January 30, 2013BERLIN — Brookfield Renewable Power, a Canadian company that owns a 75 percent share of the 33-turbine Granite Reliable Power (GRP) wind farm, has only sent $249,000 as its Payment in Lieu of Taxes (PILOT) payment to the office of Coös County's Unincorporated Places (UPs), county administrator Jennifer Fish reported to the county commissioners at their Wednesday meeting.
Another $246,00 is due by Feb. 1, Fish reported.
The turbines, all 410 feet tall from base to blade-tip, are located on ridgelines in two of the county's UPs north of Berlin: Millsfield and Dixville.
Freshet Wind Energy, LLC, which shares a rural office building with Wagner Forest Management in Lyme, owns the remaining 25 percent.
The commissioners and other county officials believe that the legal agreement that they signed in March 2008 before the project received its Certificate of Site and Facility (a required permit) from the state Site Evaluation Committee is ironclad.
Brookfield is now maintaining, however, that the payment "is directly tied to the amount of electricity we are permitted to produce."
Fish said that a letter from Brookfield indicates that its legal department is "reading the contract differently than the county."
The county says that the PILOT agreement is based on the wind farm's capacity to produce power as specified in the contract: "$5,000 per each megawatt of installed capacity, which shall mean the maximum capacity, in megawatts, of the wind turbine generators constituting the Facility that are actually installed and either (i) generating energy, or (ii) capable of generating energy and permitted to generate energy as required by applicable law."
The contract states that in the case of a dispute, "the county shall be entitled to inspect the premises of the project and the records of GRP related to the operating nameplate capacity of the project, at the county's own expense."
Brookfield asserts that the amount of electricity the 33 turbines can provide is often curtailed at the direction of ISO New England, which operates the six-state high-voltage power grid and wholesale markets.
Over the summer of 2012, six gearboxes had to be changed out at the wind farm, reported Brookfield's U. S. spokesman Joanne Walsh at that time from its Westborough, Mass., headquarters. The V90 3-megawatt Vestas turbines were plagued with problems at a number of locations around the world, but Walsh said the repairs that required bringing large cranes on site were merely "routine annual maintenance."
When then-county administrator Sue Collins was asked whether this downtime would affect the PILOT payment, she replied, "The Coös County Payment in Lieu of Tax Agreement states that GRP will pay annually $5,000 per megawatt of installed capacity. There are 99 MW of installed capacity that generates an annual payment of $495,000. That amount is due by February 1st of each year of the 10-year agreement. Coös County has received the payment for 2012 — $75,000 had been paid in 2008 that was held as deferred revenue until the project went on-line, and $420,000 was paid by check in early 2012.
"Revenues were credited to the host communities — Dixville and Millsfield — based on each community's share of the total 33 wind turbines," Collins said. "Next year (2013) the distribution will be based on the assessed value of the wind park in each of these two Unincorporated Places."
Commissioner Paul Grenier of Berlin said that Brookfield is trying to back off its agreement because of its high fixed costs despite having a "good faith" 20-year agreement with Coös County, which calls for it to be reopened after 10 years.
"Brookfield and all utilities are trying to bring municipalities and counties to their knees," Grenier explained, adding that this is part of a concerted statewide effort. "I'd like to see one large class action suit. The utilities want to bleed communities."
"The county has a good leg to stand on in fighting Brookfield on this," said chairman Tom Brady of Jefferson, adding that the state Department of Revenue Administration (DRA) had been consulted when the agreement was being negotiated.
If the county has not received what its officials believe is the balance due on Feb. 1, it will turn the matter over to its lawyer, Jonathan Frizzell of Waystack and Frizzell in Colebrook.
County officials, however, remain confident that their interpretation of the contract is correct.
Part of this confidence comes from the reputation of those who signed the negotiated PILOT agreement.
A rare moment of levity at the June 10, 2009, SEC final deliberations in Concord, weighing the pros and cons of issuing the Certificate (permit) with conditions and mitigation agreements, illustrates the point.
This reporter described an incident that was published on June 17, 2009, in the Democrat and Berlin Reporter.
"Fish and Game Director Glenn Normandeau (an SEC member) … argued against a condition suggested by intervener Ms. Keene of Jefferson. She suggested that the terms of the PILOT be re-negotiated every year. She wrote that she believed that the county commissioners "were remiss in negotiating a figure that could be substantially higher than the current amount." Ms. Keene maintained that the commissioners did not recognize the extent of GRP's likely profits and recommended that a third party — "with expertise" — be brought in to negotiate on the county's behalf.
"Director Normandeau scoffed at that suggestion, however, saying, 'I don't think (County Commissioner) 'Bing' Judd (of Pittsburg) has ever missed a dime!'"