North Country Towns Gear Up For N.H. Supreme Court Fight Against Big Utilities
Argue State Allowing Utilities To “Escape Taxation”
Case to be heard Jan. 5, 2017
Case to be heard Jan. 5, 2017
Robert Blechl
Caledonian Record
Nov 26, 2016
In Littleton, Eversource is seeking to reduce its total assessment of about $22 million to $11 million.
In Lancaster, for the 2011 tax year, the company wants to cut its assessment from $7.38 million to $3 million.
NHEC’s tax abatement appeals, filed at both the BTLA and superior court, are against towns that include Bath, Colebrook, Haverhill, Landaff, Littleton, and Monroe.
Representing the two utilities at the Jan. 5 oral argument before the state’s high court will be attorney Margaret Nelson. Representing the DRA will be Assistant New Hampshire Attorney General Laura Lombardi. Representing the towns will be attorneys Boldt, Tanguay, and Walter Mitchell.
The case could have widespread ramifications on utility property appraisal in the future, beyond the two current utilities.
Since the appeals were filed, three more utilities also standing to gain through reduced property taxes have filed briefs in support of Eversource and the NHEC - Unitil Energy Systems, Northern Utilities, and Granite State Gas Transmission.
Nov 26, 2016
Municipalities across the state, including many in the North Country, have filed argument briefs in their years-long tax abatement fight against two big utilities, a case now scheduled to be heard before the N.H. Supreme Court Jan. 5.
The municipalities argue the appraisals provided by Eversource Energy and the New Hampshire Electric Cooperative as well as by the New Hampshire Department of Revenue Administration in towns are unreliable, do not provide an opinion of the value of the actual assets in the individual towns, and the DRA’s “net book approach … allowed property to escape taxation.”
At stake for the two utilities are millions of dollars saved through significantly reduced property taxes, a potential boost to company profits.
At stake for small towns, which argue the utilities are trying to get out of paying their fair share of taxes, is a reduction in tax revenue that could put a strain on town services and increase the taxes of all other taxpayers.
In July 2015, the New Hampshire Board of Tax and Land Appeals ruled in favor of the towns, concluding the unit method of valuation sought by Eversource and NHEC - a method through which they seek to reduce their property taxes by one-half to two-thirds - does not represent the fair market value of the utility properties.
Eversource and NHEC promptly appealed to the New Hampshire Supreme Court.
Representatives for Eversource have equated higher property taxes with increased costs for ratepayers, but neither utility has provided a guarantee that rates would be reduced or stay the same if their property taxes were likewise reduced.
The New Hampshire Public Utilities Commission, which regulates utilities, is the entity that approves or denies a requested rate increase.
In its argument brief filed with the New Hampshire Supreme Court in September, Eversource argues it faces regulatory restraints on income and operations and that “dramatically inconsistent assessments, including assessments more than doubling in one year in one community,” compelled it to file the appeals.
Eversource also claims the DRA establishes the market value of utility property for the state utility tax and municipal assessments “vary widely” from the DRA’s valuations.
In an argument brief filed at the New Hampshire Supreme Court in early November, however, attorneys for the towns argue, “Over 50 years ago, this court recognized that using net book to value utility property is inherently unfair and impractical because, in part, it does not address the changes in the of the assets that occur over long periods of time.”
The towns also took aim at the DRA, the agency responsible for supervising assessments in the state, which they charge with providing appraisals with errors and allying with the two utilities at the expense of the towns they represent.
In its brief, the DRA argues the BTLA ruling jeopardizes the state’s equalization process, which it said relies on the allocated values from the DRA appraisals and puts at risk the local assessments in about one-third of all N.H. municipalities that use the DRA utility property appraisal values for local tax assessing.
If the BTLA ruling stands, the DRA argues, the utility property tax that the agency said last year generated nearly $43 million in revenue could be undermined.
What the agency did not say in its argument, however, is if utility property values in some towns are being unnecessarily under-assessed.
In many small towns, utility property makes up a large chunk of their tax base, which, if they lose the case, could erode by millions of dollars.
The municipalities also argue the DRA is not being transparent and is not allowing selectmen and the public to review the basis for the agency’s valuation for local tax purposes.
“Basically, the DRA is saying ‘trust us, we’ll get it right, and we are not going to allow anyone to check our work,” attorneys Jae Whitelaw, Christopher Boldt and Shawn Tanguay, representing the towns, wrote in their brief. “This effort at reassurance rings hollow.”
Stephan Hamilton, director of the DRA’s Municipal and Property Division, was contacted several times about the case, but declined to comment.
Some towns have been spending tens of thousands of dollars annually fighting the appeals that began in 2011 and have continued each year thereafter.
Eversource, the largest electric utility in New Hampshire, is suing about one-quarter of New Hampshire’s municipalities, most of them small towns and including Littleton, Bath, Haverhill, Lancaster, Dalton, Northumberland, Whitefield, Landaff, Stark, Stratford and Stewartstown.
The municipalities argue the appraisals provided by Eversource Energy and the New Hampshire Electric Cooperative as well as by the New Hampshire Department of Revenue Administration in towns are unreliable, do not provide an opinion of the value of the actual assets in the individual towns, and the DRA’s “net book approach … allowed property to escape taxation.”
