Burgess BioPower shares revenue for sale of RECs with Berlin

By Burgess BioPower | July 10, 2020

Burgess BioPower made a payment July 9 of $523,000 to Berlin, the first payment to the city from the facility’s sale of renewable energy certificates (RECs) as outlined in the payment-in-lieu-of-taxes (PILOT) agreement. City officials will use the funds to reduce one of the state’s highest property tax rates by a full dollar per thousand dollars of valuation and to purchase vital new equipment for the Public Works Department.

“We’ve been working hard for many years to reduce Berlin’s tax rate, one of the highest in the state,” said Jim Wheeler, city manager, City of Berlin. “The agreement with Burgess BioPower to share revenue from the facility’s sale of renewable energy certificates has helped us achieve what has been out of reach for so long: lowering our property taxes. Reduced taxes will help to spur additional development, which in turn could lead to future decreases in the tax rate.”

In addition to reducing the city’s tax rate, the renewable energy certificates payment will fund the city’s purchase of necessary equipment for snow removal and waste management. Berlin will purchase a new snowplow, salt and sand truck and front-end loader mounted snow blower—all essential equipment for an area that sees snow during a large portion of the year. The city will also buy a new garbage packer to be stationed at the Public Works garage.

“Many of those who work at Burgess BioPower live in Berlin, so we know just how uplifting lower taxes will be for residents and businesses,” said David Walker, plant manager, Burgess BioPower. “We are committed to being a good neighbor and we’re proud that our financial contributions can help the city make much-needed capital improvements, reduce the tax rate and purchase necessary equipment. Nothing makes us happier than seeing these positive impacts firsthand.”

A renewable energy certificate represents one megawatt hour produced by a certified renewable energy facility. Utility companies and other retail electricity suppliers purchase these renewable energy certificates from generation facilities, including Burgess BioPower, to meet the thresholds specified by the state’s renewable portfolio standard (RPS). This program promotes the development of renewable energy sources and environmental goals.

Sharing the revenue from the sale of Burgess BioPower’s renewable energy certificates is just one of the many ways the facility contributes significantly to the local economy through its payments-in-lieu-of-taxes (PILOT) agreement with Berlin; these payments totaled $1.2 million in Fiscal Year 2019. In May 2018, Berlin completed a two-year, $7 million capital improvement project for Route 16, which was funded in part by Berlin’s PILOT payments. 

According to a recently released economic impact study, without the much-needed revenue from Burgess’ ongoing PILOT payments, Berlin’s tax rate would have increased by 8 percent in 2019. Berlin taxpayers (with a home at median value of $88,300) saved approximately $287 in property taxes they would have otherwise paid. With Burgess’ PILOT agreement calling for escalating payments to the city through 2033, these savings are expected to increase.

The biomass facility also paid water and sewer fees of $954,472, which accounted for approximately 30 percent of all water charges in the city and 10 percent of sewer fees, an indication of how much property owners would have seen water and sewer bills increase without the biomass facility.

Economic activity resulting from Burgess BioPower produced an estimated $4.84 million in taxes, fees and charges paid to not only Berlin, but also to the state and other local governments in 2019. The recently released economic impact study also found Burgess BioPower injects nearly $70 million into New Hampshire’s economy annually.

During Burgess BioPower’s construction and continued operation, Coos County has stopped losing jobs as it had over the previous decade. The economic impact study found Burgess BioPower’s annual operations supported 240 jobs in 2019, of which nearly 90 percent are in Coos County. These jobs accounted for $12.2 million in labor income in Coos County, and another $2.4 million in other parts of the state. As the plant’s biomass fuel is sourced locally, logging and sawmill jobs accounted for 40 percent of the supported jobs across the state.

The economic impact study is available upon request.