Saturday, November 14, 2009
Friday, November 13, 2009
Developers win
Bad deal for Jefferson County taxpayers
Jefferson County homeowners, dairy farmers and small businesses will pay the price in higher taxes to subsidize tax breaks for developers of the Galloo Island Wind Farm under the terms of a tax agreement worked out with the Jefferson County Industrial Development Agency.
The county, town of Hounsfield and Sackets Harbor School District will lose out on tens of millions of dollars in property taxes on the nearly $500 million project under the terms of the JCIDA agreement with Upstate NY Power Corp. for payments in lieu of taxes.
Jefferson County and the town of Hounsfield will lose an immediate $10.5 million on mortgage and sales taxes that could be used now to balance budgets, lower taxes, build roads or improve services. The proposed PILOT agreement with Upstate NY Power Corp. would also cut the state out of almost $12 million in mortgage and sales taxes.
In return, Upstate NY promises to share with the county, school and town $2.14 million a year in payments-in-lieu-of-taxes beginning in the next twoor three years. It is a fraction of the fair share they would pay if the property were fully assessed.
It's a lousy deal for taxpayers, and it gets worse.
PILOTs and other preferential treatment for developers are meant to foster job growth, but the wind farm will generate a handful of permanent jobs beyond the short-term construction work. Businesses, farmers and homeowners will have to live with the consequences of the wind farm and related transmission line passing through some of the best farmland in the county without the benefit of cheaper, reliable power generated in their backyard at their expense.
Besides the nearly $23 million in tax abatements, Upstate NY will reap a taxpayer-funded windfall from the federal government. The developer and JCIDA are pushing for quick approval of the PILOT so Upstate NY can cash in on a 30 percent subsidy from the federal Treasury for development costs, if some of the turbines are built by the end of next year.
Beyond the PILOT for the wind farm's construction, another anticipated tax break agreement would let Upstate NY avoid paying mortgage recording and sales taxes on the $153 million transmission line needed to connect the wind farm to the power grid. More lost revenue for the county, town and state.
In fairness to taxpayers, the county should reject this tax giveaway.
Jefferson County homeowners, dairy farmers and small businesses will pay the price in higher taxes to subsidize tax breaks for developers of the Galloo Island Wind Farm under the terms of a tax agreement worked out with the Jefferson County Industrial Development Agency.
The county, town of Hounsfield and Sackets Harbor School District will lose out on tens of millions of dollars in property taxes on the nearly $500 million project under the terms of the JCIDA agreement with Upstate NY Power Corp. for payments in lieu of taxes.
Jefferson County and the town of Hounsfield will lose an immediate $10.5 million on mortgage and sales taxes that could be used now to balance budgets, lower taxes, build roads or improve services. The proposed PILOT agreement with Upstate NY Power Corp. would also cut the state out of almost $12 million in mortgage and sales taxes.
In return, Upstate NY promises to share with the county, school and town $2.14 million a year in payments-in-lieu-of-taxes beginning in the next twoor three years. It is a fraction of the fair share they would pay if the property were fully assessed.
It's a lousy deal for taxpayers, and it gets worse.
PILOTs and other preferential treatment for developers are meant to foster job growth, but the wind farm will generate a handful of permanent jobs beyond the short-term construction work. Businesses, farmers and homeowners will have to live with the consequences of the wind farm and related transmission line passing through some of the best farmland in the county without the benefit of cheaper, reliable power generated in their backyard at their expense.
Besides the nearly $23 million in tax abatements, Upstate NY will reap a taxpayer-funded windfall from the federal government. The developer and JCIDA are pushing for quick approval of the PILOT so Upstate NY can cash in on a 30 percent subsidy from the federal Treasury for development costs, if some of the turbines are built by the end of next year.
Beyond the PILOT for the wind farm's construction, another anticipated tax break agreement would let Upstate NY avoid paying mortgage recording and sales taxes on the $153 million transmission line needed to connect the wind farm to the power grid. More lost revenue for the county, town and state.
In fairness to taxpayers, the county should reject this tax giveaway.
EverPower: Howard groundbreaking in May
Howard, N.Y.
While Howard town officials have not been contacted recently, the company planning a 25-turbine wind project is moving forward with development.
Kevin Sheen, head of business development for EverPower Renewables’ Howard project, said Wednesday the company is pushing for a springtime groundbreaking on the project.
“Given that the financial and power markets have started to recover, our goal is to break ground on the Howard Wind Project next year,” Sheen said. “We are currently working on the final details for construction including the transportation routing. We are hopeful that all will go according to plan and we will begin construction in May of next year.”
The Howard town planning board issued the company a conditional use permit, but several more agreements are needed before the company can finalize its project application with the town board, Sheen said.
“From a permitting point of view we need to complete the county road use agreement, the town road use agreement, the PILOT agreement with the county and the host community agreement with the Town of Howard,” he said in response to an email from the Tribune. “All of those are being worked on and should be resolved in the coming months.”
Along with permits, getting turbines to put on the site also is a challenge.
The project includes 25 turbines, each rated for 2.5 megawatts of power production in optimal wind conditions. Sheen said the company is looking to buy German-based Nordex turbines, but the final deal has not been set yet.
Nordex currently builts its model N90 turbines in Rostock, Germany, the company’s Web site states, but a new plant in Arkansas is under construction, scheduled for a mid-2010 opening.
The most-important step in the project is getting funds to pay for the construction.
“We are still researching the different options that would allow us to finance the project,” Sheen said via email. “Typically, these projects receive a construction loan that is converted into longer-term financing once the project becomes operational.”
Sheen added the company is working on a power purchase agreement, which would help finance the construction.
Also helping the firm will be its purchase by Terra Firma, a private equity firm, that is in the midst of a $350 million buyout of EverPower, according to the Reuters news service in August. Sheen said the firm will help near-term projects move ahead, including Howard.
EverPower also is developing a 65-80 MW wind project in Allegany, as well as projects in Oregon and Ohio. The company operates a 62.5 MW project with 25 Nordex N90 turbines in Cambria County, Pennsylvania.
While Howard town officials have not been contacted recently, the company planning a 25-turbine wind project is moving forward with development.
Kevin Sheen, head of business development for EverPower Renewables’ Howard project, said Wednesday the company is pushing for a springtime groundbreaking on the project.
“Given that the financial and power markets have started to recover, our goal is to break ground on the Howard Wind Project next year,” Sheen said. “We are currently working on the final details for construction including the transportation routing. We are hopeful that all will go according to plan and we will begin construction in May of next year.”
The Howard town planning board issued the company a conditional use permit, but several more agreements are needed before the company can finalize its project application with the town board, Sheen said.
“From a permitting point of view we need to complete the county road use agreement, the town road use agreement, the PILOT agreement with the county and the host community agreement with the Town of Howard,” he said in response to an email from the Tribune. “All of those are being worked on and should be resolved in the coming months.”
Along with permits, getting turbines to put on the site also is a challenge.
The project includes 25 turbines, each rated for 2.5 megawatts of power production in optimal wind conditions. Sheen said the company is looking to buy German-based Nordex turbines, but the final deal has not been set yet.
Nordex currently builts its model N90 turbines in Rostock, Germany, the company’s Web site states, but a new plant in Arkansas is under construction, scheduled for a mid-2010 opening.
The most-important step in the project is getting funds to pay for the construction.
“We are still researching the different options that would allow us to finance the project,” Sheen said via email. “Typically, these projects receive a construction loan that is converted into longer-term financing once the project becomes operational.”
Sheen added the company is working on a power purchase agreement, which would help finance the construction.
Also helping the firm will be its purchase by Terra Firma, a private equity firm, that is in the midst of a $350 million buyout of EverPower, according to the Reuters news service in August. Sheen said the firm will help near-term projects move ahead, including Howard.
EverPower also is developing a 65-80 MW wind project in Allegany, as well as projects in Oregon and Ohio. The company operates a 62.5 MW project with 25 Nordex N90 turbines in Cambria County, Pennsylvania.
Thursday, November 12, 2009
One ugly model
At a public hearing on the Galloo Island Wind Farm payment in lieu of taxes deal, no one from the town of Hounsfield raised a voice in support of or in opposition to a plan that will bring $2.14 million annually to the county, town, Sackets Harbor Central School and Jefferson County IDA. You have to wonder why.
The deal, after all, will give the wind farm an 85 percent break on taxes that would be due without the PILOT. On an assessment of $400 million (the project will cost at least $500 million to build), from a total property tax bill of $14.52 million, the school district alone would receive $8.9 million dollars a year, at the current tax rate of $22.28 per thousand. The district's budget for this school year is $7,900,835. Hmmm. Is someone giving away the farm?
Likewise, the county would receive $4.59 million and the town $1.02 million if full taxes were paid. Even if the assessment were cut in half, to $200 million, the school district would get almost $4.5 million, far more than its current levy; the county would get $2.25 million; and the town $500,000.
