Ilion, N.Y.
The Herkimer County Legislature ended five years of negotiations with Iberdrola Renewables Friday by approving a 20-year payment in lieu of taxes agreement for the company’s Hardscrabble Wind Project in the towns of Fairfield and Norway.
“A lot of legislative time and effort was put into the negotiations, and the end result is an agreement that has the best interest of the taxpayers in mind,” said County Administrator James Wallace. “Everyone involved did a great job and we were able to get a good deal for the taxpayers.”
According to the agreement, which was approved unanimously, the county will accept a prorated share of $8,000 per megawatt produced by the project’s 37 wind turbines in the next 20 years.
A cost of living adjustment was included for the payments, with a floor of 2.5 percent and a ceiling of 5 percent. The adjustments, according to the agreement, will commence this year, so that the January 2012 payment will be a minimum of $8,405 per megawatt, depending on the cost of living.
The agreement also calls for a $400,000 construction impact payment to be made to the county within 60 days of the start of construction, and states that if future projects in Lewis and Jefferson counties receive higher per megawatt payment amounts from Iberdrola or a related developer during the three year period from the first per megawatt payment to the county, Herkimer County’s per megawatt amount will increase to the higher level. The agreement also says that if the wind turbines interfere with E-911 transmissions, the project owners will be required to take all necessary steps to resolve the problems, and will hold the county harmless from any associated costs.
The county will also be held harmless for sales tax and mortgage tax during the entire term of the agreement, as well as in connection with county roads through the execution of an “appropriate agreement” and the posting of appropriate security be the developers. The PILOT payments will not cover substations in the event they are turned over to or owned or developed by a third party.
“I believe we were one of the first counties to take the initiative to seek out a consultant to help us in our negotiations,” said Legislator Dennis Korce, District 14. “When these negotiations began five years ago many of us on the legislature had very little understanding of windmills or things such as price per megawatt, and through our working with the consultant we were able to educate ourselves and reach an agreement that is beneficial to the taxpayers of this county.”
“From where we started to where we are now we were able to gain 60 percent through negotiation, and that increase will benefit everyone in the county,” said Legislator Fred Shaw, District 16.
While Legislator Leonard Hendrix, District 6, voted in favor of the agreement, he voiced his displeasure over the negotiation process. “I am not happy with how we were treated during these negotiations,” he said. “When we asked for information we did not receive it. We were accused of stonewalling the project throughout the process when that was not the case, as we were simply trying to negotiate the best possible agreement to help the county, the towns and the school.”
The project is expected to produce 74 megawatts of energy, which means as much as $592,000 annually could be split between the county, towns and West Canada Valley school district based on the $8,000 per megawatt rate. In all, the project is estimated to bring in over $11.8 million.
Fairfield Town Supervisor Richard Souza welcome Friday’s vote.
“Financially, this project will bring in a sizable amount of revenue for our town,” he said. “And considering our current financial standing, that additional money will be of help to us.”
Now that the legislature has approved the PILOT agreement, the Herkimer County Industrial Development Agency will conduct a public hearing of its own. Once that hearing is held, a final vote will be taken on the agreement before construction begins.
District 2 Legislator Helen Rose and District 5 Legislator Jeff Stone were absent from Friday’s special session and District 17 Legislator Bruce Weakley abstained from casting a vote.
Wallace said the vote on the PILOT agreement had to take place prior to Wednesday’s regularly schedule session of the legislature, as Iberdrola is approaching a grant deadline.
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