A new series of tax breaks will allow the Lackawanna wind turbines along Lake Erie to get some much needed repairs.
The Erie County Industrial Development Agency on Wednesday unanimously approved a 15-year payment in lieu of taxes (PILOT) agreement with the owners of the 10 malfunctioning turbines, Erie Wind and Niagara Wind Power.
In return, the companies — both subsidiaries of TerraForm Power — will make $21.46 million in repairs.
Erie County Executive Mark Poloncarz, who sits on the ECIDA board, said the wind turbines are not only an iconic landmark for the region, but are also a sign of the region’s commitment to clean energy.
“So if we’re not supporting this project and the wind turbines were allowed to fall apart on their own with no investment, it would have been kind of a sad state,” he told WBFO after the meeting. “Because if we’re saying we support renewable resources then we have to actually support the renewable resources.”
The current PILOT agreement for the wind turbines is paying the city of Lackawanna $80,000 a year.
Under this new PILOT agreement, Erie Wind and Niagara Wind Power will pay Lackawanna, the Lackawanna City School District and Erie County a total of up to $250,000 a year in the first ten years, and up to $262,500 in the last five years.
However, this will ultimately depend on how much megawatt hours the wind turbines produce.
Erie Wind and Niagara Wind Power will then be exempt from roughly $550,000 a year in taxes — a total of roughly $8.33 million over the 15-year agreement.
Eight of the Lackawanna turbines were installed in 2007 by Erie Wind as part of the Steel Winds I project. In 2012, Niagara Wind Power placed an additional two turbines in Lackawanna and an additional four turbines in the town of Hamburg as part of the Steel Winds II project.
However, the 14 total wind turbines across Lackawanna and Hamburg have been experiencing gearbox malfunctions and various blade defects due to failures in their design.
The companies plan to salvage the turbines by replacing the blades, gearbox and other components. The new blades will be 46 feet taller than the existing blades.
The repairs are expected to begin next year and will take six to nine months.
ECIDA Board President Brenda McDuffie noted the repair project will not only save the three permanent jobs attached to the wind turbines, but also create 22 construction jobs.
“This will create opportunities for our local labor to be employed and engaged with the repairs that have to be done,” she said.
Niagara Wind Power is also seeking a PILOT agreement for the four wind turbines in Hamburg. The Hamburg Industrial Development Agency will make the decision on that agreement.