The following describes the contracts between the Town of Burrillville and Clear River Energy LLC if the Energy Facility Siting Board decides to grant the permit to site the proposed power plant in Burrillville, RI.
Copies of the contracts between the Town of Burrillville and Clear River Energy LLC are linked on the left side of this page.
Special Legal Counsel Michael R. McElroy, was asked to comment on the reasons for placing the Invenergy power plant on a long-term tax agreement instead of on the Town tax roll. Mr. McElroy provided an opinion that a reasonable and fair tax agreement protects the best interests of the Town in the event the EFSB approves the power plant. He listed the following reasons:
- Guaranteed Revenue Stream
- Avoids costly litigation that is the usual result of companies
appealing their property valuations each and every year
- Eliminates Volatility in Future Valuation
- Eliminates Costly Appraisals
- Eliminates Conflicting Appraisals
- Protects against most future court decisions and legislation that might impact facilities that are on the tax roll vs a tax agreement
- Guarantee of Full Taxability
- Binding on Possible Future Owners
- Placing the facility on the tax roll could negatively impact State Aid (school aid)
- The Town could lose leverage to negotiate if the plant is
permitted by the Energy Facility Siting Board (EFSB) and no tax agreement is in place
- The Taxation must be reasonable and cannot be arbitrary
Property Value Agreement
There’s been a lot of discussion of the Town of Burrillville negotiating an abutter’s agreement but it may not be clear exactly what that means. A strict legal definition of abut is: “To join at a border or boundary; to share a common boundary with”. So, calling the agreement an “abutter’s agreement” is incorrect.
What the Town Council voted to support is a property value guarantee agreement. The property value guranatee agreement includes an area negotiated between the parties and is defined in the agreement. A list of properties included in the agreement is posted on this page.
- The property value agreement covers more properties than those that are physically joined to the proposed power plant site.
- It also exceeds the 200 foot area set by law for legal notice of public hearings.
The purpose is to provide a model property value agreement for nearby property owners, as defined in the agreement, to negotiate with Invenergy on the sale of their property if they decide to sell. Basically, it represents the minimum that Invenergy will has agreed to. Individual property owners may try to privately negotiate a better contract.
The question of whether or not to sell the property always remains with the property owners themselves.
Power plants are generally expected to last for a limited time. The Town believes that now is the time to begin planning for the closing of the Invenergy power plant if it is in fact sited in Town by the Rhode Island Energy Facility Siting Board.
The Town has an agreement with Invenergy to plan in advance for the decommissioning, which is defined as removing the power plant from service. It’s important to plan now to ensure that the plant does not sit vacant and unattended for when it is no longer in service.
A decommissioning agreement does a number of things. It provides binding legal assurances that the physical site of the power plant will be returned to its natural state when it ceases to operate, or the Town can agree to a reuse of the property solely at the Town’s discretion. It provides financial surety that money is available to execute the decommissioning project.
There are required updates to the Town on a number of things such as the cost to perform the decommissioning project as costs change over time and new or revised regulations affect the cost of performing the work; or if the plant is physically altered over the term of the agreement that is covered in the updates. It addresses things like transferring/ selling the facility to a different owner, potential bankruptcy and other legal issues that could come up over the life of the agreement.