Published Date Written by Barbara TetreaultDUMMER – At the end of an almost two hour informational meeting on a proposed payment-in-lieu-of taxes agreement with Granite Reliable Power, selectmen asked how many in the crowd of about 30 support that approach. Only three people raised their hands. The majority said they favored the town annually appraising the wind farm property based on its ad valorem or fair market value.
Selectman Dennis Bachand said the informational meeting was set up after voters at the March town meeting overwhelmingly passed a motion opposing a PILOT agreement with Granite Reliable Power for the wind farm components in Dummer. Bachand emphasized the board is still negotiating with GRP's majority owner, Brookfield Renewable Energy Group, and has not signed any agreement.
While all 33 wind turbines are located in the county's unincorporated places, the switching station, maintenance building, and lay down area are all in the town of Dummer.
Representing Brookfield, Attorney Matthew Upton said the company prefers PILOT agreements because renewable energy facilities are very difficult to appraise and such agreements help avoid costly appraisals, appeals and court battles over valuation.
The proposed agreement under negotiation is for eight years and calls for an annual payment to Dummer ranging from $40,000 to $80,000. The agreement sets a
payment of $808 per megawatt of capacity of the generators that are installed and permitted to generate energy. For the 99-megawatt wind farm, that means a maximum payment of $80,000. But Upton said there are times when ISO-New England, which manages the regional grid, curtails the amount of electricity the facility can generate and that would reduce the tax payment. But the town would receive at least $40,000 a year.
If GRP increases the wind farm's overall capacity beyond 99 megawatts, the added capacity would be subject to the same terms.
The town would receive $40,000 to cover taxes from when construction stared through March 1, 2013.
"This agreement took a long time to negotiate," Upton said.
Gary Roberge, head of Avitar Associates of New England, the town's assessing firm, said PILOT agreements benefit both the municipality and property owner by avoiding costly fights over valuation. He said generally neither side is completely happy with the agreement because each has to compromise.
"It stops the bleeding on both sides," he said.
Dummer Town Attorney Bernard Waugh said he is in favor of some agreement between GRP and the town. Without one, he said the two parties are almost guaranteed to end up in court over valuation.
But townspeople questioned how much GRP would pay if the property was appraised at fair market value. Roberge said his firm has appraised the property at $11.4 million. He estimated that would generate between $100,000 and $130,000 in tax revenue. But Upton argued the property is subject to depreciation, which would decrease its valuation.
"The value is there – tax the value," said O'Neil Croteau.
Several residents indicated they were opposed to entering into a PILOT with GRP because of the town and county's past dealings with Brookfield.
The company and Dummer entered up in court in a legal battle over a PILOT agreement for the Pontook hydro facility on the Androscoggin River in Dummer a number of years ago. Earlier this year, GRP challenged the PILOT it reached with the county for the wind farm. GRP argued it should not be held to the full $495,000 payment because ISO-NE had curtailed its power production. The county commission said the agreement clearly stated GRP would pay $5,000 per megawatt of installed capacity. GRP eventually paid the full $495,000.
One resident noted that the town was likely headed for a lawsuit over the assessment of the wind farm even with a PILOT.
"I don't have a lot of faith in Brookfield," said Raymond Holt.
Wayne Moynihan noted the proposed agreement states that if the town disagrees with GRP's calculation of the payment amount, then GRP shall pay what it believes is due while the two sides seek a resolution. Moynihan said if he has a disagreement over the value of his property, he has to pay the full amount while the issue is under appeal. He said GRP should also have to pay the amount the town believes is owed while seeking resolution.
Moynihan also pointed out the agreement states it is null and void if the wind farm ceases to operate for 12 months. At that point, the property would be subject to ad valorem taxation. Moynihan suggested the parties stipulate in the agreement what that ad valorem valuation would be to avoid future disagreement.
Waugh said the meeting had given the board a lot to consider.
"This is not the end of the story," he said.
After the show of hands revealed most still oppose a PILOT agreement with GRP, several residents asked if the board would hold another meeting before making any final decision. The board agreed that it will continue to negotiate with GRP and report back to townspeople.