Knox weighing tax options after solar project approval

— From RIC Energy
This rendering from RIC Energy shows the proposed 5-megawatt solar field from a bird’s eye view.

KNOX — The Knox Town Board intends to get as much money as it possibly can out of the 5-megawatt solar farm that the town’s planning board conditionally approved last month. 

At the same time, 10 towns in neighboring Schoharie County are challenging the state’s Department of Taxation and Finance on the method used for taxing solar facilities.

Among the conditions put forward to RIC Energy, which proposed the Knox project, is that the company sign on to a payment-in-lieu-of-taxes (or PILOT) agreement among the town and, potentially, Albany County and the Berne-Knox-Westerlo School District. 

The facility is to be built at 1953 Thompson’s Lake Road, adjacent to the intersection of routes 156 and 157. 

Under state law, solar facilities are exempt from property tax, which incentivizes developers to contribute to New York State’s renewable energy goals, but removes some of the benefit for the taxing entities where the facilities are located. As a compromise, those taxing entities often draw up a PILOT agreement through which developers pay out some of the money that those entities would otherwise receive through property taxes. 

New York State was expected to implement a new appraisal process for solar and wind energy facilities this year, but was halted by a State Supreme Court order on April 29 after towns in Schoharie County together challenged the state in an Article 78 proceeding, arguing that the state had not followed the necessary procedures when it devised the new model. 

The model uses a discounted cash flow method, meaning that it projects the revenue a facility is expected to generate, then applies a discount to determine its value. 

New York State Supreme Court Justice Christina L. Ryba issued a temporary restraining order over the new model, stating that, while a final determination has yet to be made, the Schoharie County towns “are likely to succeed on the merits in this matter” and that the status quo should be maintained for the time being. 

The case is set to be heard on May 27.

Knox’s former supervisor, Vasilios Lefkaditis, who left office at the end of 2021, had said while he was in office that the town should be aggressive in pursuing a PILOT agreement with RIC Energy and get a larger share of the funds than the school district or the county, since the town was the one shouldering the burden of the project.

Supervisor Russell Pokorny told The Enterprise this week that he’s pursuing that same goal.

Pokorny said that, per state law, the total amount of money that RIC Energy can be asked to pay out is $5,000 per megawatt, creating a total of $25,000 that would be paid out three ways. He said that one proposal would have given the town only a couple thousand dollars while the county would have received around $5,000 and the school would have gotten between $18,000 and $19,000.

“Us getting such a small portion really isn’t sitting well with the town board,” Pokorny said, adding that he proposed that the town get 75 percent of the share between the school and the town, with the county still receiving around $5,000. 

That proposal is currently being reviewed by the town’s attorney, Michelle Storm, he said.

Pokorny, like Lefkaditis, said that he feels the town should get more money because the solar project has the most impact on the town. 

“It has some effect on Albany County because the Albany County roads go past it, but really it’s a Knox thing. People in Knox, and the town board and I, feel like we should have a greater share in the PILOT,” he said.

PILOT agreements carry a lot of weight for some residents, who may view them as the saving grace of a solar facility that disrupts the rural landscapes that define the Hilltowns, where a number of solar projects have been built in the last decade. 

In Westerlo, where so many solar projects were approved that the town board established a moratorium in 2019 that lasted for two years, there has been debate over whether the PILOT agreements earn enough money for the town to make up for the projects’ impacts. 

Former Westerlo Supervisor Bill Bichteman, who led the town for most of the period in which it was trying to devise new renewable-energy laws and a comprehensive plan, said in 2019 that the five PILOT agreements the town had in place barely had an impact on residents’ taxes. 

“It helps,” Bichteman wrote to The Enterprise in 2019, “but is a long way from substantially reducing taxes and it barely meets the anticipated inflation … Westerlo residents will hardly, if at all, realize a tax savings. There is no doubt the solar revenue helps but it is not the windfall others would have you believe.”

More Hilltowns News

The Altamont Enterprise is focused on hyper-local, high-quality journalism. We produce free election guides, curate readers' opinion pieces, and engage with important local issues. Subscriptions open full access to our work and make it possible.