WATERTOWN – It appears wind projects will be scrapped from a controversial section on renewable energy in a draft version of a Uniform Tax Exemption Policy being developed by the Jefferson County Industrial Development Agency. Taxing jurisdictions, as a result, would continue to vote on tax breaks for wind projects considered by the agency.
Members of the agency’s loan review committee, which reviewed the document Tuesday, informally agreed that wind projects should not be included in the policy, which was last updated in 2004. Committee members also agreed the proposed section on renewable energy should be stiffened to ensure projects yield local benefits, and they offered alternatives to a change that would extend the maximum duration of payment-in-lieu-of-taxes agreements from 15 to 20 years.
Committee Chairwoman Michelle D. Pfaff said she is opposed to including wind projects in the proposed section on renewable energy projects.
“As far as I’m concerned, wind is off the table,” she said.
Controversy over the draft proposal, which was published by the Times earlier this month, was generated after JCIDA board member Scott A. Gray, a county legislator, called the section on wind projects a “workaround” that would enable the agency to approve a tax break for the proposed Galloo Island wind project without authorization from taxing jurisdictions.
But agency CEO Donald C. Alexander contended the proposed language about wind projects had nothing to do with the 31-turbine, 102.3-megawatt wind farm proposed on the island in the town of Hounsfield by Hudson Energy, Albany. He said the agency had “no hidden agenda” in presenting the document for review.
“It was a compilation of some of the stuff we talked about in 2010,” he said. “And you guys indicated you wanted a discussion of wind out of the UTEP, so that portion has been deleted. Nobody decided to try to disguise this as a pro-wind device.”
Mrs. Pfaff said she is dissatisfied that the draft of the policy, which the committee started reviewing last month, was published by the Times. She emphasized that it is a “working document” that will take several months for the committee to revise before it is recommended to the board for approval.
“We haven’t really talked about it, and I’m very upset this went to the newspaper before it was even discussed here,” she said.
The JCIDA’s board has the authority to revise the policy without approval from the county Board of Legislators or other municipalities. If the board decides to do so, the proposal would be sent first to all taxing jurisdictions for feedback: the county, city, towns, villages and school districts.
The JCIDA’s current policy enables the board to grant PILOTs of 10 or 15 years for manufacturing and industrial projects without approval from taxing jurisdictions; agreements for commercial developments that aren’t manufacturing-related – such as renewable energy projects and housing – need approval from taxing jurisdictions.
Though wind projects are expected to be removed, the proposed section on renewable energy projects still would enable the JCIDA board to approve PILOT agreements for other projects without approval from taxing jurisdictions, including “hydroelectric, photovoltaic and biomass energy production facilities.”
Committee members agreed that the section probably needs to be stiffened to ensure there are local benefits.
“How do we tie any of these projects to our overall mission of job creation?” Mr. Gray said. “For me to support this component, there has to be a strong tie to the benefits of the community – not just putting power on the grid.”
Mr. Alexander said renewable energy projects typically draw large capital investments to benefit the community, citing the ReEnergy’s biomass facility on Fort Drum as an example.
“One of the major advantages this community will have is the ability to deliver renewables to people who want them,” he said. “We’re in a good position – whether it’s hydro, wind, biomass, geothermal, solar – to provide some of that.”
Committee members informally agreed that the proposal to extend the maximum duration of PILOT agreements from 15 years to 20 years needs to be stiffened.
Mrs. Pfaff said that while she supports enabling a 20-year PILOT, the board should ensure the maximum tax benefit doesn’t exceed a certain threshold. She recommended that the benefit of 20-year PILOTs should not exceed the equivalent of a 50-percent tax abatement over a 15-year period.
Mr. Gray, meanwhile, has proposed a different plan that the committee will consider. He contended the agency should not offer PILOTs longer than 10 years unless companies prove they’ve made good on their plans to invest in projects and create jobs.
After a 10-year period, the board could decide to extend a PILOT by five years if it decides a company has followed through on its plans. Then, after 15 years, the board could decide to extend the PILOT for another five years if a company continues to perform well.
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