Then, of course, if you're starting to ponder the full cost of corporate welfare, you can add this into your philosophical equation: by being certified by the IDA, which will take title to the wind farm for the duration of the PILOT in order to grant these benefits, the developers will avoid paying almost $23 million in sales and mortgage taxes. Almost half of that would have gone to the town and county.
And don't forget the 2.5 cents per kilowatt hour the federal government will subsidize the project, in the form of federal production tax credits and an accelerated depreciation schedule from the IRS that will allow a 40 percent depreciation in the first year, and full depreciation over five years.
Add it all up, and you can see just how much this "private sector" developer will rely on federal, state and local taxpayers to permit him to make profits. Especially galling is the extent to which local officials, especially the IDA, are doling out hard-won tax dollars to bring, at best, a handful of jobs to the region, and a short-lived flurry of construction money. And with the employees of this project likely living on an island six miles out in Lake Ontario, it's not as though they're going to be pouring their wages back into Sackets Harbor or Dexter or Watertown.
Most PILOT agreements give a graduated tax break that never exceeds 75 percent and which drops over time to zero. This agreement keeps the 85 percent break throughout its lifetime. And there is no host community component to this; at least if Hounsfield were getting a landfill, it would receive compensation unique to the siting. As it is, the town is going to be the red-headed stepchild of this agreement. And Jefferson County won't be far ahead of the town.
If this is the model for future wind farms in Jefferson County, we're in big, big trouble. If the marketplace plus controlled federal subsidies can't sustain wind development, it should not be the obligation of local and state taxpayers to foot the bill for the developers' profit margins. Next time there's a public hearing on a wind farm PILOT agreement, it wouldn't hurt if those of you who think this model is broken and should be tossed out would show up and speak your mind.
The deal, after all, will give the wind farm an 85 percent break on taxes that would be due without the PILOT. On an assessment of $400 million (the project will cost at least $500 million to build), from a total property tax bill of $14.52 million, the school district alone would receive $8.9 million dollars a year, at the current tax rate of $22.28 per thousand. The district's budget for this school year is $7,900,835. Hmmm. Is someone giving away the farm?
Likewise, the county would receive $4.59 million and the town $1.02 million if full taxes were paid. Even if the assessment were cut in half, to $200 million, the school district would get almost $4.5 million, far more than its current levy; the county would get $2.25 million; and the town $500,000.
Then, of course, if you're starting to ponder the full cost of corporate welfare, you can add this into your philosophical equation: by being certified by the IDA, which will take title to the wind farm for the duration of the PILOT in order to grant these benefits, the developers will avoid paying almost $23 million in sales and mortgage taxes. Almost half of that would have gone to the town and county.
And don't forget the 2.5 cents per kilowatt hour the federal government will subsidize the project, in the form of federal production tax credits and an accelerated depreciation schedule from the IRS that will allow a 40 percent depreciation in the first year, and full depreciation over five years.
Add it all up, and you can see just how much this "private sector" developer will rely on federal, state and local taxpayers to permit him to make profits. Especially galling is the extent to which local officials, especially the IDA, are doling out hard-won tax dollars to bring, at best, a handful of jobs to the region, and a short-lived flurry of construction money. And with the employees of this project likely living on an island six miles out in Lake Ontario, it's not as though they're going to be pouring their wages back into Sackets Harbor or Dexter or Watertown.
Most PILOT agreements give a graduated tax break that never exceeds 75 percent and which drops over time to zero. This agreement keeps the 85 percent break throughout its lifetime. And there is no host community component to this; at least if Hounsfield were getting a landfill, it would receive compensation unique to the siting. As it is, the town is going to be the red-headed stepchild of this agreement. And Jefferson County won't be far ahead of the town.
If this is the model for future wind farms in Jefferson County, we're in big, big trouble. If the marketplace plus controlled federal subsidies can't sustain wind development, it should not be the obligation of local and state taxpayers to foot the bill for the developers' profit margins. Next time there's a public hearing on a wind farm PILOT agreement, it wouldn't hurt if those of you who think this model is broken and should be tossed out would show up and speak your mind.
Wind law plan leads to feud
CLAYTON — Iberdrola Renewables Inc. and Environmentally Concerned Citizens Organization are trading jabs over the proposal to amend the town's zoning law for wind power facilities.
Iberdrola's attorney, Douglas H. Ward, of Young, Sommer, Ward, Ritzenberg, Baker & Moore LLC, Albany, asked the town not to change the town's zoning law in a Sept. 21 letter.
"As there is no apparent basis for these recommendations and as the proposed standards far exceed measures proven throughout New York to appropriately avoid/minimize impacts, on behalf of my client I respectfully request that the Board should not take such legislative action," he wrote.
ECCO's attorney, Gary A. Abraham, Allegany, wrote on Oct. 28 that Mr. Ward's letter had a "number of errors or debatable conclusions."
The committee's recommendations, he said, were based on studies done by Cavanaugh Tocci Associates, Sudbury, Mass., and Schomer & Associates Inc., Champaign, Ill.
Instead, the limits based on state guidance have brought complaints about noise in other towns, he wrote.
"Such guidance and models have proven to be arbitrary, based on wind industry-sponsored noise assessment procedures that depart from established acoustic standards," Mr. Abraham wrote.
Iberdrola is the developer for the proposed Horse Creek Wind Farm, which would have 62 turbines in Clayton and Orleans.
On Aug. 26, the Town Council agreed to follow almost all of the recommendations from the town's wind committee. They would increase setbacks from roads and nonparticipating residents to 31/2 times the height of the turbine. And they would reduce the amount of noise allowed to five decibels above the ambient noise level at nonparticipating property lines. Participants can have up to 50 decibels of noise at their homes.
At the Town Council's May 27 meeting, Iberdrola business developer Jenny L. Burke told the council that a new law based on the committee's recommendations would eliminate Horse Creek Wind Farm.
Mr. Ward suggested the expected law could be considered as part of the town's environmental review process for the project. He said the town required a full environmental impact review for the project.
"As a result, my client, at significant cost, has prepared extensive studies and reports regarding the impacts and benefits of the proposed Project," he wrote.
The town could accept the committee's recommendations as comments in the environmental review and decide "whether or not these additional measures were necessary to reduce impacts to the maximum extent practicable or whether they were merely devices designed to exclude wind projects without regard to a rational balancing of benefits and impacts."
But Mr. Abraham said the town is not required to provide more protection through the environmental review than is merited under the local law.
"Courts in New York have found under some circumstances that towns may not impose requirements that exceed those found in numerical standards under a local law," he wrote.
Mr. Ward agreed the existing law should be sufficient.
"The determination and balancing of these protections and benefits is firmly in the Town Board's hands," he wrote. "In contrast, the additional measures proposed by the Committee are excessive and aimed at exclusion rather than protection by establishing standards that preempt, rather than enhance, the Board's control over responsible decision-making."
Mr. Abraham argued that the recommendations come with support of expert research.
"Independent acoustic experts and U.S. and international standard-setting organizations have called for setbacks up to two miles from a wind farm to avoid health effects from pulsating, low frequency and audible sound levels that result in sleeplessness," he wrote.
He pointed out that easements for the setbacks can be purchased from nonparticipating residents.
Mr. Ward concluded by writing, "Finally it is fundamentally unfair for the Board to implement new rules at this stage of the Project review proceeding."
Mr. Abraham responded, "It is not unfair to modify the local law at this time because the process of considering such modification has been ongoing for a considerable time, putting Mr. Ward's client on notice that change may be coming."
Iberdrola's attorney, Douglas H. Ward, of Young, Sommer, Ward, Ritzenberg, Baker & Moore LLC, Albany, asked the town not to change the town's zoning law in a Sept. 21 letter.
"As there is no apparent basis for these recommendations and as the proposed standards far exceed measures proven throughout New York to appropriately avoid/minimize impacts, on behalf of my client I respectfully request that the Board should not take such legislative action," he wrote.
ECCO's attorney, Gary A. Abraham, Allegany, wrote on Oct. 28 that Mr. Ward's letter had a "number of errors or debatable conclusions."
The committee's recommendations, he said, were based on studies done by Cavanaugh Tocci Associates, Sudbury, Mass., and Schomer & Associates Inc., Champaign, Ill.
Instead, the limits based on state guidance have brought complaints about noise in other towns, he wrote.
"Such guidance and models have proven to be arbitrary, based on wind industry-sponsored noise assessment procedures that depart from established acoustic standards," Mr. Abraham wrote.
Iberdrola is the developer for the proposed Horse Creek Wind Farm, which would have 62 turbines in Clayton and Orleans.
On Aug. 26, the Town Council agreed to follow almost all of the recommendations from the town's wind committee. They would increase setbacks from roads and nonparticipating residents to 31/2 times the height of the turbine. And they would reduce the amount of noise allowed to five decibels above the ambient noise level at nonparticipating property lines. Participants can have up to 50 decibels of noise at their homes.
