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Wind project payments OK’d

FLORIDA – In just 20 minutes on Wednesday night, voters approved a $162,000-per-year payment in lieu of taxes agreement with the company behind the Hoosac Wind project to put 20 wind turbines on the Hoosac range.

The special town meeting at the town office building on Route 2 saw roughly 40 people quickly vote on all three warrant articles involving the New England Wind LLC project. The project calls for 12 wind turbines in Florida on Bakke Mountain and an additional eight in Monroe on Crum Hill. The vote on the payments clears the way for the project to begin after eight years of lawsuits and delaying tactics by environmental groups.

The 340-foot-tall turbines are expected to be able to produce 30 megawatts of clean energy per year. The project was estimated to cost $45 million in 2003 dollars, but the cost is expected to increase significantly by the start of construction, according to the developer.

James Art, a special town counsel hired to work on the payment in lieu of taxes (PILOT) program, was on hand to explain to the voters how the deal would work in their favor. The PILOT agreement states that the town will receive $9,000 per megawatt produced, per year, which translates into roughly $162,000 per year for Florida.

Art said the payments will escalate along with the cost of living, according to the Consumer Price Index, but they will not be reduced if the index drops in future years. This agreement has a 20-year lifespan.

“The closest PILOT agreement I could find for the developer was in New York state, and it was for $8,000 per megawatt, per year,” Art said. “So this is a very good rate for the town.”

One resident asked why the town is not going to simply tax the project over its estimated 30-year lifespan. Art said a PILOT program is actually much simpler for the town, and it guarantees consistent payments.

“The town benefits by not having to go through constant assessments of the project every three years to determine its worth – and then those assessments can be challenged,” Art said. “Plus, there’s abatement procedures and devaluation to consider. What this does is guarantee payments based on the project’s assessment in the initial years before it starts to depreciate in value. Right now, it’s very high, and this assures it stays high, even when the turbines age and devalue.”

He said there is almost no way of knowing how much the project could generate in taxes because virtually no renewable energy company would build a wind farm without a PILOT program. And, he said, the project would need to be built before it could be assessed for taxes to determine how much it would bring in for the town.

Another resident asked – because the agreement says $9,000 per megawatt produced – what would happen to the payments if one of the turbines breaks and cannot operate. Art said the company is paying for the potential energy production, and the only way the payments would decrease would be if the turbine is “decommissioned,” which requires it to be permanently removed from the site.

The town also approved an article granting an easement for the company to use a corner of the fire station’s property for moving the turbines into place. A third warrant article asking for additional easements over municipal access roads was passed over because the company still needs to work out with the town on which easements are necessary. Art said that set of easements can be voted on at the next annual town meeting and will not hold up the start of construction, which could begin as early as this fall.