BELLOWS FALLS — Windham Superior Court Judge John Wesley has sided with the town of Rockingham in a lawsuit against TransCanada, affirming the Grand List valuations set in 2012, 2013, and 2014 for the utility's hydroelectric facility.
“The Court finds that the Town has produced sufficient reliable evidence of its fair market value assessment of the Bellows Falls hydroelectric facility at $130,000,000, yielding the value of the portion in Rockingham at $108,495,400,” Wesley wrote in the Aug. 21 court ruling.
The company has owned the facility in downtown Bellows Falls since 2009. It was on the 2012 grand list at $108.11 million, the same value at which it had been listed for 2010 and 2011.
In contrast, TransCanada's consultant argued that the property is worth $84 million, with $67 million of the property in Rockingham, a value that Wesley described in the ruling as “blatant undervaluation.”
TransCanada had not challenged the 2010 or 2011 valuations, but it appealed the April 1, 2012 listing.
In 2013, in response to this appeal and others by TransCanada, the Vermont General Assembly authorized funds for an appraisal of TransCanada's properties on the Connecticut River as of April 1, 2012.
George E. Sansoucy, P.E., LLC was retained by the state to perform the appraisals. Sansoucy is a registered engineer and certified real estate appraiser.
According to Assistant Attorney General William Griffin, who is involved in the state's interest in this and other similar litigation of “eight or nine properties” TransCanada owns along the Connecticut River, six have gone to litigation.
One was settled out of court (Vernon), one was just settled by the court (Rockingham), and one (Newbury) is awaiting the decision following the trial.
Barnet has two cases pending trial dates. TransCanada has also appealed the valuation of the Deerfield River hydro project in Somerset.
At trial, TransCanada retained La Capra Associates, a Boston-based consulting firm, and its principal consultant, Daniel Peaco, to provide a competing valuation of the Bellows Falls facility.
Peaco concluded that on April 1, 2012, the fair market value of the Bellows Falls facility was $84 million, with $67 million attributable to the town.
Wesley not only found in favor of the town, but in his conclusion, he questioned the “credibility” of the arguments and methods that La Capra used to formulate the property's worth.
The court recognized the difficulty of assessing properties but found in favor of Sansoucy's approaches to valuation.
Griffin praised Sansoucy's testimony during the three-day trial in May.
“I think our witness was very clear and very thorough,” he said.
The town's attorney, Richard Saudek, said Peaco is a “familiar face” to regulatory commissions as an expert witness for utilities.
As one of La Capra's leading consultants on what the firm calls “regulatory policy, market environments, resource alternatives, analytics, and stakeholder perspectives that bear decision-making in the industry,” Peaco “frequently offers expert testimony on these matters in regulatory proceedings and in civil litigation,” according to La Capra's website.
But where simple disputation can sway outcomes in those situations, in court, the burden of proof is on the town to validate their valuations credibly, Saudek noted.
Wesley found TransCanada's arguments without credibility and cited Sansoucy's “overall superior credibility” in describing the methodology for determining the fair-market value of the hydroelectric plant.
“By contrast, TransCanada's resort to inputs and analysis resulting in a valuation far below prior years' assessments, and at great variance with recent sales data, undermined the credibility of Mr. Peaco and any reliance on his analysis,” the judge continued.
Wesley wrote that “TransCanada presented no credible alternative fair market value.”
“As the Court has previously noted, a property value assessment is not an exact science, and disparity between opinions as to the reasonable valuation of a hydroelectric plant is unsurprising,” he continued. “Here, however, the Court must conclude that only one reasonable value was proposed.
“The value TransCanada proposes is irreconcilable with the great weight of evidence and testimony presented in this matter, and TransCanada's blatant undervaluation of the facility compels the Court to resolve any doubts arising from the inevitable limits on precise predictions in favor of the Town.”
30 days to appeal
Town Manager Willis “Chip” Stearns III told The Commons on Monday that “TransCanada has an appeal of their value in the current 2015 Grand List that [has] been presented to the Board of Civil Authority (BCA). Members are performing the required site visit today.”
Whether TransCanada will appeal that decision is unclear. “The decision just rendered covers 2012, 2013, and 2014,” Stearns noted, adding that the ruling might influence any possible appeal for its 2015 assessment.
“We could simply be starting this same process all over,” Stearns said.
TransCanada has 30 days in which to file an appeal on the Rockingham judgment.
“We are currently reviewing the court's decision and evaluating next steps,” spokeperson Sharan Kaur wrote in a email to The Commons.