Hancock Suing Berkshire Wind Cooperative Over Payment Disputes
The small town of Hancock, Massachusetts plans to sue the cooperative behind a Berkshires wind turbine project over payment disputes.With one of three members absent, the Hancock Select Board voted unanimously Tuesday to authorize the town’s attorney to file a lawsuit against the Berkshire Wind Cooperative for what it calls outstanding payments plus interest. The 10 turbines that make up the Berkshire Wind Power Project went into operation May 2011, a moment celebrated on Brodie Mountain by then-Governor Deval Patrick. At the time Berkshire Wind had signed a payment in lieu of taxes or PILOT agreement with the town of Hancock for the value of the turbines. The roughly $55 million assessment using the town’s $2.84 tax-rate per $1,000 of property worked out to $156,600 per year through fiscal year 2014. Select Chair Sherm Derby says the town started negotiations for a new contract in 2013.
“We offered to extend the contract at the same rate for three years,” Derby said. “They came back to us with an offer of $100,000. We told them it was totally unacceptable.”
Derby says offers are now off the table after the town later offered $150,000 per year throughout the next contract. He says that deal was shot down and Berkshire Wind offered $150,000 for the first year with declining rates for the following years – an offer the town denied.
“We’re giving them a payment based on today’s tax rate,” Derby said. “Do you think Hancock’s tax rate is going to be $2.84 three years from now?”
The PILOT agreement states that by November 2014, the town will issue a request for proposal prepared by Berkshire Wind to have a company re-appraise the turbine’s property value. The cooperative required the town to use one of five companies, under the agreement Berkshire Wind pay all costs associated with the RFP and the appraisal report. Select Chair Derby says only one qualified company responded and Berkshire Wind refused to pay its rate. David Tuohey is the director of communications for Massachusetts Municipal Wholesale Electric Company, which developed Berkshire Wind Cooperative.
“Although the town issued an RFP in January, the town rejected the response because of the cost,” Tuohey said. “Berkshire Wind understands that the next step in this process is for the town to reissue the RFP, which was revised in February by the town and Berkshire Wind so as to address issues that resulted in a limited response to the initial RFP.”
Therefore a new appraisal hasn’t been completed. Fourteen central and eastern Massachusetts communities are also members of Berkshire Wind Cooperative. Hancock does not get any of the 15 megawatts generated by the turbines. Reading from a prepared statement, Tuohey continues.
“Berkshire Wind has paid all PILOT amounts up through fiscal year 2014 and has agreed: to pay for the development of an RFP; to pay for the cost of an appraisal resulting from the RFP; has offered interim PILOT Agreements pending the outcome of the RFP process and sent a check to the town for $147,000 as a PILOT payment for fiscal year 2015 with the explicit statement that if the results of the RFP yield a higher payment, Berkshire Wind will pay the difference,” said Tuohey.
The Select Board voted to send that $147,000 check back to Berkshire Wind.
“If we were a normal town and we were broke we would probably have to take their money,” said Derby.
Derby says the town of approximately 775 people — which outside of the schools has no full-time employees — has $733,000 free cash on hand. Being the first wind project in the state, Derby says he would’ve thought Berkshire Wind wants to maintain its credibility instead of arguing over roughly $10,000 per year.
“These people want you when they need you, but they don’t want you when you become an expense,” Derby said. “That’s what we are now. Green energy is wonderful, but when you got to pay with green money it becomes a problem.”
The board also voted to hire Boston-based energy attorney Vincent DeVito to assist town counsel. Refusing to answer any questions because of impending litigation, Tuohey of the Massachusetts Municipal Wholesale Electric Company concluded with this statement.
“In light of all of this, it is most unfortunate and disappointing that the town has rejected the $147,000 payment and instead voted to pursue litigation,” Tuohey said. “Litigation will only increase costs unnecessarily for the town and Berkshire Wind.”