In Northeast Kingdom, wind power brings in tax cuts, and rising legal fees
Credit: by Andrew Stein | March 8, 2013 | vtdigger.org ~~
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While one Northeast Kingdom town is ramping up public dollars to fend off a proposed wind development, two other Vermont towns are using revenues from existing wind turbine projects to pay down or pay off their municipal taxes.
On Town Meeting Day, Newark residents gave their selectboard a resounding go-ahead to spend as much as needed on legal costs to prevent two wind companies from developing the Seneca Mountain Wind project on a local ridgeline.
“It was made clear people in town supported fighting industrial wind at whatever cost,” said Joan Bicknell, who is treasurer of this tiny town in the northeastern corner of the state.
Not too far down the road, the towns of Lowell and Sheffield voted to reduce their tax rates with revenues from utility-scale wind developments stationed within their borders.
Lowell voted to eliminate its municipal taxes because of annual dollars paid to the town from Green Mountain Power’s Kingdom Community Wind project, and Sheffield residents decided to cut their municipal tax rate in half with funds from the First Wind project.
This interplay between money and wind power, which was first spotlighted by Candace Page of the Burlington Free Press before town meeting (http://www.burlingtonfreepress.com/article/20130304/NEWS07/303040004/Town-Meeting-Day-Wind-energy-agenda), illuminates the range of views Vermonters have towards the development of wind projects on Vermont’s ridgelines.
Newark vs. Seneca Mountain Wind
When the town of Newark approved a new town plan in Dec. 2011, the document did not contain language expressly opposing the development of utility scale wind turbines.
Roughly four months later, the New Hampshire-based developer Eolian Renewable Energy, LLC and the European-based turbine manufacturer Nordex USA, Inc., submitted an application for the Seneca Mountain Wind Project to the Vermont Public Service Board (http://psb.vermont.gov/docketsandprojects/electric/majorpendingproceedings/7867) for permitting.
The companies – under the joint venture of Seneca Mountain Wind, LLC – proposed the construction of four meteorological (MET) towers to measure wind power potential in the towns of Brighton, Ferdinand and Newark. The location of one of those towers was on Newark’s Hawk Rock ridgeline.
On Sept. 17, 2012, the town voted 169-59 to amend the town plan to say that large-scale wind development is inappropriate for Newark.
Seneca Mountain Wind representatives said in a press release (http://vtdigger.org/2012/09/03/seneca-mountain-wind-agrees-to-respect-official-town-votes-on-wind-farms/) that they “will respect the official position of the community.” But Jack Kenworthy, manager of the project, asked the towns to allow for the MET towers to go up.
“It is in the interest of all parties – for or against – to allow for the full development of the facts,” he said in a public statement.
The Public Service Board has yet to issue a ruling on the MET tower application. While the board considers Act 250 criteria, which includes town plans, a draft bill that recently passed out of a senate committee would make it so that applicants of energy generation projects must conform to Act 250 criteria, giving town plans greater control over the PSB’s permitting process under Section 248 (http://vtdigger.org/2013/02/27/senate-panel-passes-wind-permitting-legislation/).
At the same time that Newark has sought legal help throughout the approval process for the MET tower application, the town has found itself embroiled in a legal battle with Hawk Rock Holdings, LLC. The company owns the Hawk Rock land that Seneca Wind leases, and Bicknell said Hawk Rock Holdings is suing Newark to remove the new language opposing utility scale wind development from the plan and return it to the Dec. 2011 version.
As of September 2012, the last time Newark was billed by its lawyers, the town had spent $31,200 on legal fees. Bicknell estimates that since then, the town has incurred an extra $25,000 in legal expenses.
Residents at town meeting voted 88-12 to put $50,000 into a fund for legal services. Setting aside this amount raises the town’s tax rate by 5 cents, Bicknell said.
“The town of Newark has never had much in the way of legal expenses… and this past year made everyone aware that was no longer going to be the way of the world for Newark,” she said.
Before the townspeople passed this article, they struck from it language that would have limited the selectboard’s spending on legal fees to $50,000. Bicknell said the move was symbolic.
“It was kind of a redundant article because the selectmen by statute are tasked with defending the town plan … so they actually can deficit spend for legal expenses,” she said.
Blowing down the tax rates
Not every town dealing with wind developers is as opposed to ridgeline development as Newark is.
Although there is some strong opposition in Lowell to Green Mountain Power’s 21-turbine project, the town backed the proposal in 2010 and is using revenue from the project to pay for municipal expenses.
“In the town of Lowell, there’s only a minority group that’s against the project,” said Town Treasurer Pam Tetreault.
In spring of 2010, the town voted 342-114 in favor of GMP’s project, as long as the utility paid the town at least $400,000 annually. That vote was a huge turnout compared to the roughly 175 residents that voted this year.
When GMP built the Lowell project, the utility agreed to pay Lowell $535,000 annually for 25 years, with an automatic increase of $32,5000 in annual payments every five years. That means five years from now, the town will bring in $567,500 annually; 10 years from now the town will raise $600,000, and so on.
The town voted from the floor on Tuesday to pay off residents’ municipal tax rates with the lion’s share of those dollars.
This means that a Lowell taxpayer with an average home value of $150,000 will hold onto $809 he or she would have otherwise paid in municipal taxes.
Last fiscal year, the town collected $447,000 in municipal taxes, and Tetreault estimates that number will increase to $470,000 this fiscal year. The remaining balance will go into a reserve fund for future infrastructure projects or other measures voted on by the town.
Sheffield, on the other hand, decided to use revenue from the 16-turbine First Wind project to pay down only half of its municipal tax rate.
Townspeople supported the project, which was erected in October 2011, by a 2005 vote of 120-93, said Town Clerk Kathy Newland.
This is the second year that the town voted to use the $520,000 it receives annually from the project to pay off half of the town’s municipal taxes. Newland said that $520,000 annual payment is stretched out over a 20-year period and is fixed at that level.
According to the Caledonian Record, Sheffield residents came close to voting for those funds to pay off all municipal expenses, like Lowell did. The vote, however, resulted in a 43-43 tie, and Sheffield Town Moderator Patrick Ham defeated the article to allow for further discussion on how to allocate the funds.
In the end, Newland said, the town decided to save those funds for the future of the town.
“The majority felt they needed to save more for posterity,” she said.
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