At the Town Council's May 27 meeting, Iberdrola business developer Jenny L. Burke told the council that a new law based on the committee's recommendations would eliminate Horse Creek Wind Farm.
Mr. Ward suggested the expected law could be considered as part of the town's environmental review process for the project. He said the town required a full environmental impact review for the project.
"As a result, my client, at significant cost, has prepared extensive studies and reports regarding the impacts and benefits of the proposed Project," he wrote.
The town could accept the committee's recommendations as comments in the environmental review and decide "whether or not these additional measures were necessary to reduce impacts to the maximum extent practicable or whether they were merely devices designed to exclude wind projects without regard to a rational balancing of benefits and impacts."
But Mr. Abraham said the town is not required to provide more protection through the environmental review than is merited under the local law.
"Courts in New York have found under some circumstances that towns may not impose requirements that exceed those found in numerical standards under a local law," he wrote.
Mr. Ward agreed the existing law should be sufficient.
"The determination and balancing of these protections and benefits is firmly in the Town Board's hands," he wrote. "In contrast, the additional measures proposed by the Committee are excessive and aimed at exclusion rather than protection by establishing standards that preempt, rather than enhance, the Board's control over responsible decision-making."
Mr. Abraham argued that the recommendations come with support of expert research.
"Independent acoustic experts and U.S. and international standard-setting organizations have called for setbacks up to two miles from a wind farm to avoid health effects from pulsating, low frequency and audible sound levels that result in sleeplessness," he wrote.
He pointed out that easements for the setbacks can be purchased from nonparticipating residents.
Mr. Ward concluded by writing, "Finally it is fundamentally unfair for the Board to implement new rules at this stage of the Project review proceeding."
Mr. Abraham responded, "It is not unfair to modify the local law at this time because the process of considering such modification has been ongoing for a considerable time, putting Mr. Ward's client on notice that change may be coming."
Top executives arrested in Italy wind farm probe
Italian finance police, mounting an operation code named "Gone with the wind", yesterday said they had arrested two of the country's most prominent businessmen in the wind energy sector.
Police said the charges related to fraud involved in obtaining public subsidies to construct wind farms. They are also investigating the sale of wind farms to foreign companies.
Oreste Vigorito, head of the IVPC energy company and president of Italy's National Association of Wind Energy, was arrested on Tuesday in Naples. Vito Nicastri, a Sicilian business associate, was arrested in Alcamo, Sicily.
Two other men were arrested in Sicily and the Naples area, while 11 others were charged but not arrested.
IVPC, a leading constructor and operator of wind farms in Italy, did not return calls asking for comment. Mr Vigorito is also well known as president of the Benevento football club.
"Gone with the wind", mounted by the finance ministry's anti-fraud police, started in 2007 and began by blocking public subsidies worth €9.4m ($14m, £8.4m) granted by the ministry for economic development. Last year police confiscated seven wind farms with 185 turbines in Sicily linked to IVPC.
Anti-Mafia prosecutors in Sicily have launched a parallel investigation. The Financial Times was told in April that a large number of wind farms had been built with public subsidies but had never functioned.
Police said yesterday they had sent requests for documentation to five foreign companies - two in the Netherlands and three in Spain - that were linked to IVPC. Other companies in Ireland and the UK, said to be Italian affiliates of IVPC, have been asked by Italian authorities to provide information.
Police also said they were carrying out checks on 12 companies in Italy, including nine with company names that are variations of IP Maestrale and which share the same street name and number as IVPC in Avellino, near Naples.
International Power of the UK, the largest operator of wind farms in Italy last year with a market share of about 15 per cent, said it owned the IP Maestrale companies.
International Power acquired its Maestrale portfolio of wind farms in 2007 for €1.8bn from Trinergy, an Irish company that had bought them from IVPC two years earlier. Some of the projects had been developed by Mr Nicastri, although IP told the FT in April it had no direct relationship with him.
International Power, which has not been charged with any wrongdoing, said in London yesterday: "We are aware of the arrests made in Italy yesterday. Criminal proceedings in Italy are conducted on a confidential basis and we will not make any comment on either the arrests or the individuals involved at this time."
Mr Nicastri told the FT in April he had developed the "majority" of Sicily's wind farms. He had then sold some of the projects to IVPC for further sale to foreign companies.
All were functioning, he said at the time. His office declined to comment yesterday.
Police said the charges related to fraud involved in obtaining public subsidies to construct wind farms. They are also investigating the sale of wind farms to foreign companies.
Oreste Vigorito, head of the IVPC energy company and president of Italy's National Association of Wind Energy, was arrested on Tuesday in Naples. Vito Nicastri, a Sicilian business associate, was arrested in Alcamo, Sicily.
Two other men were arrested in Sicily and the Naples area, while 11 others were charged but not arrested.
IVPC, a leading constructor and operator of wind farms in Italy, did not return calls asking for comment. Mr Vigorito is also well known as president of the Benevento football club.
"Gone with the wind", mounted by the finance ministry's anti-fraud police, started in 2007 and began by blocking public subsidies worth €9.4m ($14m, £8.4m) granted by the ministry for economic development. Last year police confiscated seven wind farms with 185 turbines in Sicily linked to IVPC.
Anti-Mafia prosecutors in Sicily have launched a parallel investigation. The Financial Times was told in April that a large number of wind farms had been built with public subsidies but had never functioned.
Police said yesterday they had sent requests for documentation to five foreign companies - two in the Netherlands and three in Spain - that were linked to IVPC. Other companies in Ireland and the UK, said to be Italian affiliates of IVPC, have been asked by Italian authorities to provide information.
Police also said they were carrying out checks on 12 companies in Italy, including nine with company names that are variations of IP Maestrale and which share the same street name and number as IVPC in Avellino, near Naples.
International Power of the UK, the largest operator of wind farms in Italy last year with a market share of about 15 per cent, said it owned the IP Maestrale companies.
International Power acquired its Maestrale portfolio of wind farms in 2007 for €1.8bn from Trinergy, an Irish company that had bought them from IVPC two years earlier. Some of the projects had been developed by Mr Nicastri, although IP told the FT in April it had no direct relationship with him.
International Power, which has not been charged with any wrongdoing, said in London yesterday: "We are aware of the arrests made in Italy yesterday. Criminal proceedings in Italy are conducted on a confidential basis and we will not make any comment on either the arrests or the individuals involved at this time."
Mr Nicastri told the FT in April he had developed the "majority" of Sicily's wind farms. He had then sold some of the projects to IVPC for further sale to foreign companies.
All were functioning, he said at the time. His office declined to comment yesterday.
Wednesday, November 11, 2009
Ontario Property Owners Now Have Liens on the Properties due to Skypower Bankruptcy
About 150 properties that make up the Byran wind energy project, part of the failed Skypower Corporation in the northeast corner of Prince Edward County, have had construction liens placed upon their land and registered on title by a creditor to whom Skypower owes a quarter million dollars. Construction liens are legal claims on a project to ensure a builder, tradesperson or consultant gets paid for his or her work.
Worse for the property owners, these construction liens have been perfected through a special court order that was granted last Thursday.
At best this means the property owners will be limited, until the liens are discharged, as to what they can do with their encumbered property. It may be difficult or impossible to refinance mortgages, borrow money using the land as collateral, finance new buildings on the property or even purchase seed and fertilizer for the property as long as the liens remain in place.
At worst the landowners could be on the hook to pay Skypower’s creditor, Jacques Whitford Stantec, the $265,000 it says it is owed by Skypower.
The liens offer a cautionary lesson to those who choose to enter land agreements with developers. But, perhaps the most surprising information to come to light in court docuemnts obtained by the Times is that one of the landowner that appears to be caught up in the bankruptcy of Skypower is the County of Prince Edward. Three properties registered to the municipality are included in the list of properties covered by the construction liens.
The apparent participation of the County in Skypower’s project raises many serious questions: What deal was made between the municipality and Skypower? Why wasn’t this arrangement made public? Who knew about this? When did they know it? What were the financial terms? Are there other deals with other wind energy developers?
And if the municipality is a stakeholder in the Byran project, even in a marginal way, how can it be objective as to the appropriateness of industrial wind energy development in this County? Most County residents believed their municipality to be acting in good faith when it a held a public meeting into wind energy development at the end of September.
Councillor Peter Mertens said he has no knowledge that any municipal property had been optioned, leased or sold to Skypower or to any wind developer. Mayor Leo Finnegan was unavailable for comment. Chief Administrative Officer Dick Shannon did not respond to the Times inquiries by deadline.
