Articles filed under Taxes & Subsidies from New York
When tax breaks for wind projects expire, will municipalities receive full property taxes to which they’re entitled? That’s a murky question that will have to be resolved soon for a seven-turbine, 11.5-megawatt wind project in Madison County, which benefited from a 15-year payment-in-lieu-of-taxes agreement that will end in 2016. ...The company (EDP Renewables) has said it can’t afford more than the $60,000 per year it paid under the PILOT agreement, Mr. Harris said.
It appears wind projects will be scrapped from a controversial section on renewable energy in a draft version of a Uniform Tax Exemption Policy being developed by the Jefferson County Industrial Development Agency. Taxing jurisdictions, as a result, would continue to vote on tax breaks for wind projects considered by the agency.
IDA board member Scott A. Gray, a county legislator representing District 13 who is a member of the IDA board of directors, said he believes the IDA’s attempt to exclude taxing jurisdictions from the PILOT approval process for renewable energy projects was motivated directly by the Galloo Island wind project. He contended the move is designed to ensure that the county Board of Legislators doesn’t have the chance to reject a proposed PILOT for the project.
The Somerset Town Board recently sent a survey to residents regarding whether or not Apex, a multi-billion-dollar, out-of-state limited liability corporation, should be allowed to build a sprawling, 570-foot-tall industrial wind factory amongst the homes of those living in Somerset and Yates.
The Clean Energy Fund is one of Cuomo's signature energy initiatives, a 10-year, $5 billion plan funded by surcharges on electric bills. The program would replace current programs like the System Benefits Charge, the Energy Efficiency Portfolio Standard, and the Renewable Portfolio Standard, all of which are to expire this year.
The production tax credits for renewable energy projects expired at the end of 2013 and haven't yet been renewed. The delay is causing more renewable energy developers to focus on international projects.
At midnight Tuesday, with little fanfare, the production tax credit for wind energy expired. And according to the majority of knowledgeable observers, it is likely to remain dead at least through the coming Congress, since the Republican House of Representatives has little appetite for alternative-energy subsidies.
“Poor economic conditions, coupled with regulatory uncertainty at the federal and state level, have limited wind development at many projects across the country, including ours here in Jefferson County,” project manager Jenny L. Briot said in her recent letter to Clayton Town Supervisor Justin A. Taylor. In December, the developer notified the state Public Service Commission of its intent to seek a state Article X siting review.
The lesson of the Galloo tax deal should be clear in the minds of county legislators. It was an expensive concession that resulted in no benefit to the county, school and town governments. Jefferson County leaders should prepare themselves to tell all wind developers that they already have all the tax breaks they need to prosper and that the county will not add property tax relief to the parade of federal subsidies.
Wind energy plans have been shrinking in the state, as the industry faces a glut of cheap natural gas resulting from hydrofracking, uncertainty over federal support and dwindling financing.
"We are continuing to explore approaches to minimize risks to New York," says NYSERDA spokesperson Alan Wechsler. "The possible expiration of the federal production tax credit - a major revenue source for wind developers - and other market development trends led to a more complicated procurement situation, and approval and issuance are taking longer than we originally projected."
About 40 members of the public attended the hearing. Ten people spoke during the hour-long hearing at Jefferson Community College, eight of whom spoke on wind power - generally opposing it. The policy, which hasn't been updated in more than five years, outlines what standard payment-in-lieu-of-tax agreements are.
The district stalled its approval of the PILOT agreement earlier this month and then amended it Tuesday night to say it would not take effect immediately, but rather when the district receives fully executed agreements.
Last spring, the New York State Energy Research and Development Authority (NYSERDA) put out $200 million in state funding, some of which went to large-scale wind farms. But wind companies eyeing development in New York say the pot's not sweet enough. Developers want assurances that they can make money once the wind farms are built.
Before the vote, board President Michael Comerford announced that the board would table "this indefinitely pending clarification of contractual issues." Afterward, Comerford declined to comment further, as did Superintendent Vincent Coppola.
A payment-in-lieu-of-taxes agreement for any wind power project will need approval from all of the involved taxing jurisdictions, agreed members of the governance committee of the Jefferson County Industrial Development Agency. The committee is updating its uniform tax-exempt policy, which normally allows PILOTs to be approved only by the agency board unless they fall outside of the set policy.
To create a class of taxpayers who do not answer to the electorate is indefensible. The members of JCIDA who argue that these PILOTs need local approval are right and should hold their ground before Jefferson County's property taxpayers are any further disenfranchised. And it is time for the Legislature to wake up to its responsibility and take away from JCIDA the power to provide lower property taxes to the selected few.
In considering a revised uniform tax exempt policy for forgiving property, mortgage recording and sales taxes for developers, Jefferson County Industrial Development Agency board members disputed how much oversight local taxing jurisdictions should have on individual agreements.
Local and county issues will not be part of a uniform tax-exempt policy for wind power projects, but the Jefferson County Industrial Development Agency board will consider the issues along with the projects. The agency's governance committee met Wednesday morning to discuss changes to its uniform policy, which applies to all projects that ask for tax abatements.
Jefferson County taxpayers could be left paying town and school district taxes for a wind farm if the developer fails to pay the project taxes, warns Paul J. Warneck, Jefferson County director of real property services. County officials are worried that taxpayers will have limited recourse if a wind farm leasing land for its turbines does not make its tax or payment-in-lieu-of-taxes payments.