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Bill could aid towns near turbines

Posted Jan. 24, 2010, at 9:14 p.m.

AUGUSTA, Maine — As the debate over wind farms intensifies in towns across Maine, state lawmakers are considering a proposal that would guarantee minimum tax payments to communities near the enormous and oftentimes controversial turbines.

The legislation aims to remove some of the unpredictability of negotiations between energy developers and local officials weighing the financial benefits of hosting wind energy projects within or near their towns versus the potential effects.

But the bill got a lukewarm response from wind energy companies at a hearing in Augusta last week. It is also unclear whether the measure can win over some of the small but increasingly vocal critics of Maine’s efforts to become a wind energy powerhouse.

Under a 2008 law streamlining the permitting process for wind energy facilities, developers are required to provide “tangible benefits” to communities. Those benefits could include tax payments, lower electricity rates or new jobs, but the law does not set specific benchmarks.

A proposal pending before the Legislature’s Utilities and Energy Committee would create a standard of annual payments of $8,000 or $14,000 per megawatt of installed wind energy capacity, depending on the size of the project. That “benefits package” could include tax increment financing, or TIF, or other benefit agreements negotiated with the town.

For example, a community that agrees to host 15 wind turbines — each rated at 1.5 megawatts — would average $315,000 in tangible benefit payments every year for 20 years, although the community could negotiate higher payments.

The committee is expected to hold a work session on this bill Tuesday.

Pete Didisheim, advocacy director for the Natural Resources Council of Maine and a key author of the proposal, said the average payments by wind energy companies to host communities in Maine is roughly $14,300 a year. NRCM’s proposal would create a “common standard” to help guide communities in their decision-making, he said.

“A community does lose part of its visual resource in agreeing to host a wind power project, so better upfront knowledge about tangible benefits can help residents and local officials better weigh the costs and benefits of a proposal,” Didisheim told members of the Utilities and Energy Committee last week.

With nearly 100 industrial turbines operating in the state, Maine is New England’s largest source of wind power. The dominant developer in the state is Massachusetts-based First Wind, which has a 28-turbine facility in the Aroostook County town of Mars Hill and a 38-turbine facility along Stetson Mountain in northern Washington County.

First Wind also is constructing a second line of turbines — dubbed “Stetson II” — near Danforth, and last week received authorization from the Maine Department of Environmental Protection for a 34-turbine facility in Oakfield in southern Aroostook County. The company also has proposed a 40-turbine facility on Rollins Mountain in the Lincoln Lakes region.

Annual payments to towns and counties that host or have agreed to host wind turbines vary.

Mars Hill is estimated to receive $9.8 million from First Wind over 20 years, which breaks down to roughly $487,000 a year or $11,600 per megawatt of installed wind energy. The town of Oakfield would receive roughly $11.8 million over 20 years, or $588,300 a year and $16,400 per megawatt, according to data supplied by NRCM.

Town residents may see their property tax rates drop or receive other benefits thanks to the turbines’ presence. But with the exception of a couple of projects, such as the three-turbine wind farm on Vinalhaven and a larger facility proposed for Roxbury, most residents living near wind turbines won’t see a change in their electric bills.

That’s because the electricity generated from the turbines is pumped into the New England power grid.

Concerns about the visual impact of giant wind turbines as well as the effects of noise and vibrations from the spinning blades have prompted several towns to adopt moratoriums on wind energy development. Complaints about noise and vibrations from the newer turbines on Vinalhaven and in Freedom are also feeding cries from wind power critics that the industry offers too many drawbacks and too few tangible benefits to Maine.

The original version of the bill introduced by Sen. Peter Mills, R-Cornville, would have required wind energy projects located within the state’s expedited permitting area to offer local residents discounts or rebates on their electricity bills.

The bill was changed after encountering stiff opposition from industry and groups that predicted mandatory rate reductions or rebates could drive away investors or make projects less competitive.

Mills, who is seeking the Republican nomination for governor, also raised the issue of wind farms erected along ridgelines in the Unorganized Territory that are close to organized towns. Mills said it would be “horrible tax policy” to have a town surrounded by turbines yet not receive any of the financial benefits.

Additionally, wind energy facilities typically employ only a handful of skilled personnel on site once the construction crews finish building the turbines and other infrastructure.

Mills compared the tangible benefits in the bill to the burden of “mitigation payments” that the Department of Environmental Protection requires some industries to pay to help offset negative impacts.

“It’s a [regulatory] burden that we impose and that we have a right to impose,” Mills said.

The proposal has received a lukewarm reception, at best, from the wind energy industry so far, however.

A representative for First Wind said last week that the company was still reviewing the revised bill proposed by NRCM.

But John Cooney, vice president for development at Reed & Reed, a Maine-based construction company that has become a major player in the regional wind energy business, warned legislators against taking steps that would discourage development.

Cooney estimated that his company has spent $288,000 in wages per megawatt of wind energy installed on Kibby Mountain in western Maine. More than 95 percent of those wages went to Maine residents earning, on average, $31 an hour, he said

Those are tangible benefits, Cooney said, and putting additional requirements on developers could prompt them to take their business and their money to other states.

“Maine should roll out the welcome mat for wind power,” he said.

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