What About the Tax Money?

 

by Robert C. Strasburg II

Results of inquiry to the Steuben County Industrial Development Agency (SCIDA) on 5/9/06 for confirmation of revenue formula presented by UPC Wind Management, LLC.

After receiving the letter from UPC suggesting revenues "in the range of $660,000" for the Payment In Lieu Of Taxes (PILOT) program offered to the Town of Cohocton, Steuben County, and Wayland Cohocton Central School in return for favorable legislation allowing the placement of commercial wind turbines in the Town of Cohocton, I attempted to get an answer from the Town Board or the Planning Board as to what the formula was for determining potential income to our Town from the installation of these wind turbines, i.e. how much were they selling our viewscape for. I was unsuccessful in getting straight information from our local officials so I decided to ferret out the data and went to SCIDA myself to ask some questions.

I met with James P. Sherron the Executive Director of SCIDA and found his information to be quite enlightening. Following is a summary of what I learned today:

The IDA is not able to get involved in a PILOT program such as the one proposed by the European fostered wind company known as UPC unless a Town formally invites the IDA.

In order to introduce government subsidies into a project in Steuben County, the IDA must be directly involved.

The IDA attaches ownership to properties where these proposed wind mills will go by taking Title or lease of these properties and thus removes these properties from the tax roles. This allows the PILOT program to then commence.

The terms and amounts of revenue from the PILOT program that will govern the wind turbine project in Cohocton are negotiable. Negotiations of these terms are done by the Lead Agency; in this case it is the Cohocton Planning Board.

The PILOT revenue is based on the potential sale of electricity and is not a guaranteed revenue amount.

The $660,000 as the suggested amount by UPC that Cohocton Town, Steuben County and the school may receive from this PILOT program is determined by a formula based on an assumed constant output of 30% of the actual wind turbine rating. (I was not able to verify this number and it does not conform to other studies I am familiar with, other studies suggest a much lower output in the range of 10-20%)

Here are the separate factors that combine to produce the formula used by UPC in their projection:

A 2MW turbine has a supposed potential output of 2 Megawatts per hour

UPC assumes a actual output of 30%* capacity

A Megawatt is 1000 kilowatts

The IDA used $0.04 to represent what a kilowatt of wind generated electricity can be sold for on the electrical grid.

Formula:

2MW wind turbine reduced to assumed actual production of 30% = 600 kilowatts per hour x .04 per kilowatt = $24 per hour x 24 hours in a day = $576 x 365 days per year = $210,240 per year per 2MW wind turbine gross revenue from the sale of electricity.

$210,240 per year per 2MW wind turbine x 58 proposed wind turbines in Phase 1 & Phase 2 of the Cohocton wind turbine project = $12,193,920 gross revenue for UPC per year.

Proposed $660,000 in total PILOT payments by UPC to Cohocton Town, Steuben County and the school $12,193,920 = 5% of gross revenue expensed by UPC in PILOT funds.


In summary, using the numbers provided to me by UPC and the IDA, 95% of the gross revenue generated from the sale of electricity from these 58 wind turbines included in the first two phases of the Cohocton wind project is in the control of a Privately held Corporation that has refused to disclose to me the identity of their investors. Has our Town sought to discern where this money is going? Does it stay in our Town? Our County? Our State? Our Country?

If the IDA did not remove these properties from the tax roles and UPC was obligated to pay the taxes that would then be levied on all 58 of these 2 Million dollar structures, these unknown investors would then flee our hills and Cohocton could then consider strategically placing 5 of these wind turbines throughout the Town in places chosen for their minimal impact and enjoy the $1,051,200 in revenue from the sale of electricity. It does not take a rocket scientist to figure out that we can service the debt, improve our Town, reduce our environmental and health impact and keep 100% of the revenue in our control with that kind of revenue. If they insist on having wind turbines, they should at least be smart about it.

I am all for alternative safe energy, but a study of the facts quickly reveals that this wind turbine industry is corrupt with corporate greed bilking tax subsidies, raping viewscapes, funneling American money out of local economies and worst of all, our Town Board has become victim to their seduction.

Robert C. Strasburg II
60 Maple Ave.
Cohocton, New York 14826
Email rcs2nd@frontiernet.net
Phone: 585-384-9318
Cell: 585-703-1299
Fax: 585-384-9318

 

*30% IDA assumption may be high

 

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