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 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.

Money doesn't grow on trees, but it may grow on windmills. The developers of the four proposed wind farms in Jefferson County could capitalize on tax breaks and incentives at the federal, state and local levels through their projects. Opponents say the subsidies take taxpayer money and give it to those who already are rich. "It's the taxpayers and electric customers that are taken to the cleaners," said Glenn R. Schleede, a widely known wind power opponent who has worked for electric utilities and the federal Office of Management and Budget.

At Tuesday's Board of Education meeting at Jefferson Middle School, school officials decided to opt out of Section 487 of the Real Property Tax Law after hearing from Bill Daly and Rich Dixon of the Chautauqua County Industrial Development Agency. The law makes the installation of energy improvement systems - solar power, windmills - exempt from taxes. By opting out, the district is placing the IDA in charge of negotiations regarding alternative energy should a company wants to develop wind energy in the county, Daly said. The IDA will be responsible for negotiating tax agreements for the county, city, towns and school districts.

For the first five years, starting with last year, the 195-turbine wind farm's payments are primarily based on the actual amount that would be paid in taxes on the 140 Phase I turbines. Since the assessed value of the turbines is essentially fixed, a drop in combined tax rates would ultimately result in a smaller payment. Assuming the other major wind farm beneficiaries - the county and towns of Martinsburg and Harrisburg - choose to keep their levies stable, as well, the payment amount will certainly decrease, Mr. McAuliffe said. However, the extent won't be known until county and town tax rates are set in late fall, he said.

The Westfield and Ripley school districts, as well as some municipalities such as the town of Portland, have chosen to opt out of the tax exempt status wind energy developers are eligible to receive. "Wind farms fall under some tax exemption which taxing jurisdictions can reject (opt out of)," Peter Gross of Babcock and Brown explained. "This requires that we get a PILOT (payment in lieu of taxes) agreement with the county, otherwise our assets would be assessed at their full value, resulting in a tax payment that would kill the project economics.

The Cattaraugus County Legislature will decide Wednesday whether to spend $25,000 on a law firm to help negotiate payments from future wind farm developers within the county. Several lawmakers have stated they hope to keep the Cattaraugus County Industrial Development Agency from collecting a percentage of a project worth several hundred millions of dollars, and several said they first want to meet with lawyers in person before agreeing to a contract. The requested $50,000 appropriation was halved after the Finance Committee amended the legislation during the initial round of discussion last Wednesday.

A disagreement over the terms of a tax deal for a windfarm development in Prattsburgh will apparently have to be settled in court. The Steuben County Industrial Development Agency refused to change the terms of a payment-in-lieu-of-taxes agreement Thursday for a 36-turbine project by First Wind, formerly known as UPC. Attorneys for the Prattsburgh and Naples school districts requested a renegotiation, claiming the company should be paying hundreds of thousands of dollars more in taxes. The tax agreement involves First Wind paying a fixed amount to the school districts, the town of Prattsburgh and the county over a 20-year period.

A disagreement over the terms of a tax deal for a windfarm development in Prattsburgh will apparently have to be settled in court. The Steuben County Industrial Development Agency refused to change the terms of a payment-in-lieu-of-taxes agreement Thursday for a 36-turbine project by First Wind, formerly known as UPC. Attorneys for the Prattsburgh and Naples school districts requested a renegotiation claiming the company should be paying hundreds of thousands of dollars more in taxes. ...The Prattsburgh school district is being shorted about $1 million, school attorneys claim.

As Jefferson County, towns and school districts continue negotiations on splitting wind power development payments in lieu of taxes, towns have asked for an even larger piece of the pie than an earlier suggestion that included a host community agreement. ...According to a spreadsheet obtained by a Freedom of Information request from the Jefferson County administrator's office, the town of Clayton offered numbers in which towns would receive 47.5 percent, schools would receive 37.5 percent and the county would receive 15 percent of any tax break money.

[T]he City Council approved a payment-in-lieu-of- taxes agreement for Steel Winds II, the second phase of the wind energy development on the former Bethlehem site. The agreement covers each of the proposed 13 turbines for 15 years, beginning when each is put into place. The payment will be based on $10,000 per megawatt for the 32.5 megawatts expected to be produced. ...A significant change in the new agreement is the inclusion of the school district and Erie County in the disbursement of PILOT monies. Neither was included in the original agreement...

Aside from Wyoming County, there are 62 other wind energy projects proposed across the state, according to the New York Independent System Operator. They include plans by Massachusetts-based First Wind (UPC Wind) for two projects in Ontario County and one in Genesee County; a 120-megawatt wind farm in Orleans County by Airtricity Inc. of Ireland; and a 75-megawatt wind farm in Genesee County by Tonawanda Creek Wind LLC. ...Fanning all this wind farm activity is the federal government's renewable energy production tax credit of about 2 cents per kilowatt-hour, said Thomas Drennen, a professor of economics and environmental studies at Hobart and William Smith Colleges in Geneva.