THE PROMISE
Skypower first came to local prominence in the summer of 2007. They had been busy for months earlier acquiring options and leases on land primarily north of Picton up to Big Island, as well as around Milford. Until then, much of the wind energy interest had been focused in South Marysburgh. But Skypower’s strategy was to attempt to lock up the electricity transmission capacity by locating close to the largest transmission station in the County. Skypower had high-powered partners including an investment arm of Lehman Brothers, a large U.S. investment bank. When Lehman’s collapsed last fall, Skypower had not only lost a critical financial backer. The subsequent freeze on credit worldwide left the Toronto wind energy prospector in the same boat as its competitors—no capital, no credit but burning cash at a rapid rate.
THE FAILURE
Pretending otherwise, Skypower continued to contract services from Jacques Whitford, an engineering consultancy that would soon merge with Edmonton-based Stantec, to advance the status of the Byran project in Prince Edward County. It had hoped to get the project to such a state of preparedness that it could either be sold or possibly financed.
So it was that on Aug. 11, Skypower public relations representatives were in Picton pitching their project to the local community. They gave no hint as to the company’s troubles. Meanwhile, back in Toronto, Skypower management was busy preparing documents to file for creditor protection. The next morning a court granted them an initial order putting creditors on hold until the business could be refinanced or sold.
THE FALLOUT
Since then a sales process has been underway, dismantling the company into bits and pieces. Skypower’s half-share of the Stone Mills solar array north of Napanee has been sold to a real estate developer, CIM Group, based in Los Angeles.
Twenty-two bids were received for various parts of Skypower’s development business including its leases and options that comprise the Byran project. But none of the bids received are for all of Skypower’s development projects.
So in September Jacques Whitford Stantec registered construction liens against Skypower’s interest in 150 properties in Prince Edward County to ensure it will get paid.
Last week those liens were perfected to establish its priority claim. This is required to validate and extend the claim. Aperfected lien is valid against bona fide purchasers of property, and even against a trustee in bankruptcy.
In effect, these manoeuvres make the purchase price for Skypower’s Byran project higher than it might fetch otherwise. This raises the prospect that Jacques Whitford Stantec may end up as owners of the County wind energy prospect.
Most troubling for landowners is that they may not know their land is encumbered with a lien until they try to sell part or all of it, or erect a new building or use it for collateral on a loan. Even renewing a mortgage may be made more complicated by the presence of the lien. At least one landowner with an agreement with Skypower was unaware of the lien on his property until contacted by the Times last week. Planning Commissioner Gerry Murphy was also unaware of the liens placed on County properties.
If you suspect your land may be encumbered by a Jacques Whitford Stantec lien you can check your property title at the Land Registry Office, 1 Pitt Street, Picton. Online you may visit the Wellington Times website www.wellingtontimes.ca for a link to the list of Stantec Construction Lien Properties.
Worse for the property owners, these construction liens have been perfected through a special court order that was granted last Thursday.
At best this means the property owners will be limited, until the liens are discharged, as to what they can do with their encumbered property. It may be difficult or impossible to refinance mortgages, borrow money using the land as collateral, finance new buildings on the property or even purchase seed and fertilizer for the property as long as the liens remain in place.
At worst the landowners could be on the hook to pay Skypower’s creditor, Jacques Whitford Stantec, the $265,000 it says it is owed by Skypower.
The liens offer a cautionary lesson to those who choose to enter land agreements with developers. But, perhaps the most surprising information to come to light in court docuemnts obtained by the Times is that one of the landowner that appears to be caught up in the bankruptcy of Skypower is the County of Prince Edward. Three properties registered to the municipality are included in the list of properties covered by the construction liens.
The apparent participation of the County in Skypower’s project raises many serious questions: What deal was made between the municipality and Skypower? Why wasn’t this arrangement made public? Who knew about this? When did they know it? What were the financial terms? Are there other deals with other wind energy developers?
And if the municipality is a stakeholder in the Byran project, even in a marginal way, how can it be objective as to the appropriateness of industrial wind energy development in this County? Most County residents believed their municipality to be acting in good faith when it a held a public meeting into wind energy development at the end of September.
Councillor Peter Mertens said he has no knowledge that any municipal property had been optioned, leased or sold to Skypower or to any wind developer. Mayor Leo Finnegan was unavailable for comment. Chief Administrative Officer Dick Shannon did not respond to the Times inquiries by deadline.
THE PROMISE
Skypower first came to local prominence in the summer of 2007. They had been busy for months earlier acquiring options and leases on land primarily north of Picton up to Big Island, as well as around Milford. Until then, much of the wind energy interest had been focused in South Marysburgh. But Skypower’s strategy was to attempt to lock up the electricity transmission capacity by locating close to the largest transmission station in the County. Skypower had high-powered partners including an investment arm of Lehman Brothers, a large U.S. investment bank. When Lehman’s collapsed last fall, Skypower had not only lost a critical financial backer. The subsequent freeze on credit worldwide left the Toronto wind energy prospector in the same boat as its competitors—no capital, no credit but burning cash at a rapid rate.
THE FAILURE
Pretending otherwise, Skypower continued to contract services from Jacques Whitford, an engineering consultancy that would soon merge with Edmonton-based Stantec, to advance the status of the Byran project in Prince Edward County. It had hoped to get the project to such a state of preparedness that it could either be sold or possibly financed.
So it was that on Aug. 11, Skypower public relations representatives were in Picton pitching their project to the local community. They gave no hint as to the company’s troubles. Meanwhile, back in Toronto, Skypower management was busy preparing documents to file for creditor protection. The next morning a court granted them an initial order putting creditors on hold until the business could be refinanced or sold.
THE FALLOUT
Since then a sales process has been underway, dismantling the company into bits and pieces. Skypower’s half-share of the Stone Mills solar array north of Napanee has been sold to a real estate developer, CIM Group, based in Los Angeles.
Twenty-two bids were received for various parts of Skypower’s development business including its leases and options that comprise the Byran project. But none of the bids received are for all of Skypower’s development projects.
So in September Jacques Whitford Stantec registered construction liens against Skypower’s interest in 150 properties in Prince Edward County to ensure it will get paid.
Last week those liens were perfected to establish its priority claim. This is required to validate and extend the claim. Aperfected lien is valid against bona fide purchasers of property, and even against a trustee in bankruptcy.
In effect, these manoeuvres make the purchase price for Skypower’s Byran project higher than it might fetch otherwise. This raises the prospect that Jacques Whitford Stantec may end up as owners of the County wind energy prospect.
Most troubling for landowners is that they may not know their land is encumbered with a lien until they try to sell part or all of it, or erect a new building or use it for collateral on a loan. Even renewing a mortgage may be made more complicated by the presence of the lien. At least one landowner with an agreement with Skypower was unaware of the lien on his property until contacted by the Times last week. Planning Commissioner Gerry Murphy was also unaware of the liens placed on County properties.
If you suspect your land may be encumbered by a Jacques Whitford Stantec lien you can check your property title at the Land Registry Office, 1 Pitt Street, Picton. Online you may visit the Wellington Times website www.wellingtontimes.ca for a link to the list of Stantec Construction Lien Properties.
Tom Stacy Letter to Acconia
To the heads of Acconia-NA departments involving corporate governance, siting guidance and operator safety standards and manuals:
Good morning.
I am a well known wind energy skeptic and activist. My name is Tom Stacy, and I live in Ohio. I have recently received word from numerous land owners in Rushcreek and Jefferson Townships, Logan County, Ohio that your land man has been calling on them. It is from the awareness provided by these citizens that I write to you today.
I also fill a role whenever permitted, with Ohio and federal elected officials, departments of state and with our public utilities group, PUCO and their transmission and generation siting group, OPSB. As an example, I worked closely with the Ohio legislature in developing minimum siting requirements and further considerations that encourage responsible site selection and alternative site analysis. Today my work is to bring into focus the importance of power/land density metrics of wind energy project areas (which also minimize collector line investment). I also lobby to state officials and to wind energy companies that alternative site analysis should play a role inversely proportionate in importance to land-power density in generation facility proposals. in other words, the less steady-state and annual aggregate electricity a facility could reasonably produce on a given unit of land, the more important alternative site selection should be to help reduce impact to existing and future planned land uses.
Of course I am well aware of the investment and production credits, depreciation schedules, tax free bond availabilities and RPS mandates at play, and recognize the percentage of revenue flows resulting from the sale of electricity at market rates falls between 25% and 30% of total revenue flows in the "wind farm" development industry. I do also well understand the technical aspects of ramp rates, heat rates, and the replacement value wind represents for each generation farm technology (coal farms, nuclear farms, OCGT and CCGT farms, hydro dam farms, etc.) in a regional and trans-regional generation mix. I have close ties to energy attorneys on capital hill, to well respected conservative political think tanks, and to numerous engineers in the electricity generation field. My work synthesizes inputs from a wide variety of sources, and generally finds the wind energy business to be a capitalizing on the public's inability to grasp the complex technical and economic foundations of how the industry operates. I then attempt to offer digestible analyses while guarding against my materials being an effective sleep inducer.
