The fate of the proposed Alle-Catt Wind Farm may hinge on whether payments in lieu of tax (P.I.L.O.T.) agreements can be negotiated with the developer and three industrial development agencies.
Invenergy, the Chicago-based energy company proposing the Alle-Catt Wind Farm in five towns in Cattaraugus, Allegany and Wyoming counties, wants to site 108 nearly 600-foot-tall wind turbines to generate 380 megawatts of electricity — enough to power 148,000 homes.
The cost is expected to be between $500 million and $600 million.
The proposed turbines would be located in Farmersville and Freedom in Cattaraugus County, Rushford and Centerville in Allegany County and Arcade in Wyoming County.
In Cattaraugus County, the Freedom Town Board has approved a local law sought by the developer and the Farmersville Town Board will hold a public hearing Aug. 13 on its proposed local law modeled after the Freedom law.
Invenergy would like to make an application this fall with the New York State Board on Electric Generation Siting and the Environment.
According to Corey Wiktor, executive director of the Cattaraugus County Industrial Development Agency, the IDA hasn’t received an application for a P.I.L.O.T. from Invenergy for the turbines proposed in Freedom and Farmersville.
Invenergy has proposed 35 turbines in Freedom, 24 in Farmersville, 28 in Centerville and 11 in Rushford. P.I.L.O.T. payments to the three counties, five towns and eligible school districts would total $1.9 million a year.
Host community agreements to towns would add up to $1.1 million a year, plus $200,000 for fire districts and $2.7 million for lease payments to host and neighboring landowners.
A P.I.L.O.T. is key to any wind turbine project in New York, Wiktor said — especially if the county and school districts involved have “opted out” of Section 487 of the Property Tax Law. Section 487 make solar and wind projects exempt from property taxes for 15 years — unless municipalities opt out.
Cattaraugus County and all its school districts opted out of Section 487 several years ago. Some municipalities also opted out. Farmersville and Freedom were not among them. The county’s opting out is expected to extend the P.I.L.O.T. to the towns.
The big difference between the proposed Alle-Catt Wind Farm and the Allegany Wind project the IDA approved several years ago is the state Board on Electric Generation Siting and the Environment, said Wiktor. The town board had approved the project, although it was never built.
The new state siting board can overrule local governments in terms of the projects. It’s called Article 10.
“From what I’ve heard, they would like to obtain a P.I.L.O.T.,” Wiktor said of the Alle-Catt developer.
Wiktor said he thought the IDA board of directors would be less likely to approve a P.I.L.O.T. if the siting board was making the determination instead of a town board.
The IDA would probably take into account the sentiments of residents as well, Wiktor indicated.
Opposition groups — Freedom United and Farmersville United — formed after residents got a look at where the turbines were proposed to be located. Each has more than 200 members.
Sincere local opposition in the face of a narrow approval by the town board would give IDA members something to think about, Wiktor said.
“I think the board would have to take a sincere look at the whole project to see if it were truly wanted at the local level,” Wiktor said. “It’s an issue the IDA will have to face. It’s going to come down to what do they hear in terms of local support and opposition.”
With Article 10, a project could be approved with limited or no local support.
With severe opposition at the local level, the IDA board would have to decide where its allegiance lies. Wiktor said the board’s allegiance is local, “first and foremost.”
P.I.L.O.T. agreements would only cover municipalities in the county the IDA was authorized to operate in. In other words, the Cattaraugus County IDA could not approve a P.I.L.O.T for a municipality in another county.
“If one county doesn’t approve a P.I.L.O.T., that would play a big difference in the economics,” Wiktor said. Without a P.I.L.O.T., the turbines would be taxed at full value.
“Under Section 487, they are eligible for tax exemption if the county and school districts do not opt out,” Wiktor said. “They would have to pay their fair share of the property taxes.”
To be part of a P.I.L.O.T., municipalities would have to opt out of Section 487. If no municipalities opt out, the project would be tax exempt. A developer could do a project without a P.I.L.O.T., but their property tax bill would be in the millions.
“We’re paying attention to be prepared should we be asked to approve a P.I.L.O.T.,” Wiktor said. The IDA will be looking for local support of the project. “I have yet to hear anyone come to us with that support.”
Wiktor said there is an important revenue stream for farmer, other landowners and municipalities from the project, but other support “has been limited.”
This begs the question, he said of whether there is enough local support “for our board to be comfortable” in agreeing to a P.I.L.O.T. “If a project doesn’t have a lot of support and doesn’t help financially, who are we to say it’s good for them?”
Thomas Buffamante, IDA board chairman, said it was “premature to speculate” what the IDA would do before receiving an application for a P.I.L.O.T. “If it ever gets to us, we will have our own public hearing, weigh in on the comments and decide what we want to do.”
Buffamante said, “We haven’t discussed it at the IDA level. It’s highly controversial.”
Joseph Snyder, a member of the IDA board, was less charitable about wind energy projects.
“They get a 40 percent subsidy,” he said. “I think it’s a great tax scam. … My position is not very favorable. It’s so heavily subsidized to make the numbers. My philosophy is not very in favor of this.”
The IDA will have to make a judgement whether the residents want it or not, Snyder said.
“It would be easier to support if the biz model supported itself,” he said. “If we’ve got the right to say yes, we’ve got the right to say no.”