Just how tax payments from a windfarm development in Prattsburgh should be divided was argued this week before Supreme Court Judge Peter Bradstreet. No decision was made in a lawsuit filed by the Prattsburgh and Naples school districts against a payment-in-lieu of taxes agreement approved by the Steuben County Industrial Development Agency in January. No decision on the claim was made and Bradstreet's office said there is no timetable when a ruling will be made. ...But Premo said the town agreement was frequently referred to in discussions and documents setting up the PILOT. "This was structured in a way to divert money away from the districts," Premo said. "There is no indication they will do anything differently (in May)."

Has the controversy over wind power blown away in Howard? Fewer than 20 residents came out to a Steuben County Industrial Development Agency hearing Thursday evening on a proposed Payment In Lieu of Taxes Agreement with EverPower Renewables, a New York-based company planning to build 25 wind turbines south of Howard. Two people made comments to SCIDA Executive Director James Sherron. ...In exchange for the tax breaks, EverPower will sign on for a 20-year payment plan to give funds to the Town of Howard - which will receive 24 percent - the Canisteo-Greenwood Central School District will get nearly 60 percent and Steuben County the rest.

Two school districts claim they won't get their fair share of tax payments from a wind farm development planned for the Prattsburgh area. Charging deliberate attempts to prevent them from receiving proper payments, two local school districts filed lawsuits recently against the town of Prattsburgh and Steuben County Industrial Development Agency, and other agencies. The lawsuits filed by both the Prattsburgh and Naples school districts allege the payment-in-lieu-of-taxes agreement for the yet-to-be-built 36-turbine wind farm project creates a significant loss in anticipated revenues for the schools. Both districts want the tax agreement thrown out.

For counties with wind farm development, there's no one way to slice the pie of tax-break agreements. As town, school district and county officials in Jefferson County look around the state for guidance in dividing money for tax-break agreements with local wind farms, they won't get much help. Across New York, there are at least four wind farms with some sort of tax-break agreement. Some relied on tax distribution to indicate how to divide the money, while others weighted towns heavily.

Two local school district claim they aren't getting their fair share of tax payments from a wind farm development in the Prattsburgh area. Charging deliberate attempts to prevent them from receiving proper payments, two local school districts filed lawsuits recently against the Town of Prattsburgh and Steuben County Industrial Development Agency, and other agencies. The lawsuits filed by both the Prattsburgh and Naples school districts allege the payment-in-lieu-of-taxes agreement for the 36-turbine wind farm project creates a significant loss in anticipated revenues for the schools.

Town officials convinced that wind farms are coming to Jefferson County are jockeying to see if they can divert millions of dollars in potential tax revenue to their governments and away from school districts, which generally would receive the majority of taxes raised from the creation of each turbine. In an average payment-in-lieu-of-taxes (PILOT) agreement, school districts can expect to receive from 50 percent to 60 percent of property taxes from any given property owner. Jefferson County would receive the next-highest amount and towns would get the least. ...Using the Thousand Islands district numbers, if a deal followed a normal PILOT agreement, the school districts could expect about $570,000, the county $370,000 and the towns $60,000.

The pros and cons of wind power will be on the minds of many Herkimer County residents as officials move forward with tax negotiations for two projects proposed in the county. County officials have been in talks for a payment in lieu of taxes agreement for the Hard Scrabble Wind Farm planned for the towns of Fairfield and Norway. The Jordanville Wind project designed for the towns of Warren and Stark also has been brought into the discussions in recent weeks, county Administrator James Wallace said.

Supervisors from towns with wind projects want to see host community agreements in their towns as a part of any tax breaks for wind power developers. The Jefferson County Board of Legislators heard from the county's counsel on negotiations, Kevin R. McAuliffe, Tuesday night. He advocated negotiating only payment-in-lieu-of-taxes agreements. But the supervisors want to see PILOT and host community agreements. "We think it's only fair," Hounsfield Supervisor Jean H. Derouin said. "We have the legal expertise to make it a binding contract.

Jefferson County's counsel on negotiations with wind farm developers told the Board of Legislators that a payment-in-lieu-of-taxes agreement through the Industrial Development Agency would be preferable to a host-community agreement for the disbursement of any funds from the developers. "Host-community payments don't have any statutory basis," attorney Kevin R. McAuliffe said during a presentation to legislators Tuesday. "Aren't we better off going with an agreement that is enforceable and has meaningful economic expectations?" Mr. McAuliffe, Syracuse, was retained in November after helping Lewis County with its PILOT negotiations with wind power developers. First, he reminded legislators that no wind farms would develop without granting tax breaks to the developers.