$14,641,587 MAY BE OWED BY TAXPAYERS
Reprinted from The Bow Times
Millions of tax dollars are at issue due to the recent loss of a court case involving the value of the Merrimack Station coal-fired plant in Bow. In 2012 the town set an assessed value of $159 million for all Eversource-owned property. However, in an appeal of that number to court, Judge McNamara concluded it was only worth 42% of that number or $66.6 million. The numbers for 2013 were similar.
Town counsel Paul Fitzgerald has appealed the decision, but the chances of overturning it are not great.
The statistics from utility tax appeals in the New Hampshire Supreme Court for the last 35 years reflect no reversals at all in similar cases.
Judge Richard McNamara pointed to other recent values for the coal-fired plant to help credit his conclusion that the plant itself was only worth $18,900,000. That value dispute was the major issue in the assessment of all of Eversource’s properties in Bow. He said professional valuation firm Liberty Consulting Group had a 2013 value of $15,400.000 while La Capra Associates placed a 2014 value of $10,000,000 on the plant. The judge was critical of the Bow valuation expert, George Sansoucy, for values “many orders of magnitude higher” than those of PSNH expert John Kelly.
At several points in his opinion Judge McNamara found Sansoucy not to be a credible witness. Sansoucy testified that a probable purchaser of the plant would replace it with a new coal-fired plant “despite the fact that no coal-fired plant has been built in New England is decades and natural gas has become an increasingly large share of the region’s power plant mix.” Kelly used a gas fired replacement plant reflecting the modern changes in energy markets. Fracking, said the judge, has led to dramatic production in natural gas and at lower prices than coal, so he sided with PSNH’s expert.
In another part of his opinion the judge found Sansoucy lacked credibility when he claimed coal prices could be competitive some time in the future: “It is based on pure supposition and it flies in the face of compelling evidence regarding changes in the fuel market.”
Turning to an analysis of the two jet engines (or combustion turbines) that are fired up only at extreme demand times, Sansoucy found the 50 year old engines to be good for another 25 years and therefore worth $8,000,000. Judge McNamara said, “the court cannot accept that conclusion” as to the obsolete equipment.
At several other points in his opinion Judge McNamara found Sansoucy not credible, thus making an appeal difficult because the Supreme Court does not weigh credibility. It leaves that to the trial judge.
According to the Town Manager, refunded taxes and interest owed to Eversource are:
2012 $5,106.355
2013 $3,535.232
2014 (EST.) $3,000,000
2015 (EST.) $3,000,000
TOTAL $14,641,587
It is possible that the above amount could be bonded for 20 years at 4% interest costing about $1,000,000 a year to pay over time for principal and interest.