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Towns seek tax revenues from lake power line

ADDISON COUNTY — As the Vermont Public Service Board considers a permit for a proposed $1.2 billion electricity transmission line through Lake Champlain, local community planners are asking that the regulator not stop Addison County’s lakefront towns from taxing the underwater line.
If the permit does forestall such taxation, it could mean that Addison, Bridport, Shoreham and Orwell would miss out on up to $7 million in tax revenue, according to the Addison County Regional Planning Commission.
The potential property tax showdown relates to the New England Clean Power Link, a proposal by TDI New England for a 1,000-megawatt, high-voltage, direct-current transmission line that would stretch south from the Canadian border at Alburgh, to Ludlow. Approximately 98 miles of the 150-mile line would be buried under Lake Champlain, with a stretch of the line hugging the shorelines of Addison, Bridport, Shoreham and Orwell before it veers onto land in Benson.
There, the line would be undergrounded through portions of Fair Haven, Castleton, West Rutland, Rutland, Clarendon, Shrewsbury, Wallingford and Mount Holly, culminating at a proposed converter station in Ludlow. The converter station would change the electrical power from direct current (DC) to alternating current (AC). An underground AC transmission line would then run approximately 0.3 miles along town roads to the existing VELCO 345 kV Coolidge Substation in Cavendish, where the electricity would be carried on the New England electric grid.
The privately funded, $1.2 billion project is intended to deliver low-cost, renewable power from Canada to Vermont and the broader New England market, according to TDI New England officials. The project is being financed by Blackstone, a private equity fund.
While the project is large in its scope and would be routed through one of the region’s most treasured natural assets — Lake Champlain — New England Clean Power Link has not elicited a fraction of the environmental opposition that was leveled at phases I and II of Vermont Gas’s Addison-Rutland Natural Gas Project, involving many miles of underground pipeline.
But a financial dispute appears to be looming regarding the proposed power line. Specifically, the ACRPC believes the communities bordering the underwater section of the power line are entitled to assess property taxes on that infrastructure, to the tune of a combined total of around $7 million during the life of the project. The value of the 98 miles of underwater infrastructure has been placed at $335 million, according to ACRPC Executive Director Adam Lougee.
“Our position is that (the infrastructure) is taxable by the municipalities that border the lake,” Lougee said on Tuesday.
Lougee outlined the ACRPC’s position in a June 11 letter to Public Service Board Clerk Sue Hudson. In that letter, he quotes chapter 32, section 3655 of the Vermont Statutes Annotated that states:
“Utility lines, including but not limited to submarine cables or pipelines, constructed or maintained in Lake Champlain and not otherwise within the limits of the towns of South Hero and Grand Isle shall be considered as being in whichever of those towns adjoin those facilities as if the northerly and southerly lines of those towns were extended easterly and westerly to the county lines.”
Lougee contends the statute “is clearly intended to extend the taxing authority of towns bordering Lake Champlain into Lake Champlain for the express purpose of taxing submarine cables.”
If the affected towns and TDI New England are unable to come to an agreement on property taxes, Lougee suggests Vermont Superior Court — and not the Public Service Board — would be the proper arbiter.
“I think it’s an important equity issue for us to bring up,” Lougee said.
TDI doesn’t agree that the line could be taxed. President Don Jessome reiterated the company’s position on the property tax issue.
“It is the corporate position that we do not believe the municipalities have the taxing authority over anything in Lake Champlain, unless it is immediately adjacent to their shoreline,” Jessome said during a telephone interview. “Our cable will not be immediately adjacent to the shoreline; it will be out some distance from the different waterfront counties.
“We just do not believe they have that taxing authority, but at the same time, our project is bringing significant value for not just the communities we are going through directly through the over-land portion of the project, but for all Vermonters.”
As an example, Jessome pointed to an agreement reached this week between TDI New England and the Conservation Law Foundation (CLF) that calls for any power delivered through the transmission line to be renewable, and that the project would add approximately $121.5 million to the Lake Champlain Clean-up Fund, the Lake Champlain Enhancement and Restoration Trust Fund, and the Clean Energy Development Fund over the 40-year life of the project.
Additionally, company officials have said New England Clean Power Link is expected to contribute:
• $215.3 million in salaries, sales tax and various non-employment expenditures during the project construction period of 2016-2019.
• $651.4 million in property taxes, corporate income taxes and Vermont Agency of Transportation lease payments during the life of the project. An average of $7.2 million in annual property taxes would be paid to the communities hosting the land-based segment of the cable.
• $297.7 million in public good benefits during the life of the project, including $135.7 million in savings to Vermont electricity ratepayers, and $40 million for Vermont renewable energy programs.
The Public Service Board has not set a date for making a decision on the power line permit.
Reporter John Flowers is at [email protected].

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