September 24, 2008

Local Law Will Allow Tax on Alternative Energy Systems

By Karthy Kellogg

Cattaraugus County has retained its ability to tax alternative energy systems -- including wind farms, solar energy systems and on- farm methane digesters -- with a 16-2 vote for passage of a local law Tuesday.

The law applies to facilities within the county, including as many as four potential wind farm projects under consideration, and effectively disarms a state tax code provision exempting these energy sources from taxes.

The Cattaraugus County Legislature's action, termed an "opt out" measure, follows similar resolutions adopted by almost all the school district boards in the county, and officials say these steps could affect the economic viability of the projects and send wind farm developers to the Cattaraugus County Industrial Development Agency seeking financial assistance and incentives.

The vote came after residents and elected officials from the towns of Freedom, Machias and Farmersville stated their opposition in a 45-minute public hearing. Most said they were told the IDA's payment-in-lieu-of-taxes (PILOT) agreements will unfairly take a share of the wind farms' monetary payments.

"The people of these towns are going to see the monetary value of their property and the aesthetic quality of their life eroded. They want something of value in return. The people signed an agreement to give them 80 percent of what these projects are making, and we consider it a fair trade. This is not fair in any way," said Jim Whitaker of the Freedom Town Planning Board, which has just completed a draft of a host community licensing agreement for Noble Environmental Power that spells out a host benefit package for a wind farm spanning Freedom and Farmersville.

Carmen Vecchiarella, D-Salamanca, told the town representatives that the situation is similar to the state's negotiations to divide the proceeds of slot machine revenues from the casino. He advised them to use their bargaining power to negotiate a better deal.

Jerry E. Burrell, R-Franklinville, told the group he views the local law as a positive move to protect all the county residents.

"We have many [wind projects], three and possibly four. The IDA is chosen by the developers and the IDA gets one-sixteenth of the [project value], the landowner negotiates their own rights with the developer, and the host monies have nothing to do with the IDA. You as town officials deal with the developer and you squeeze that orange, and that is the lion's share," Burrell said.

After the meeting, James L. Boser, D-Allegany, whose town officials are also considering a wind farm proposal from Everpower, said he was satisfied that the matter was thoroughly discussed. Joseph C. McLarney, R-Portville, said he agreed the law should be passed because the wind farm projects will create impacts and the need for county services in other locations besides the host towns.

"We say we have to be included at the table," McClarney said.

Freedom Town Board member Warren Schmidt commented after the meeting that the law may not close the door on Noble Environmental's project but said his board will be looking at the financial numbers in the coming days.

Originally published by CATTARAUGUS CORRESPONDENT.

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