- Heritage Wind will pay $35-$60* million in taxes, PILOT, and host community payments to the various taxing jurisdictions.
- The Town of Barre will receive up to $38 million from Heritage Wind.
- Other New York towns have used their wind farm income to lower taxes, improve local facilities, provide laptops to students, and more.
* The Host Community Agreement and PILOT payments for Heritage Wind will be based on a dollar per megawatt commitment, and therefore, total payments will be dependent on final project size. As final project design is not yet complete, anticipated payments are currently presented as a range. This range reflects anticipated total revenue to Barre over the project life.
WHAT COULD THIS COMMUNITY DO WITH $35-$60 MILLION?
What is a PILOT?
A Payment in Lieu of Taxes, or PILOT Agreement, is an alternative for large development projects, such as wind power projects, to traditional property taxes. It benefits both the community and the developer for a few reasons:
- It creates a more predictable and consistent income opportunity for local jurisdictions. A PILOT creates a set payment schedule, specifying how much money each jurisdiction will get for each year of the agreement, rather than relying on annual tax assessments to determine how much money the community will get each year.
- It ensures that payments from the project do not degrade over time. Unlike annual tax payments, which would decrease each year as wind energy facilities depreciate, the annual payments specified in a PILOT will increase year over year. This creates greater certainty for local governments when they are crafting their budgets and ensures that they receive value for the project over the majority of its lifetime.
- All local taxing jurisdictions have a say. PILOT agreements are made between a developer, the county, the town, and the local school district, and the process is moderated by the County Industrial Development Agency (IDA).
What is a Host Community Agreement?
A Host Community Agreement is a separate agreement between a developer and the town, which complements the PILOT agreement. This agreement documents additional benefits for the town that is hosting the project beyond what they receive through the broader PILOT agreement.
Host Community Agreements offer more opportunity to target financial benefits to towns that are hosting a project or even a neighborhood or fire district that is hosting a project. Renewable energy projects, in general, do not significantly increase the responsibilities or expenses of counties or school districts. While a renewable energy developer is happy to contribute to the tax revenue of counties and school districts, there are good reasons to target benefits to the towns or fire districts that will host/view the project. Further, a Host Community Agreement may give the town the opportunity to use new revenues for specific community need or desire.
How much money will Heritage Wind invest in the community?
We are still in negotiations on the PILOT and HCA agreements, but we can say with confidence that over the lifespan of the project, Heritage Wind will pay more than $35 million in taxes, PILOT, and host community payments to the various taxing jurisdictions.
What does $35 million look like?
- The length of 35 million $1 bills laid end-to-end is 3,298 miles, which is more than the distance from San Francisco to New York City.
- $35 million could fund more than $5,000 small-business startups.
- $35 million could buy 300 school buses for school districts
How much will the town of Barre get?
Though negotiations are not yet complete, we can say with confidence that the project will bring between $20-$38 million to the Town of Barre.
What have other wind farm host communities used this money for?
Many other host communities in NY have used the revenue from wind power projects to drastically reduce or even eliminate town taxes. The towns of Eagle, Sheldon, and Orangeville, all in Wyoming County, are still eliminating town taxes after several years of hosting their respective wind power projects. The town of Cohocton was able to reduce its property taxes by 60% and perform maintenance throughout the town. The Lowville school, in the Maple Ridge wind farm project area, was able to use the revenue from the project to start offering AP classes, give every student in Grades 3 through 12 a laptop, redo athletic fields, and more. These are just a few examples of how wind farms can transform a community!