The wind energy sector is not seeking a complete exemption from rates but it has proposed amendments, which have not reached the floor of either House, to reduce its rates liability.
The Limerick revaluation, like all revaluations, redistributes the rates burden based on contemporary property values. A revaluation can cause significant shifts in rates liability between different sectors, particularly where a considerable period has elapsed since the last similar exercise. From experience of revaluations to date, up to 65% of ratepayers in general can see a reduction in their rates. Given that the total revenue from rates is capped after a revaluation, the reductions enjoyed by the 65% will result in an increase for the other 35%.
The Limerick revaluation has led to large increases in the valuation of wind farms and, subject to appeal, many of their rates will rise, in some cases by 200%. The increases experienced by wind farms as a category of rateable property are on the higher end of the scale across the board. Limerick is the first revalued rating authority with a significant number of wind farms. The ten Limerick wind farms recently revalued are very modern, have large generating capacity and date from approximately 2008 onwards. They comprise some of the latest technology in a rapidly developing area.
This contrasts with the position heretofore. The first wind farm valued by the Valuation Office was developed in the early 1990s in County Mayo. The valuation assessed on that first wind farm in County Mayo was subsequently relied upon as a basis for valuing all other wind farms that came on stream, including the Limerick wind farms before the revaluation process. All of these wind farms were valued under the revision provisions set out in Part 6 of the Valuation Act 2001. This reflected the state of wind energy technology in the early 1990s and the financial and economic conditions that prevailed in the late 1980s. The valuations now assessed in Limerick are taking a view of the current state of the wind energy industry and the economic conditions that prevailed in late 2012.
The Commissioner of Valuation is independent in the exercise of his function and the Valuation Act does not accord the Minister any function in the valuation of a property or in an appeal. The legislation provides for a number of avenues of appeal. There is an appeal to the Commissioner of Valuation, a subsequent appeal to the Valuation Tribunal and an appeal to the High Court on a point of law. It is important to allow for the independent process of valuation and appeal to take its course without any knee-jerk reactions before it concludes.
Some people involved in the wind energy sector called for a pause in the Bill’s progress. It is too important and there are too many ratepayers who deserve and need a modern valuation system. However, this does not mean that we are closing the door on a partial exemption, if that is the best route to take after full consideration of the facts. Another legislative vehicle can be found to introduce a change to the Valuation Act 2001, if that is what is deemed most appropriate.