N.H. Supreme Court Accepts Big Utilities Tax Appeals
Eversource, NHEC Continue To Sue North Country Towns In New Filings
The N.H. Supreme Court has accepted appeals filed by the N.H. Electric Cooperative and Eversource Energy, both of which are suing a host of towns across the state, including many in the North Country, in an effort to cut their property assessments by one half to two-thirds.
At stake for small towns - which have been spending tens of thousands of dollars annually fighting the appeals and argue the case is about tax fairness and protecting their tax base - is the loss of large tax revenues that if lost could drive up the taxes of everyone else.
The Supreme Court accepted the appeals Dec. 18.
Monday was the last day for the parties to file for mediation to strike a compromise, but with no intent filed, the appeals will now go forward.
"In the past, there have been attempts at mediation, but we have agreed with the companies that mediation is not warranted at this stage of the game," Chris Boldt, an attorney for some of the towns, said Wednesday.
NHEC and Eversource, formerly called Public Service of N.H., are appealing a July decision by the N.H. Board of Tax and Land Appeals that denied the dozens of tax abatements filed by the companies for tax years 2012 and 2013.
At the same time, both companies have filed new lawsuits at the BTLA against the towns for tax years 2013 and 2014.
For their utility property assessments, NHEC and Eversource, which have submitted their own appraisals in their cases, seek to use the N.H. Department of Revenue Administration's (DRA) 83-F formula, the unit method of valuation that sets the utilities' share of the statewide property tax, specifically their contribution to the state education tax.
The towns, however, argue the DRA method is used for a different tax and does not reflect the true market value of the utility properties, but the utilities are nonetheless attempting to use it to drive their assessments below fair market value.
In its decision, the BTLA agreed with the municipalities and stated, "The board finds merit in many of the municipalities' arguments regarding why the taxpayer did not meet its burden of proving disproportionality of each local assessment" and said the appraisals provided by the NHEC and Eversource did "not result in credible opinions of market value."
When NHEC and Eversource, parent company of Northern Pass, began swamping towns with tax abatement appeals beginning several years ago, the towns teamed up to share legal expenses.
The state's high court could hear the appeals in six months to a year, said Boldt, who added he is confident the BTLA's decision is strong and will stand up under appeal.
On Wednesday, Attorney Margaret Nelson, who is representing both Eversource and NHEC, was asked what she thinks of the BTLA's decision and if she believes it will survive an appeal, but declined comment and deferred to the utilities' spokespersons.
Although Eversource spokespersons have said their company appealed in those municipalities where it considered the assessment values to be "extreme outliers," BTLA records show Eversource suing about 25 percent of New Hampshire's municipalities, most small towns and many in the North Country, including Littleton, Bath, Haverhill, Lancaster, Dalton, Northumberland, Whitefield, Landaff, Stark, Stratford, and Stewartstown.
NHEC's 2013-2014 tax abatement appeals were filed against towns that include Bath, Colebrook, Haverhill, Landaff, Littleton, and Monroe.
While spokespersons for both utilities have equated higher property taxes with higher rates for their customers, the N.H. Public Utilities Commission must first approve any rate increase proposed by a utility.
In 1994, in a superior court case called PSNH v. Bow, the N.H. Supreme Court affirmed a trial court's ruling that rejected the unit method in determining fair market value of PSNH property.
Since then, however, the utilities have had the money to file swarms of tax abatement appeals against towns struggling to come up with the cash to fight them.
In Littleton, for tax year 2012, Eversource seeks to cut its assessment from $21.9 million to $11.3 million.
In Lancaster for the 2011 tax year, the company wants to cut its assessment from $7.38 million to $3 million.
In Whitefield, for tax year 2011, Eversource seeks to reduce its taxable real estate from $12.9 million to $5 million.
In Dalton for 2011, the company seeks to cut a $3.7 million assessment to $1.2 million.
In 2014, so many Coos towns were fighting appeals by big utilities that the Coos County Utility Valuation Defense Fund, set up by the county to help towns fighting valuation appeals, soon began running out of cash.
In June of that year, a total of $58, 000 in requests were made from the towns of Whitefield, Colebrook, Stark, Stratford, Pittsburg, Dalton and Dummer.
At that time, however, the fund was down to $40,000, following previous funding requests from three other towns that included Lancaster.