New York–The PILOT explained (and not by wind developers)

Outside Looking In By Perry White

FRIDAY, JUNE 17, 2016 

Lewis County sits in on the old shell game shell-game-flash

Lewis County, only a middling sized piece of the state’s landscape, now has the distinction of having the highest number of working or proposed commercial wind facilities in the state.

The newest entry in Lewis County’s wind sweepstakes, Number Three Wind Farm, was introduced by Invenergy Wind North America during the week. This project would include 100 acres of solar panels with its 35 to 50 wind towers on 6,000 leased acres. It would have a faceplate generating capacity of 128 megawatts, 105 of that provided by wind.

(A nuclear plant, on the other hand, could produce many multiples of that power on a footprint of 100 acres. Just saying.)

With this proposal added to all the others, commercial wind enterprise would occupy a lot of acreage in Pinckney, Montague, Lowville, Harrisburg, Martinsburg and Denmark — essentially about a third of the area of Lewis County.

The Maple Ridge facility has reached the half-way mark of its expected life, sort of the 40-year-old in a group of toddlers. We are trying to ascertain just how much electricity the project’s 195 towers have produced. But the project has been largely free of problems, at least judging by the lack of controversy it has stirred.

And because it was one of the last projects approved for tax abatement under the now deceased Empire Zone program, taxing jurisdictions get nearly their full shot of property taxes, for which Maple Ridge’s owners are reimbursed by the state.

That kind of tax agreement has, sadly for future wind project communities, ridden off into the sunset, to be replaced by payment-in-lieu-of-tax agreements offering municipalities and school districts just a portion of what full assessment would bring in. And the wind industry suggests this partial payment is a big win for counties, towns and school districts — isn’t that a hoot?

What it means for Lewis County, however, is this: all of its taxpayers would become the most concentrated subsidizers of wind power in the state, and for the six towns and two school districts, that level of subsidy would grow even greater.

Because what the wind industry will never acknowledge is this: a PILOT agreement is a tax abatement. It is not a juicy extra pile of money coming from the developers and owners of wind projects. Once the bases, towers, rotors and nacelles are installed, the assessed value of the property upon which they sit should rise substantially. If taxation doesn’t rise to the new assessment level, the taxpayers in that taxing district are helping to pay the cost of acquisition, planning, construction, operation and maintenance of the project in the form of reduced tax payments.

The punch line for the wind developers is this: unlike the others who invest in these projects, there is never an equity payout at the end for taxpayers.

The concept of PILOTS is to provide early tax abatement in exchange for future full taxation and the side benefits of added jobs, added ancillary services, added ripple-effect spending in the affected area. In other words, wind projects are almost 0-for-4 in PILOT gratification. No more than a handful of permanent jobs are created, full taxation may never come on a 20-year PILOT for a project with an expected 20-year life expectancy, ripple-effect is felt only during construction and there are no long-term ancillary service businesses (“Dial 1-800-Broke Tower”?).

Here’s what we wrote about Number Three developers’ expectations: “Based on payment-in-lieu-of-taxes arrangements at other wind projects in the state, Invenergy estimates a 126-megawatt project would provide roughly $1 million per year to Lewis County and the towns, school districts and fire departments within the project area.”

What Invenergy doesn’t mention that at full value, the project would provide many times that per year to these taxing districts. They want to look at this not as a glass half full, but one brimming with happy-talk numbers.

Maple Ridge has been beneficial to Lewis County because this taxation shell-game had not yet arrived on the scene. Now, rather than suggesting a PILOT as a negotiable option, the industry obviously takes it as a given.

Some people say “Well, we would only have what we’ve got now if they don’t come here.” That is true, but this is a business that benefits distant corporate owners only by steep subsidy. The federal government and the Cuomo administration already hand out vast sums of money to wind projects, which on the basis of land footprint required are abominably inefficient in land use and which because of the vicissitudes of nature often don’t produce electricity when the grid demands it.

Lewis County is not burdened by the community schism driven by waterfront viewshed issues. All wind projects are not ugly, only those within incomparable vistas are ugly. But Lewis County — and Jefferson County, and St. Lawrence County, because those are the counties facing the challenge of commercial wind development — need to think long and hard about such plans, because this taxation shell game is not one easily won.

Perry White is managing editor of the Watertown Daily Times. Reach him at pwhite@wdt.net.

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