I have not studied the capital equipment manufacturing economics and political environment as closely, but am intrigued by your vertically integrated approach to the industry. I believe strongly that domestic industrial manufacturing must rebound for the US to stop the decline of its past global financial and standard of living leadership.
This background is in the interest of full transparency and honest, constructive dialog. The reason I am writing today is to ask you for a full copy of your operations, maintenance and safety manuals for your 1.5 and 3.0 MW turbines. This information would be useful to the state legislature and PUCO staff, as well as to your organization in establishing a pattern and mean of recommended setbacks from various wind turbine manufacturers, and in building an atmosphere of trust between Acconia-NA and the state of Ohio. Should you be willing to comply, I thank you.
Should you choose to deem this requested information "competitively proprietary," may I suggest that with the wind energy industry's incomparable reliance on public sources of revenue for its ongoing existence, a lack of transparency might be inappropriate. I am certain you are aware of the recent actions of the federal government, capping salaries of TARP recipient financial institutions. Those institutions have not been built on the backs of taxpayers, and do not rely on tax dollars for the majority of their revenue the way your industry has and does. It may be well worth your careful consideration that the American taxpayer is increasingly interested in transparency and efficient use of state and federal treasury resources. I pledge that I will do whatever it takes to extend and promote this important ideal.
Thank you for your time and attention to this matter. I look forward to your prompt reply.
Tom Stacy
Good morning.
I am a well known wind energy skeptic and activist. My name is Tom Stacy, and I live in Ohio. I have recently received word from numerous land owners in Rushcreek and Jefferson Townships, Logan County, Ohio that your land man has been calling on them. It is from the awareness provided by these citizens that I write to you today.
I also fill a role whenever permitted, with Ohio and federal elected officials, departments of state and with our public utilities group, PUCO and their transmission and generation siting group, OPSB. As an example, I worked closely with the Ohio legislature in developing minimum siting requirements and further considerations that encourage responsible site selection and alternative site analysis. Today my work is to bring into focus the importance of power/land density metrics of wind energy project areas (which also minimize collector line investment). I also lobby to state officials and to wind energy companies that alternative site analysis should play a role inversely proportionate in importance to land-power density in generation facility proposals. in other words, the less steady-state and annual aggregate electricity a facility could reasonably produce on a given unit of land, the more important alternative site selection should be to help reduce impact to existing and future planned land uses.
Of course I am well aware of the investment and production credits, depreciation schedules, tax free bond availabilities and RPS mandates at play, and recognize the percentage of revenue flows resulting from the sale of electricity at market rates falls between 25% and 30% of total revenue flows in the "wind farm" development industry. I do also well understand the technical aspects of ramp rates, heat rates, and the replacement value wind represents for each generation farm technology (coal farms, nuclear farms, OCGT and CCGT farms, hydro dam farms, etc.) in a regional and trans-regional generation mix. I have close ties to energy attorneys on capital hill, to well respected conservative political think tanks, and to numerous engineers in the electricity generation field. My work synthesizes inputs from a wide variety of sources, and generally finds the wind energy business to be a capitalizing on the public's inability to grasp the complex technical and economic foundations of how the industry operates. I then attempt to offer digestible analyses while guarding against my materials being an effective sleep inducer.
I have not studied the capital equipment manufacturing economics and political environment as closely, but am intrigued by your vertically integrated approach to the industry. I believe strongly that domestic industrial manufacturing must rebound for the US to stop the decline of its past global financial and standard of living leadership.
This background is in the interest of full transparency and honest, constructive dialog. The reason I am writing today is to ask you for a full copy of your operations, maintenance and safety manuals for your 1.5 and 3.0 MW turbines. This information would be useful to the state legislature and PUCO staff, as well as to your organization in establishing a pattern and mean of recommended setbacks from various wind turbine manufacturers, and in building an atmosphere of trust between Acconia-NA and the state of Ohio. Should you be willing to comply, I thank you.
Should you choose to deem this requested information "competitively proprietary," may I suggest that with the wind energy industry's incomparable reliance on public sources of revenue for its ongoing existence, a lack of transparency might be inappropriate. I am certain you are aware of the recent actions of the federal government, capping salaries of TARP recipient financial institutions. Those institutions have not been built on the backs of taxpayers, and do not rely on tax dollars for the majority of their revenue the way your industry has and does. It may be well worth your careful consideration that the American taxpayer is increasingly interested in transparency and efficient use of state and federal treasury resources. I pledge that I will do whatever it takes to extend and promote this important ideal.
Thank you for your time and attention to this matter. I look forward to your prompt reply.
Tom Stacy
Wind farm plan scaled back a bit in Allegany
ALLEGANY - Allegany town residents heard new proposals for a wind-turbine farm that would effectively reduce the number of turbines built by three, and shift their locations to more remote areas in the community.
During Monday’s meeting for the Town of Allegany Planning Board, a gathering of 15 to 20 residents at the Allegany Senior Center heard a short presentation by Kevin Sheen, senior director of development for EverPower Renewables. The New York City-based company has been interested in constructing a wind-turbine farm in the Chipmonk area for the past couple of years and had initially proposed the construction of 32 wind turbines in the community. The new plan calls for the construction of 29 wind turbines.
Mr. Sheen told the board that the new layout of wind turbines would place the towers 2,500 feet from non-contracted landowners’ properties.
“We think this layout addresses some of the concerns” of the landowners along the eastern ridge of the proposed project, Mr. Sheen said. He said several wind turbines initially proposed for the Chipmonk Road area in the northern and southern ridges of the community were taken out of the plans and shifted to the western ridges of the project near Nichols Run.
Mr. Sheen said this area is on property owned by Nichols Run Oil Co.
“What we tried to do is shift some of the northern turfs and southern turfs that might have been closer to homes, and move them into areas that are less populated,” Mr. Sheen said.
He said additional studies, regarding the sound and visual impact the turbines will have on the community, will be conducted and included in the draft environmental-impact study that is expected to be presented to the planning board in January.
Planning board vice chairman Bob Phillips, who moderated the meeting as he will be appointed chairman in 2010, asked Mr. Sheen if a topographical map could be provided to show the turbines’ proximity to the Olean area. Mr. Sheen said maps will be made available. Mr. Sheen also noted, in response to a question, that the turbines would be constructed only in the town of Allegany and aren’t being considered for other towns or communities in the area.
Later in the meeting, John Hare, chairman of the planning board, said a public hearing will be held at 7 p.m. Dec. 7 at the senior center for the town board to consider a proposed wind-energy overlay zone for the Chipmonk area. Carol Horowitz, town planner, said the wind-energy overlay zone would be set on top of an existing zoning district and would effectively give the town board governing power for final approval of the project.
The public hearing also will include a second session for the planning board to consider the proposed elimination of a required 2,500-foot distance of the wind turbines from homes, businesses, schools and hospitals. That proposal has been requested by Gary Abraham of the Concerned Citizens of Cattaraugus County.
Mr. Abraham explained why he and others with the Concerned Citizens group would like to see the 2,500-foot distance requirement for the turbines be removed from the plans.
“If that distance is good enough for those inside (the perimeter of 2,500 feet) than it should be good enough for those (living) outside” the required distance, Mr. Abraham said. “Why would you not want to extend that protection to people who are just outside” the required distance?
“All these Chipmonk residences are just outside that distance,” he said. “We want the town board to change that law.”
(Contact reporter Kate Day Sager at kates_th@yahoo.com)
During Monday’s meeting for the Town of Allegany Planning Board, a gathering of 15 to 20 residents at the Allegany Senior Center heard a short presentation by Kevin Sheen, senior director of development for EverPower Renewables. The New York City-based company has been interested in constructing a wind-turbine farm in the Chipmonk area for the past couple of years and had initially proposed the construction of 32 wind turbines in the community. The new plan calls for the construction of 29 wind turbines.
Mr. Sheen told the board that the new layout of wind turbines would place the towers 2,500 feet from non-contracted landowners’ properties.
“We think this layout addresses some of the concerns” of the landowners along the eastern ridge of the proposed project, Mr. Sheen said. He said several wind turbines initially proposed for the Chipmonk Road area in the northern and southern ridges of the community were taken out of the plans and shifted to the western ridges of the project near Nichols Run.
Mr. Sheen said this area is on property owned by Nichols Run Oil Co.
“What we tried to do is shift some of the northern turfs and southern turfs that might have been closer to homes, and move them into areas that are less populated,” Mr. Sheen said.
He said additional studies, regarding the sound and visual impact the turbines will have on the community, will be conducted and included in the draft environmental-impact study that is expected to be presented to the planning board in January.
