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Appellate ruling could knock wind out of energy project

By: Denise M. Champagne//March 31, 2014

Appellate ruling could knock wind out of energy project

By: Denise M. Champagne//March 31, 2014

iStock image used with permission.
iStock image used with permission.

Changing circumstances on a proposed wind turbine project in Cattaraugus County justified the Allegany Town Planning Board’s decision against granting an application extension, an appeals court has ruled.

The Appellate Division, Fourth Department, in its unanimous decision March 21, found Supreme Court Justice Michael L. Nenno properly dismissed an Article 78 challenge to the Planning Board’s denial of a second one-year extension for a special use permit and site plan approval for a 29-turbine wind farm in the town of Allegany. The Appellate panel found the developer was to blame for delays.

“We’re very pleased that the court agreed that the town acted reasonably in its handling of the application, the change in the application and the other aspects of how the town handled the proposal,” said Daniel A. Spitzer, a partner in the Buffalo office of Hodgson Russ LLP, who represents the town.

The developer, EverPower Wind Holdings Inc. of Pittsburgh, is represented by J. Michael Naughton, a partner in the Albany firm Young/Sommer Inc. who could not be reached for comment late last week.

A press release, issued Tuesday by EverPower, indicates the ruling may halt the project.

Kevin Sheen, EverPower’s senior director of development, said the company is assessing its options. He said if it decides to go forward with the project, it is unlikely it would continue in its current form.

“We’re certainly disappointed with the decision because we felt we had a strong case,” Sheen said.

EverPower’s plans included building a $12 million, 29-turbine project on approximately 9,000 acres.

Chris Shears, chief development officer, said the town, local school district and Cattaraugus County would have benefitted from approximately $12 million over the next 20 years from the proposed Allegany Wind Farm.

“This clean, secure project would have also offset harmful [carbon dioxide] emissions while providing electricity for more than 17,500 homes yearly,” he said.

Under the terms of the original July 2011 agreement, Allegany Wind LLC, a subsidiary of EverPower, was granted a special use permit for the wind farm project which would expire in one year if construction was not started. About three months later, a citizens group, Concerned Citizens of Cattaraugus County, brought a suit, seeking to overturn the town’s approval.

Justice Nenno dismissed the suit. An appeal was filed, but never perfected and ultimately dismissed.

As the one-year deadline approached, Allegany Wind sought a one-year extension from the town Planning Board which agreed to extend the deadline by one year or 90 days after completion of the appeal, which was still pending at the time, whichever came first.

Since the appeal was dismissed by the Appellate Division, Fourth Department on Sept. 6, 2012, Justice Nenno calculated the extension would expire on Dec. 5, 2012.

On Feb. 28, 2013, Justice Nenno ruled Allegany Wind did not proceed with the project or take measures to challenge the 90-day extension, even though it knew the clock was ticking. He dismissed the Article 78 challenge to the Planning Board’s extension decision and would not extend the time limit, prompting the latest appeal, an Article 78 proceeding challenging his decision.

The Appellate Division panel noted that Allegany Wind notified the town of Allegany on Aug. 3, 2012, that it was considering using alternate turbine models. That is when it requested the second extension, which was denied.

“We conclude that, contrary to petitioner’s contention, there was a material change in circumstances since the special use permit had been issued and that the Planning Board’s refusal to extend the special use permit for a second time was not arbitrary and capricious,” the panel wrote in the three-page unsigned decision in In the Matter of Allegany Wind LLC v. Planning Board of Town of Allegany (2014 NY Slip Op 01944).

“The record establishes that, during a meeting conducted by respondent, several months before petitioner requested its second extension, petitioner’s counsel answered in the affirmative when asked whether a change in turbine models would constitute a change in circumstances sufficient to warrant reconsideration of the project by respondent.”

The panel noted Allegany Wind’s consultant concluded using the alternate turbines would change the potential impact, resulting in noncompliance with the town’s noise setback requirements. It also rejected the contention that the clock should not have run while the Concerned Citizens of Cattaraugus County’s lawsuit was pending because it could not get the necessary financing or begin construction during that time.

New York does not recognize such tolling, which the panel found would not have been warranted anyway; that the main reason the project did not move forward was the developer was waiting to find out if Congress would extend the Production Tax Credit for wind energy which was scheduled to end at the end of 2012.

“Moreover, when CCCC’s attorney advised the town and petitioner that CCCC did not intend to pursue the appeal, petitioner’s attorney refused to sign a stipulation discontinuing the action,” the decision states. “The town therefore moved to dismiss CCCC’s appeal, but petitioner threatened the town with legal action if it did not withdraw the motion.”

Even after the town withdrew its motion, the panel noted, Allegany Wind opposed the motion, in spite of the fact it was a respondent on the appeal, and the company did not cross-appeal.

“Thus, it is clear from the record, that petitioner engaged in sustained efforts to delay dismissal of CCCC’s appeal,” the panel wrote.

The panel consisted of Justice Nancy E. Smith, presiding, and Justices Eugene M. Fahey, Stephen K. Lindley, Joseph D. Valentino and Gerald J. Whalen.

Still pending is a lawsuit EverPower filed against the town, claiming the town took steps to thwart the project after the makeup of the Town Board changed following a general election in which two “avowed project opponents” joined the board.

The company claims the Town Board prematurely demanded it release $500,000 in a project escrow account or give up its permits; that the town understood the escrow was not to be released until the project was completed. It further claims the town’s ultimatum and “unreasonable deadline” were designed to kill the project.

Spitzer said EverPower was trying to intimidate the town which, in turn, claims EverPower breached its host community agreement which required the company pay the town $500,000 up front when the CCCC lawsuit was over and $278,000 a year, starting in October 2012. That suit is still in the discovery phase.

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