At stake for the two utilities are millions of dollars saved through significantly reduced property taxes, a potential boost to company profits.
At stake for small towns, which argue the utilities are trying to get out of paying their fair share of taxes, is a reduction in tax revenue that could put a strain on town services and increase the taxes of all other taxpayers.
In July 2015, the New Hampshire Board of Tax and Land Appeals ruled in favor of the towns, concluding the unit method of valuation sought by Eversource and NHEC - a method through which they seek to reduce their property taxes by one-half to two-thirds - does not represent the fair market value of the utility properties.
Eversource and NHEC promptly appealed to the New Hampshire Supreme Court.
Representatives for Eversource have equated higher property taxes with increased costs for ratepayers, but neither utility has provided a guarantee that rates would be reduced or stay the same if their property taxes were likewise reduced.
The New Hampshire Public Utilities Commission, which regulates utilities, is the entity that approves or denies a requested rate increase.
In its argument brief filed with the New Hampshire Supreme Court in September, Eversource argues it faces regulatory restraints on income and operations and that “dramatically inconsistent assessments, including assessments more than doubling in one year in one community,” compelled it to file the appeals.
Eversource also claims the DRA establishes the market value of utility property for the state utility tax and municipal assessments “vary widely” from the DRA’s valuations.
In an argument brief filed at the New Hampshire Supreme Court in early November, however, attorneys for the towns argue, “Over 50 years ago, this court recognized that using net book to value utility property is inherently unfair and impractical because, in part, it does not address the changes in the of the assets that occur over long periods of time.”
The towns also took aim at the DRA, the agency responsible for supervising assessments in the state, which they charge with providing appraisals with errors and allying with the two utilities at the expense of the towns they represent.
In its brief, the DRA argues the BTLA ruling jeopardizes the state’s equalization process, which it said relies on the allocated values from the DRA appraisals and puts at risk the local assessments in about one-third of all N.H. municipalities that use the DRA utility property appraisal values for local tax assessing.
If the BTLA ruling stands, the DRA argues, the utility property tax that the agency said last year generated nearly $43 million in revenue could be undermined.
What the agency did not say in its argument, however, is if utility property values in some towns are being unnecessarily under-assessed.
In many small towns, utility property makes up a large chunk of their tax base, which, if they lose the case, could erode by millions of dollars.
The municipalities also argue the DRA is not being transparent and is not allowing selectmen and the public to review the basis for the agency’s valuation for local tax purposes.
“Basically, the DRA is saying ‘trust us, we’ll get it right, and we are not going to allow anyone to check our work,” attorneys Jae Whitelaw, Christopher Boldt and Shawn Tanguay, representing the towns, wrote in their brief. “This effort at reassurance rings hollow.”
Stephan Hamilton, director of the DRA’s Municipal and Property Division, was contacted several times about the case, but declined to comment.
Some towns have been spending tens of thousands of dollars annually fighting the appeals that began in 2011 and have continued each year thereafter.
Eversource, the largest electric utility in New Hampshire, is suing about one-quarter of New Hampshire’s municipalities, most of them small towns and including Littleton, Bath, Haverhill, Lancaster, Dalton, Northumberland, Whitefield, Landaff, Stark, Stratford and Stewartstown.
In Littleton, Eversource is seeking to reduce its total assessment of about $22 million to $11 million.
In Lancaster, for the 2011 tax year, the company wants to cut its assessment from $7.38 million to $3 million.
NHEC’s tax abatement appeals, filed at both the BTLA and superior court, are against towns that include Bath, Colebrook, Haverhill, Landaff, Littleton, and Monroe.
Representing the two utilities at the Jan. 5 oral argument before the state’s high court will be attorney Margaret Nelson. Representing the DRA will be Assistant New Hampshire Attorney General Laura Lombardi. Representing the towns will be attorneys Boldt, Tanguay, and Walter Mitchell.
The case could have widespread ramifications on utility property appraisal in the future, beyond the two current utilities.
Since the appeals were filed, three more utilities also standing to gain through reduced property taxes have filed briefs in support of Eversource and the NHEC - Unitil Energy Systems, Northern Utilities, and Granite State Gas Transmission.
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Towns named in the suits include: Andover, Bridgewater, Croydon, Danville, Durham, Dunbarton, Fremont, Littleton, New Hampton, Pembroke, Randolph, Sandwich, Sunapee, Bath, Bradford, Bristol, Landaff, Milan, Bennington, Chester, Dalton, Hampstead, Haverhill, Hinsdale, Hopkinton, Lancaster, Lincoln, Madison, Marlborough, Newport, Pelham, Raymond, Springfield, Stratford, Washington, Whitefield, Unity, Hinsdale, Plymouth, Antrim, East Kingston, Francestown, Gorham, Greenville, Henniker, New Ipswich, Northfield, South Hampton, Stark, Stewartstown, Stoddard, Warner, Wilmot, Nelson, Hollis, Northumberland, Colebrook, Monroe. (58)