Planning board vice chairman Bob Phillips, who moderated the meeting as he will be appointed chairman in 2010, asked Mr. Sheen if a topographical map could be provided to show the turbines’ proximity to the Olean area. Mr. Sheen said maps will be made available. Mr. Sheen also noted, in response to a question, that the turbines would be constructed only in the town of Allegany and aren’t being considered for other towns or communities in the area.
Later in the meeting, John Hare, chairman of the planning board, said a public hearing will be held at 7 p.m. Dec. 7 at the senior center for the town board to consider a proposed wind-energy overlay zone for the Chipmonk area. Carol Horowitz, town planner, said the wind-energy overlay zone would be set on top of an existing zoning district and would effectively give the town board governing power for final approval of the project.
The public hearing also will include a second session for the planning board to consider the proposed elimination of a required 2,500-foot distance of the wind turbines from homes, businesses, schools and hospitals. That proposal has been requested by Gary Abraham of the Concerned Citizens of Cattaraugus County.
Mr. Abraham explained why he and others with the Concerned Citizens group would like to see the 2,500-foot distance requirement for the turbines be removed from the plans.
“If that distance is good enough for those inside (the perimeter of 2,500 feet) than it should be good enough for those (living) outside” the required distance, Mr. Abraham said. “Why would you not want to extend that protection to people who are just outside” the required distance?
“All these Chipmonk residences are just outside that distance,” he said. “We want the town board to change that law.”
(Contact reporter Kate Day Sager at kates_th@yahoo.com)
Developer windfall: $23 million
PILOT AGREEMENT: Galloo Island project PILOT is $2.4 million
The proposed Galloo Island Wind Farm is ready to agree to spend more than $2 million per year as part of a payment-in-lieu-of-taxes agreement, but it stands to save nearly $23 million in other tax abatements.
Officials from the town of Hounsfield, Sackets Harbor Central School District and Jefferson County are firming up their division of a property tax PILOT, which will generate $2.14 million per year.
But developer Upstate NY Power Corp. will save $22.7 million in sales and mortgage recording tax, about $10.5 million of which would have gone to local governments.
Upstate NY Power said in an Oct. 6 application to the Jefferson County Industrial Development Agency that $253 million in the project could be subject to sales and use tax. The sales tax rate in the county is 7.75 percent, which means the developer would save $19,607,500. The county and town of Hounsfield shares of the tax collected would be $9,487,500.
The mortgage recording tax could total $3,093,750, with $1,031,250 going to the town of Hounsfield.
"I don't think there's anything typical about this project," JCIDA Chief Executive Officer Donald C. Alexander said. "The numbers look very different because of the scope of this project. It's the biggest we've ever had, by far."
But, he said, JCIDA uses the tools the law allows for helping development happen.
"This is a consistent approach we would take with any project," he said.
In the application, Upstate NY Power projects it will spend about $500 million to build the wind farm. The application for a mortgage recording and sales tax break agreement for the $153 million transmission line will come later.
The payments from the PILOT may not begin for two or three years.
JCIDA will levy a $1.2 million fee for its role in working on the tax breaks. Some of the fee will cover the cost of the attorneys and consultant who helped develop the PILOT. But most of it will go to the revolving loan fund, which gives low-interest loans to new and expanding businesses.
"Any money we keep here can be re-lent to other projects," Mr. Alexander said.
One county legislator has suggested some of the money from fees or the PILOT go toward capital improvements at Jefferson Community College, Watertown.
Scott A. Gray, R-Watertown, circulated a memo in early October, asking the legislators to consider asking that the JCIDA fee and additional payments from Upstate NY Power go to support the county's share of about $18 million in new and refurbished buildings at the campus.
"There's a need," he said. "This is a difficult time for finding funds in the county budget to support the master plan."
It has not been a subject of PILOT negotiations so far and Mr. Gray is not a member of the county's negotiation team.
"We should be bringing it up with the IDA now or anytime before we approve the PILOT," Mr. Gray said.
Legislature Chairman Kenneth D. Blankenbush, who is part of the county's PILOT team, said the use of the PILOT proceeds should be the second step.
"We're not even going to look at it until the PILOT is agreed to," he said. "What we're working on right now is finding out the distribution rates."
The precedent for directing money toward specific projects would be the PILOT with Residential Communities Initiative on Fort Drum. In that agreement, the county and JCIDA split $5.2 million in payments so that the county keeps $350,000 in each of the seven years for economic development projects and airport infrastructure improvements, while the balance of $380,987 goes to JCIDA, according to Times archives.
"With RCI, it was an agreement with IDA — a side agreement," Mr. Blankenbush said. "It has not really to do with the PILOT."
He said he thought the idea may be part of discussions in the future, especially as the legislators look ahead to the 2011 budget.
Mr. Alexander said he'd be willing to discuss the option with the county, but said the revolving loan fund has been running low with under $1 million.
"Our money is earmarked for economic development," he said. "This money would be absolutely critical to us."
The proposed Galloo Island Wind Farm is ready to agree to spend more than $2 million per year as part of a payment-in-lieu-of-taxes agreement, but it stands to save nearly $23 million in other tax abatements.
Officials from the town of Hounsfield, Sackets Harbor Central School District and Jefferson County are firming up their division of a property tax PILOT, which will generate $2.14 million per year.
But developer Upstate NY Power Corp. will save $22.7 million in sales and mortgage recording tax, about $10.5 million of which would have gone to local governments.
Upstate NY Power said in an Oct. 6 application to the Jefferson County Industrial Development Agency that $253 million in the project could be subject to sales and use tax. The sales tax rate in the county is 7.75 percent, which means the developer would save $19,607,500. The county and town of Hounsfield shares of the tax collected would be $9,487,500.
The mortgage recording tax could total $3,093,750, with $1,031,250 going to the town of Hounsfield.
"I don't think there's anything typical about this project," JCIDA Chief Executive Officer Donald C. Alexander said. "The numbers look very different because of the scope of this project. It's the biggest we've ever had, by far."
But, he said, JCIDA uses the tools the law allows for helping development happen.
"This is a consistent approach we would take with any project," he said.
In the application, Upstate NY Power projects it will spend about $500 million to build the wind farm. The application for a mortgage recording and sales tax break agreement for the $153 million transmission line will come later.
The payments from the PILOT may not begin for two or three years.
JCIDA will levy a $1.2 million fee for its role in working on the tax breaks. Some of the fee will cover the cost of the attorneys and consultant who helped develop the PILOT. But most of it will go to the revolving loan fund, which gives low-interest loans to new and expanding businesses.
"Any money we keep here can be re-lent to other projects," Mr. Alexander said.
One county legislator has suggested some of the money from fees or the PILOT go toward capital improvements at Jefferson Community College, Watertown.
Scott A. Gray, R-Watertown, circulated a memo in early October, asking the legislators to consider asking that the JCIDA fee and additional payments from Upstate NY Power go to support the county's share of about $18 million in new and refurbished buildings at the campus.
"There's a need," he said. "This is a difficult time for finding funds in the county budget to support the master plan."
It has not been a subject of PILOT negotiations so far and Mr. Gray is not a member of the county's negotiation team.
"We should be bringing it up with the IDA now or anytime before we approve the PILOT," Mr. Gray said.
Legislature Chairman Kenneth D. Blankenbush, who is part of the county's PILOT team, said the use of the PILOT proceeds should be the second step.
"We're not even going to look at it until the PILOT is agreed to," he said. "What we're working on right now is finding out the distribution rates."
The precedent for directing money toward specific projects would be the PILOT with Residential Communities Initiative on Fort Drum. In that agreement, the county and JCIDA split $5.2 million in payments so that the county keeps $350,000 in each of the seven years for economic development projects and airport infrastructure improvements, while the balance of $380,987 goes to JCIDA, according to Times archives.
"With RCI, it was an agreement with IDA — a side agreement," Mr. Blankenbush said. "It has not really to do with the PILOT."
He said he thought the idea may be part of discussions in the future, especially as the legislators look ahead to the 2011 budget.
Mr. Alexander said he'd be willing to discuss the option with the county, but said the revolving loan fund has been running low with under $1 million.
"Our money is earmarked for economic development," he said. "This money would be absolutely critical to us."
Tuesday, November 10, 2009
PILOT plans draw outsider comments
A handful of people from outside Hounsfield commented on the proposed Galloo Island Wind Farm payment-in-lieu-of-taxes agreement Monday night.
The PILOT considered at the hearing, held by the Jefferson County Industrial Development Agency, only covers the 84 turbines and ancillary structures on the island and the underwater transmission line in Hounsfield. There will be PILOT negotiations and a public hearing sometime in the future for the part of the 50.6-mile transmission line that runs from Henderson to the town of Mexico.
Wind farms shouldn't qualify for PILOTs, asserted Albert H. Bowers III, Chaumont.
"My understanding is that a PILOT is a reduction in property taxes to entice employment and economic activity," he said. "I don't believe that industrial wind turbines qualify for either."
