extra payments won’t benefit school districts in Naples or Wayland-Cohocton, which receive money only from the PILOT deal.
Sherron said that PILOT negotiations with developers began “three or four years ago” and that the IDA committed to the amounts included in the adopted payment schedule back then. Though taxing authorities could have earned more revenue by taxing turbines at their full assessed value – “whether (the developers) could afford to come in and pay that kind of money was questionable,” Sherron said. “If there was not a PILOT, they would not have come here – they would have gone elsewhere.”
However, opponents of the projects have noted that UPC had filed papers at one point indicating the company would consider paying more in PILOT payments.
UPC wind had offered earlier to pay a PILOT of $4.4 million each year. In light of that offer, members of the community objected at a hearing earlier this month to the much lower PILOT pay schedule that was eventually adopted. Sherron explained, however, that the $4.4 million was proposed back when UPC thought it would be receiving state aid in the form of Empire Zone benefits. When UPC realized that those benefits would not be available, the developer was no longer able to afford the higher payments, Sherron said.
Naples Town Supervisor Frank Duserick said he was frustrated at the lack of information that the Steuben County IDA presented to the town. He said that the agency has failed to provide him with a copy of the proposed PILOT payment schedule despite repeated requests for that information.
Sherron responded that numbers had not been made public before they were adopted, as they had not yet been finalized.
By Hilary Smith
30 January 2008
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