Seventeen new wind turbines proposed on Green Mountain State Forest Land by Deerfield Wind, LLC, could generate over $3 million for the town over the next 20 years, according to Richard Saudek, attorney for both Readsboro and Searsburg in the matter.
The contract was shared with residents at a meeting Tuesday. Instead of taxes, the town will benefit from the success of the wind farm or receive a minimum of $154,000 annually.
“The agreement will go through the duration of the project,” Saudek said. “We’re talking about a pretty large contract.”
Saudek said that instead of the standard tax rate compared to assessed value, a complicated math algorithm will determine a fair market value, which is based on revenue to determine how much the company owes in taxes. A minimum of $154,000 was chosen as a base amount.
That figure was determined by an agreed upon $11,000 per megawatt for all seven of the 2 megawatt turbines to be installed in Readsboro. “It comes close to what it would be valued in a town,” Saudek said. “If they owe more than $154,000, they pay the extra. The $154,000 just puts a floor on it.”
The total project calls for 17 new turbines to be added on the same ridge as the existing wind farm in Searsburg. Seven will be in Readsboro and the rest in Searsburg, and all will be larger than the current ones. The project is pending the state Public Service Board’s approval, which is expected in October.
Saudek said he has never shared a contract like this with the public before but came away with some questions. Concerns of citizens included when the payments would come in, if the town would receive money during the construction phase, what happens if the owners default on payment and how market fluctuations would affect the contract.
Despite having those answers, Saudek said he will “double check” with the company and reword the contract to make sure it is clear.
The value is determined every year and payments will be received when all taxes are due, he said.
The town would not receive money until the farm is operating, and the town could take the company to court and eventually own the farm in a default situation, he said, and fluctuating markets will not drop the total payment below $154,000.
“Looking at it as if I never saw it before, I can find places that could be more clear,” Saudek said.
The contract will be part of the PSB’s decision, meaning that if ownership changes, the new owners would not be able to operate with negotiating a new contract or operating under this one, Saudek said.
4 June 2008
|Wind Watch relies entirely
on User Funding