Instead, he said, wind developers make their money off of tax incentives from federal and state governments.
"I think it's a misuse of the PILOT concept to use the PILOT to encourage a developer who will reach into our pockets at the federal and state level," he said. "All of this comes at our expense."
In its application to JCIDA, Upstate NY Power projected 24 jobs created in the next three years, along with 200 to 250 construction jobs.
JCIDA, using a consultant, devised a two-tier collection on the wind farm PILOT. It would include a base payment of $8,500 per megawatt of rated capacity, plus a supplemental payment based on energy prices, the source of revenue for wind projects. Those supplemental payments would kick in when energy prices top $60 per megawatt, which has happened three out of the past four years.
Clayton Supervisor Justin A. Taylor warned JCIDA that other taxing jurisdictions involved in wind power development may not accept the same system. Clayton and Orleans are the proposed locations for Horse Creek Wind Farm, a 62-turbine development whose application is currently suspended.
Besides the PILOT, Upstate NY Power Corp. asked for a sale-leaseback arrangement with JCIDA. That could save Upstate NY Power about $22.7 million in sales and mortgage recording tax breaks.
A few people talked about the possible harm of the project.
Robert E. Ashodian, Henderson, said the wind farm will hurt property values in Henderson.
"The residents of Henderson will see their very, very brilliant viewshed destroyed by the construction of the project," he said. "There will be a deterioration in our assessed values."
Edward H. DeMattia Jr., Lyme, said, "It will affect me and the value of my property and my neighbors."
County Legislator Barry M. Ormsby, R-Belleville, said local and county officials do understand other towns besides Hounsfield will feel the effects of Galloo Island.
The town of Hounsfield, Sackets Harbor Central School District and Jefferson County will need to approve the PILOT and agree on how they're sharing the proceeds. The base payment for the 252-megawatt project will be about $2.14 million.
Representatives of the town and county said Monday they have a tentative agreement, but would not talk about the specifics.
Before the hearing, town Supervisor Martin A. DelSignore said the Town Council may discuss the PILOT as soon as Thursday. County administrator Robert F. Hagemann III said he expects the town and school district to act on the full agreement before the county Board of Legislators votes on the action.
"Without local approval, it doesn't make sense to have the more macro-level approvals first," he said.
The JCIDA board will consider the PILOT at its next meeting, 8 a.m. Dec. 3 at the Watertown Center for Business and Industry.
The PILOT considered at the hearing, held by the Jefferson County Industrial Development Agency, only covers the 84 turbines and ancillary structures on the island and the underwater transmission line in Hounsfield. There will be PILOT negotiations and a public hearing sometime in the future for the part of the 50.6-mile transmission line that runs from Henderson to the town of Mexico.
Wind farms shouldn't qualify for PILOTs, asserted Albert H. Bowers III, Chaumont.
"My understanding is that a PILOT is a reduction in property taxes to entice employment and economic activity," he said. "I don't believe that industrial wind turbines qualify for either."
Instead, he said, wind developers make their money off of tax incentives from federal and state governments.
"I think it's a misuse of the PILOT concept to use the PILOT to encourage a developer who will reach into our pockets at the federal and state level," he said. "All of this comes at our expense."
In its application to JCIDA, Upstate NY Power projected 24 jobs created in the next three years, along with 200 to 250 construction jobs.
JCIDA, using a consultant, devised a two-tier collection on the wind farm PILOT. It would include a base payment of $8,500 per megawatt of rated capacity, plus a supplemental payment based on energy prices, the source of revenue for wind projects. Those supplemental payments would kick in when energy prices top $60 per megawatt, which has happened three out of the past four years.
Clayton Supervisor Justin A. Taylor warned JCIDA that other taxing jurisdictions involved in wind power development may not accept the same system. Clayton and Orleans are the proposed locations for Horse Creek Wind Farm, a 62-turbine development whose application is currently suspended.
Besides the PILOT, Upstate NY Power Corp. asked for a sale-leaseback arrangement with JCIDA. That could save Upstate NY Power about $22.7 million in sales and mortgage recording tax breaks.
A few people talked about the possible harm of the project.
Robert E. Ashodian, Henderson, said the wind farm will hurt property values in Henderson.
"The residents of Henderson will see their very, very brilliant viewshed destroyed by the construction of the project," he said. "There will be a deterioration in our assessed values."
Edward H. DeMattia Jr., Lyme, said, "It will affect me and the value of my property and my neighbors."
County Legislator Barry M. Ormsby, R-Belleville, said local and county officials do understand other towns besides Hounsfield will feel the effects of Galloo Island.
The town of Hounsfield, Sackets Harbor Central School District and Jefferson County will need to approve the PILOT and agree on how they're sharing the proceeds. The base payment for the 252-megawatt project will be about $2.14 million.
Representatives of the town and county said Monday they have a tentative agreement, but would not talk about the specifics.
Before the hearing, town Supervisor Martin A. DelSignore said the Town Council may discuss the PILOT as soon as Thursday. County administrator Robert F. Hagemann III said he expects the town and school district to act on the full agreement before the county Board of Legislators votes on the action.
"Without local approval, it doesn't make sense to have the more macro-level approvals first," he said.
The JCIDA board will consider the PILOT at its next meeting, 8 a.m. Dec. 3 at the Watertown Center for Business and Industry.
Monday, November 09, 2009
Schumer Calls for Review as Millions in Stimulus Funds Aid Foreign Firms
Sen. Charles Schumer called for a "comprehensive" review on Monday of all renewable energy projects seeking funding from the economic stimulus package, following reports that $849 million in U.S. grants have gone to foreign wind companies in the past two months alone.
The New York Democrat first intervened last week, writing a letter to Energy Secretary Steven Chu urging him to deny stimulus funding to a Texas wind farm that would rely on wind turbines made in China. The $1.5 billion project would create up to 3,000 jobs in China but only 330 jobs in the United States, most of which would be temporary, according to one report.
Schumer spokesman Josh Vlasto told FoxNews.com that the senator is calling for a review of "all pending green energy projects" seeking stimulus funds to ensure they create jobs in the United States.
Schumer said in a statement Monday that the United States should not be giving China a "head start" in the quest for alternative sources of energy.
"Our domestic clean-energy sector has the potential to emerge as a global leader and it is counterproductive to invest U.S. stimulus funds in Chinese companies rather than our own," Schumer said.
A study in late October out of American University's Investigate Reporting Workshop showed that the Texas wind farm was just one example of U.S. stimulus dollars being channeled overseas.
The study said that of the $1.05 billion in clean energy grants distributed since Sept. 1, $849 million has gone to foreign wind companies. The study said there are few restrictions on the money.
The federal program provides for grants worth 30 percent of a firm's investment in renewable energy. According to Schumer's office, the American and Chinese companies working on the Texas farm would seek to defray up to that amount, or $450 million, with stimulus funds.
The companies are China's Shenyang Power Group, Texas' Cielo Wind Power and the U.S. Renewable Energy Group.
Chris Madison, spokesman for the U.S. industry's American Wind Energy Association, said wind projects should be using U.S. components.
"We think it's better when it's domestically manufactured. For one thing it's cheaper," he said.
But Madison said the Texas farm is an "exception" to the trend and that the American University study was exaggerated. He said that even though the government money is going toward foreign firms, many of those firms are using U.S. plants and U.S. workers.
Christine Real De Azua, spokeswoman at the same group, said the U.S. has come from way behind in its capacity to build wind turbines domestically and that U.S. firms certainly could have handled the Texas project. But she said the fact that the Texas farm was being financed by Chinese banks clearly came with "strings attached."
Overall, she said, the stimulus program has been "very effective" in growing the alternative energy sector in the United States.
The U.S. Department of Energy claimed it has limited flexibility in determining who gets the grant money. Department spokeswoman Stephanie Mueller said in an e-mail to FoxNews.com that the grants come in the form of tax credits, "unlike other Recovery Act grant programs where the department has some flexibility in making awards."
She said if the eligibility requirements are met, "they receive the tax credit."
"Any application for the Texas project would be evaluated by the Energy and Treasury Departments to determine eligibility, but no application has been received to date," she said.
In a statement released in late October announcing the 600-megawatt, 36,000-acre Texas farm, the companies working on the project claimed it would be mutually beneficial.
"This planned $1.5 billion investment in wind energy will spur tremendous growth in the renewable energy sector and directly create hundreds of high-paying American jobs," the Renewable Energy Group's Cappy McGarr said in the statement.
The statement praised Shenyang as a "fast-growing manufacturer of wind turbines."
But in his letter to Chu, Schumer said the U.S. wind industry is "fully capable" of producing wind turbines and "other high-value components" and that stimulus-funded farms should be buying American.
"The idea that stimulus funds would be used to create jobs overseas is quite troubling," Schumer wrote.
