OP-ED: Nothing requires the IDA to help finance Alle-Catt

“….the project would be exempt from property, sales and mortgage recording taxes, saving the company several millions of dollars”

A OPINION By GARY ABRAHAM

Farmersville Town Board member Tom Callahan Jr. writes, in an op-ed in the Nov. 15 edition of the Olean Times Herald, to urge the Cattaraugus County Industrial Development Agency (IDA) to offer a payment in lieu of taxes (PILOT) agreement with Alle-Catt Wind Energy.

Alle-Catt wants to build the largest wind farm in New York in Rushford, Centerville, Arcade, Freedom, and Farmersville. The project has been delayed because National Grid requires transmission upgrades to handle the power, and because the financing climate has soured.

If the IDA agrees to the tax breaks Alle-Catt wants, the project would be exempt from property, sales and mortgage recording taxes, saving the company several millions of dollars. Alle-Catt is asking for $6.48 million in sales tax exemptions and $7.56 million in recording tax exemptions. In lieu of property taxes to host towns, school districts and the county, Alle-Catt would pay about 25% in lieu of regular tax rates. About half the project, or about 15,000 acres, is in Cattaraugus County.

The IDA reviews requests for PILOT agreements looking at several factors. One of the most important factors is how many permanent fulltime jobs the project creates. While lots of construction jobs are created for about a year, permanent full-time jobs are virtually zero. Nobody really runs a wind farm. At other wind farms in the region, only a handful of “full-time equivalent” operations jobs (that is, part-time jobs) have been created, mostly inspectors who would alert headquarters if specialists were needed for a repair.

The Alle-Catt project would have significant adverse impacts on the environment and public health. The state Department of Health testified during a hearing on Alle-Catt’s proposal that project noise would cause a significant public health risk. The state Siting Board approved the project, with conditions, even though it found that the project would result in “between 480 and 515 bird fatalities annually” including six threatened or endangered birds and (over the 30-year life of the project) 41 bald eagles.

It was also noted between 26,000 and 39,500 bats will be killed over the life of the project, including two species listed as threatened or endangered. Of 5,900 forested acres needed for the project, 1,550 acres would be cleared and about 1,686 acres of remaining unbroken forest would be fragmented with access roads and electrical corridor paths.

Given the low value of intermittent electricity, and the low capacity wind projects have to generate electricity (about 20%, compared to 98% for nuclear and hydropower), this level of environmental and human health harm should not be tolerated.

Mr. Callahan is right to expect at least that his town be held harmless for the decommissioning and restoration of the land the project uses. But to obtain that, his town doesn’t need the IDA to offer Alle-Catt a PILOT agreement. The state certificate Alle-Catt was awarded in 2020 assures that Farmersville gets to negotiate a decommissioning agreement, and requires the agreement to be in place before construction is approved.

Mr. Callahan noted that some construction is beginning now, but that is limited to an operations building, a laydown yard, and some entranceways to areas to be developed later. Approval to commence construction of the wind farm has not been issued and won’t be until Alle-Catt satisfies several licensing conditions, including a decommissioning plan.

Here are the requirements for decommissioning, or taking down the wind farm at the end of its useful life: “Wind turbines shall be decommissioned if they are non-operational for a period of one year and a day.” Cert. Cond. 128©. The estimate of the cost of decommissioning cannot be discounted for salvage value, and must include removal and restoration of wind measurement towers and project access roads. Cert. Cond. 45(a).

Each of the five towns hosting the project must approve the decommissioning plan. Cert. Cond. 45(b). The plan must be approved before construction can begin. Cert. Cond. 45 (preamble). Each town must hold a letter of credit, funded by the company, to cover the cost of decommissioning, adjusted for inflation. Id. and Cert. Conds. 45(a)-(e).

Alle-Catt has yet to satisfy these conditions. Had Mr. Callahan read the certificate conditions, he would know that Farmersville will not be “liable financially for the removal of these eyesores when the time comes,” as he writes. Because decommissioning is required by Alle-Catt’s state license, the decommissioning requirements do not depend on a host community agreement or a PILOT agreement with the county IDA.

If Alle-Catt cannot obtain a PILOT agreement from the IDA, it will need to look elsewhere for financing. Nothing requires the IDA to help finance the project.

(Gary Abraham lives in Humphrey, New York. He practices environmental law all over upstate New York. Mr. Abraham represents four environmental organizations in Rushford, Centerville, Freedom and Farmersville.)