IVEK solar tax break up for town meeting vote

The Springfield Select Board agreed Monday to put a special article on the town meeting warrant that would exempt IVEK Corp. from paying property taxes on its new solar installation.

http://www.rutlandherald.com/article/20110125/NEWS02/701259879

Published January 25, 2011 in the Rutland Herald

IVEK solar tax break up for town meeting vote

By SUSAN SMALLHEER
Staff Writer

SPRINGFIELD — The Springfield Select Board agreed Monday to put a special article on the town meeting warrant that would exempt IVEK Corp. from paying property taxes on its new solar installation.

Under the proposal, which still has to be reviewed by the town attorney, IVEK would get a permanent tax exemption on its 936 solar panels, but not on the real estate the system sits upon.

The board stopped short of adopting a townwide alternate energy exemption, which had been proposed, but board members said they were uncomfortable granting “blanket” approval of tax exemption of all not-for-profit installations.

IVEK’s solar installation is a net metering project — it sells all its output to Central Vermont Public Service Corp. for credit against its power usage and bill. The new system generates about 90 percent of IVEK’s electricity needs, about 240,000 kilowatt hours. It is one of the largest solar installations in the state.

Chairman Kristi Morris said the town wanted to be supportive of IVEK, which was not granted any of the state tax credits to build its system because of a snafu. Rep. Alice Emmons, D-Springfield, has introduced legislatiion this month that would retroactively help to rectify that situation.

Town Manager Robert Forguites said towns can vote, under a special state law, to exempt real estate and personal property of alternate energy system, from taxation. He said a company in North Springfield was interested in a tax break on its system.

While Forguites never mentioned IVEK by name, the Select Board said the exemption was for IVEK.

Forguites had presented a proposal to exempt both the real estate and personal property, but the board only was interested in granting the personal property, i.e., the solar panels.

Jeffrey Mobus, the town comptroller, said another business had called the town office interested in a similar tax break.

And Select Board member Terri Benton mentioned the Edgar May Recreation Center, which has one of the state’s largest solar hot water systems installed on its roof.

“How does this affect the solar heating, such as the rec center?” Benton asked.

The electricity generated by the system is only eligible for a tax break if the power isn’t sold for a profit, Morris said.

Morris wanted to know whether the tax break would affect all the small hydro dams in Springfield, but Forguites noted that all the owners of the hydro dams sell their power, rather than use it themselves.

The new owners of the old Fellows Gear Shaper plant, which at one time was going to use the electricity generated at its dam, is now looking to sell the output, Forguites said.

“I’m very uncomfortable with a blanket statement,” said Select Board member John Swanson.

Fellow board member Michael Knoras said he was afraid that “everyone with a flashlight” would come in and claim a tax exemption.

The Select Board had no estimate of what the tax break would mean to IVEK. Mobus said that IVEK had not yet paid taxes on the new system, which became operational in December.

Knoras said he was in favor of deciding the tax exemptions on a case by case basis.

“We want to help them survive,” he said of IVEK.

Knoras said he wanted the town to get Town Attorney Stephen Ankuda to review the proposed article, to make sure it didn’t represent “preferential treatment.”

The board voted in favor of the exemption with the exception of Morris.