Granite Ridge to Receive Substantial Tax Abatement

By Kaitlin Bedell

Town Manager Kevin Smith spoke at the Town Council’s most recent July 19 meeting to clarify what he deemed an inaccurate statement printed in the Londonderry Times, which falsely quoted Smith from a recent meeting.
The article, printed on July 2, referenced Smith’s conversation about the power plant during a June 24 Budget Committee meeting.
Smith claimed the story incorrectly credited him with stating that a recent tax abatement awarded to Granite Ridge would likely raise residential property taxes in order to make up for the loss.
“I wanted to clarify the record because neither of these two statements are accurate,” Smith said.
Smith said that the tax abatement will have no impact on the town’s operating budget and that it is dealt with entirely separately.
According to Smith, the tax abatement is handled through the abatement process. This means it will have no impact on the operating budget, which Smith said he stated in that June 24 meeting.
Smith also said he wanted to clarify that it is unknown what impact the tax abatement will have on residential property taxes.
The tax rate is decided in October where there are several different factors which determine if property taxes will go up or down for the following year.
“It’s much too early to tell at this point what impact it will have on property taxes,” Smith said.
After that, a presentation about the Granite Ridge Power Plant abatement continued with Attorney Mike Ramsdell presenting the settlement agreement reached with the power plant.
According to Ramsdell, Granite Ridge, now known as Calpine, has a constantly changing value based on the projections it has for future years.
The plant falls under the ISO New England Forward Capacity market, which oversees the energy climate for most of New England’s power system.
Each year power producers such as Granite Ridge commit to producing a certain amount of energy per year in exchange for a fixated price as agreed upon.
Ramsdell said that when the capacity payments are high, the facility makes more revenue and is worth more. When the capacity payments are low, it has the opposite effect.
These commitments happen almost three years out as the energy each year is unpredictable. This makes it difficult for revenue and tax impacts to be estimated as they are solely based on the energy sources’ projections for future years.
Chairman John Farrell pointed out that the power plant has paid about 120 million dollars in taxes over the last 18 years and 80 million dollars of that has gone to the school districts. At the end of this, the Granite Ridge Plant will pay approximately 5 million dollars in taxes per year.
Kevin Smith also broke down some of the numbers for the dollar figures that the town owes in tax credits.
This money will be spread out over a five-year period under this agreement. In the years 2021, 2022, and 2023 the town will credit them $1,749,453.
In the years 2024 and 2025 the town will credit the power plant $693,620.
“We had a discussion with the school board and with everyone else to explain to them that until we build up new revenue that we’re working on as fast as possible, you need to look hard at your budgets,” Farrell said. “You need to hold the line while we work through this.

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