The New York Democrat first intervened last week, writing a letter to Energy Secretary Steven Chu urging him to deny stimulus funding to a Texas wind farm that would rely on wind turbines made in China. The $1.5 billion project would create up to 3,000 jobs in China but only 330 jobs in the United States, most of which would be temporary, according to one report.
Schumer spokesman Josh Vlasto told FoxNews.com that the senator is calling for a review of "all pending green energy projects" seeking stimulus funds to ensure they create jobs in the United States.
Schumer said in a statement Monday that the United States should not be giving China a "head start" in the quest for alternative sources of energy.
"Our domestic clean-energy sector has the potential to emerge as a global leader and it is counterproductive to invest U.S. stimulus funds in Chinese companies rather than our own," Schumer said.
A study in late October out of American University's Investigate Reporting Workshop showed that the Texas wind farm was just one example of U.S. stimulus dollars being channeled overseas.
The study said that of the $1.05 billion in clean energy grants distributed since Sept. 1, $849 million has gone to foreign wind companies. The study said there are few restrictions on the money.
The federal program provides for grants worth 30 percent of a firm's investment in renewable energy. According to Schumer's office, the American and Chinese companies working on the Texas farm would seek to defray up to that amount, or $450 million, with stimulus funds.
The companies are China's Shenyang Power Group, Texas' Cielo Wind Power and the U.S. Renewable Energy Group.
Chris Madison, spokesman for the U.S. industry's American Wind Energy Association, said wind projects should be using U.S. components.
"We think it's better when it's domestically manufactured. For one thing it's cheaper," he said.
But Madison said the Texas farm is an "exception" to the trend and that the American University study was exaggerated. He said that even though the government money is going toward foreign firms, many of those firms are using U.S. plants and U.S. workers.
Christine Real De Azua, spokeswoman at the same group, said the U.S. has come from way behind in its capacity to build wind turbines domestically and that U.S. firms certainly could have handled the Texas project. But she said the fact that the Texas farm was being financed by Chinese banks clearly came with "strings attached."
Overall, she said, the stimulus program has been "very effective" in growing the alternative energy sector in the United States.
The U.S. Department of Energy claimed it has limited flexibility in determining who gets the grant money. Department spokeswoman Stephanie Mueller said in an e-mail to FoxNews.com that the grants come in the form of tax credits, "unlike other Recovery Act grant programs where the department has some flexibility in making awards."
She said if the eligibility requirements are met, "they receive the tax credit."
"Any application for the Texas project would be evaluated by the Energy and Treasury Departments to determine eligibility, but no application has been received to date," she said.
In a statement released in late October announcing the 600-megawatt, 36,000-acre Texas farm, the companies working on the project claimed it would be mutually beneficial.
"This planned $1.5 billion investment in wind energy will spur tremendous growth in the renewable energy sector and directly create hundreds of high-paying American jobs," the Renewable Energy Group's Cappy McGarr said in the statement.
The statement praised Shenyang as a "fast-growing manufacturer of wind turbines."
But in his letter to Chu, Schumer said the U.S. wind industry is "fully capable" of producing wind turbines and "other high-value components" and that stimulus-funded farms should be buying American.
"The idea that stimulus funds would be used to create jobs overseas is quite troubling," Schumer wrote.
Just Energy Will Purchase Wind RECs Iberdrola Wind Farms In New York
Under a five-year agreement with Iberdrola Renewables, Just Energy has announced that it will purchase renewable energy certificates (RECs) sourced from a variety of wind farms in New York state.
Just Energy has also announced a financial swap arrangement with Iberdrola Renewables that will further enable Just Energy to provide fixed-price electricity programs to customers for terms of up to five years. This transaction locks in price stability for Just Energy's power offerings through a financial swap for energy with Iberdrola Renewables.
The New York wind RECs and the transaction are exclusive to the physical energy from the wind facilities. The entire agreement enables Just Energy to provide an option for consumers to support wind energy.
SOURCE: Just Energy
Just Energy has also announced a financial swap arrangement with Iberdrola Renewables that will further enable Just Energy to provide fixed-price electricity programs to customers for terms of up to five years. This transaction locks in price stability for Just Energy's power offerings through a financial swap for energy with Iberdrola Renewables.
The New York wind RECs and the transaction are exclusive to the physical energy from the wind facilities. The entire agreement enables Just Energy to provide an option for consumers to support wind energy.
SOURCE: Just Energy
Saturday, November 07, 2009
Towns want state rules for wind turbines
LARENDON — Legislation regulating the placement of wind turbines around the state ought to be considered by lawmakers during the next legislative session.
That was the main message delivered to Rutland County senators and representatives during a two-hour meeting on Wednesday at the Clarendon Grange Community Center.
Municipal officials, townspeople and residents from the neighboring communities of Tinmouth, Ira, Danby, Shrewsbury and West Rutland attended the meeting as did Rutland County Sens. Hull Maynard, William Carris and Kevin Mullin.
Reps. David Potter, D-Clarendon, Joseph Baker, R-West Rutland, and Eldred French, D-Shrewsbury were also there.
Legislation should include "a set of criteria" dictating where wind turbines ought to be sited with health risks, noise implications, public investments, aesthetics and other issues of concern addressed, according to Clarendon Select Board Chairman Michael Klopchin.
New laws regarding wind turbines should also consider local rules and regulations established in municipal zoning and planning ordinances, he said.
Klopchin explained the three-member state Public Service Board issued Vermont Community Wind Farm a certificate of public good allowing the company to install a meteorological testing tower on Susie's Peak despite local zoning that would have prohibited the structure.
The tower was erected to collect weather data as part of VCWF's plans for an 80-megawatt wind facility in Clarendon, Ira and other towns.
"We have three people who are appointed not elected with six-year terms — longer than any legislator or governor — making decisions for towns on a project that will impact the region for generations," Klopchin said.
The board chairman indicated the state ought to expand the PSB panel to a five- or seven-member board comprising citizens from varying districts around the state elected by voters from each district.
"If you have elected representatives, they would be more inclined to listen to the people who elected them," Klopchin said.
While there was some discussion on the topic, several people agreed legislation guiding the location of towers was a priority.
Potter responded he had sent an item to legislative counsel for review that would address many of those concerns. However, he noted any bill would likely be considered by the House Natural Resources and Energy committee, which he said had its hands full with Vermont Yankee and Hydro Quebec issues.
"There will be an attempt this session to put this on the table," Potter said.
Klopchin urged all legislators to "work hard to pass laws" during the coming year. "Many hands make light work," he said.
In other business, legislators were urged to consider ways to improve the state's education funding system in order to reduce the property tax burden on citizens.
Lawmakers were also encouraged to support town highway and bridge maintenance programs and find ways to streamline state highway grants to municipalities.
That was the main message delivered to Rutland County senators and representatives during a two-hour meeting on Wednesday at the Clarendon Grange Community Center.
Municipal officials, townspeople and residents from the neighboring communities of Tinmouth, Ira, Danby, Shrewsbury and West Rutland attended the meeting as did Rutland County Sens. Hull Maynard, William Carris and Kevin Mullin.
Reps. David Potter, D-Clarendon, Joseph Baker, R-West Rutland, and Eldred French, D-Shrewsbury were also there.
Legislation should include "a set of criteria" dictating where wind turbines ought to be sited with health risks, noise implications, public investments, aesthetics and other issues of concern addressed, according to Clarendon Select Board Chairman Michael Klopchin.
New laws regarding wind turbines should also consider local rules and regulations established in municipal zoning and planning ordinances, he said.
Klopchin explained the three-member state Public Service Board issued Vermont Community Wind Farm a certificate of public good allowing the company to install a meteorological testing tower on Susie's Peak despite local zoning that would have prohibited the structure.
The tower was erected to collect weather data as part of VCWF's plans for an 80-megawatt wind facility in Clarendon, Ira and other towns.
"We have three people who are appointed not elected with six-year terms — longer than any legislator or governor — making decisions for towns on a project that will impact the region for generations," Klopchin said.
The board chairman indicated the state ought to expand the PSB panel to a five- or seven-member board comprising citizens from varying districts around the state elected by voters from each district.
"If you have elected representatives, they would be more inclined to listen to the people who elected them," Klopchin said.
While there was some discussion on the topic, several people agreed legislation guiding the location of towers was a priority.
Potter responded he had sent an item to legislative counsel for review that would address many of those concerns. However, he noted any bill would likely be considered by the House Natural Resources and Energy committee, which he said had its hands full with Vermont Yankee and Hydro Quebec issues.
"There will be an attempt this session to put this on the table," Potter said.
Klopchin urged all legislators to "work hard to pass laws" during the coming year. "Many hands make light work," he said.
In other business, legislators were urged to consider ways to improve the state's education funding system in order to reduce the property tax burden on citizens.
Lawmakers were also encouraged to support town highway and bridge maintenance programs and find ways to streamline state highway grants to municipalities.
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