APPEAL OF PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE D/B/A EVERSOURCE ENERGY (New Hampshire Board of Tax and Land Appeals)
Argued: January 12, 2017
of Tax and Land Appeals
Sulloway & Hollis, P.L.L.C., of Concord (Margaret H.
Nelson and Derek D. Lick on the brief, and Ms. Nelson
orally), for the petitioner, Public Service Company of New
Hampshire d/b/a Eversource Energy.
Donahue, Tucker & Ciandella, PLLC, of Meredith
(Christopher L. Boldt and Eric A. Maher on the joint brief,
and Mr. Boldt orally), for respondents Town of Bennington,
Town of Chester, Town of Dalton, Town of Hampstead, Town of
Haverhill, Town of Hinsdale, Town of Hopkinton, Town of
Lancaster, Town of Lincoln, Town of Madison, Town of
Marlborough, Town of Newport, Town of Pelham, Town of
Plymouth, Town of Raymond, Town of Springfield, Town of
Stratford, Town of Unity, Town of Washington, and Town of
& Hatfield, of Concord (Barton L. Mayer on the joint
brief), for respondents Town of Antrim, Town of East
Kingston, Town of Francestown, Town of Gorham, Town of
Greenville, Town of Henniker, Town of New Ipswich, Town of
Northfield, Town of South Hampton, Town of Stark, Town of
Stewartstown, Town of Stoddard, Town of Warner, and Town of
Mitchell Municipal Group, P.A., of Laconia (Judith E.
Whitelaw and Walter L. Mitchell on the joint brief), for
respondents Town of Andover, Town of Bridgewater, Town of
Croydon, Town of Danville, Town of Dunbarton, Town of Durham,
Town of Fremont, Town of Littleton, Town of New Hampton, Town
of Pembroke, Town of Randolph, Town of Sandwich, Town of
Sullivan, and Town of Sunapee.
Gardner, Fulton, & Waugh, PLLC, of Lebanon (Shawn M.
Tanguay on the joint brief), for respondents Town of Bath,
Town of Bradford, Town of Bristol, Town of Landaff, and Town
of Hollis, self-represented respondent, filed no brief.
Bradley & Faulkner, P.C., of Keene (Gary J. Kinyon), for
respondent Town of Nelson, filed no brief.
A. Foster, attorney general (Laura E. B. Lombardi, senior
assistant attorney general, on the brief), for the New
Hampshire Department of Revenue Administration, as amicus
Atwood, LLP, of Portland, Maine (Jonathan A. Block on the
brief), for Unitil Energy Systems, Inc., Northern Utilities,
Inc., and Granite State Gas Transmission, Inc., as amici
A. Silva, Cordell A. Johnston, Stephen C. Buckley, and
Margaret M.L. Byrnes, of Concord, for New Hampshire Municipal
Association, by brief, as amicus curiae.
petitioner, Public Service Company of New Hampshire d/b/a
Eversource Energy (PSNH), appeals an order of the New
Hampshire Board of Tax and Land Appeals (BTLA) denying 77 of
PSNH's 86 individual tax abatement appeals on its
property located in 31 of the respondent municipalities for
tax year 2011 and 55 of the respondent municipalities for tax
year 2012. We affirm.
relevant facts follow. PSNH is a for-profit corporation that
provides electricity generation, transmission, and
distribution services in approximately 210 communities and to
490, 000 homes and businesses. PSNH owns nine hydroelectric
facilities and three fossil fuel generating plants. The New
Hampshire Public Utilities Commission (PUC) has granted PSNH
exclusive franchises to provide certain electricity services
within its territory. The PUC regulates PSNH's
electricity rates. The parties' experts agree that PSNH
is professionally managed and that its property is fully
operational, in good condition, and is well maintained.
municipality's selectmen are required to appraise the
value of the property located within the municipality,
including utility property. See RSA 75:1 (Supp.
2016); RSA 72:8 (2012); see also RSA 72:9 (2012)
(stating that utility property that is situated in more than
one town "shall be taxed in each town according to the
value of that part lying within its limits").
Separately, the New Hampshire Department of Revenue
Administration (DRA) appraises PSNH's property at the
state level for purposes of the RSA chapter 83-F utility tax.
See RSA ch. 83-F (2012 & Supp. 2016).
filed tax abatement appeals to the BTLA for 86 municipal
assessments of PSNH's property that occurred between 2011
and 2012. The BTLA held a consolidated hearing over eight
days in February 2015 regarding PSNH's tax abatement
appeals. During the hearing, PSNH presented expert witness
testimony and an appraisal of PSNH's property from Thomas
K. Tegarden, owner of Tegarden & Associates, Inc. PSNH
also presented testimony from Scott E. Dickman, a New
Hampshire certified general appraiser employed by the DRA in
its Property Appraisal Division as a utility appraiser.
Additionally, PSNH submitted the DRA appraisals that Dickman
had prepared for the purpose of the RSA chapter 83-F state
utility property tax.
Tegarden and Dickman used the "unit method" to
appraise PSNH's property. Under the unit method, an
appraiser first values all of a utility's property as a
whole and then allocates that whole unit value to the
individual municipalities where the utility's property is
located. To derive their unit values, Tegarden and Dickman
primarily used two approaches: a cost approach, which
estimated the net book value (NBV) of PSNH's property by
calculating the original cost less book depreciation (OCLBD)
of PSNH's property; and an income approach, which
estimated the value of PSNH's property by capitalizing
the company's net operating income. Additionally, at
PSNH's request, the BTLA took judicial notice of the
DRA's equalization process.
municipalities presented expert testimony and appraisals from
several certified New Hampshire assessors: Gary J. Roberge,
CEO of Avitar Associates of New England, Inc.; Frederick H.
Smith, of Brett S. Purvis & Associates; Wil Corcoran and
Monica Hurley, of Corcoran Consulting Associates, Inc.; and
George E. Sansoucy, of George E. Sansoucy, PE, LLC. Roberge
estimated the value of PSNH's property in the
municipalities for which he was engaged using a cost approach
that calculated the reproduction cost new less depreciation
(RCNLD) of the property. To estimate the value of PSNH's
property in the municipalities for which he was engaged,
Sansoucy reconciled the results of four approaches: a sales
comparison approach; an RCNLD cost approach; an income
approach that assumed a sale to a privately-owned, regulated
utility; and a second income approach that assumed a sale to
a publicly-owned utility. Sansoucy also prepared an appraisal
report for the municipality that had originally been assessed
by Corcoran. Smith appraised only the value of PSNH's
land while relying upon the DRA's assessment of
PSNH's other property for each municipality for which he
was engaged. After the municipalities presented their
experts, PSNH presented rebuttal testimony from Tegarden and
from Dr. Hal Heaton, a professor of finance at Brigham Young
University. Heaton did not provide an opinion of PSNH's
2015, the BTLA issued a thirty-eight page order granting nine
of PSNH's abatement appeals and denying the remainder.
For the appeals that it granted, the BTLA found that the
municipal assessors acknowledged a material degree of
overassessment of the property at issue. Regarding PSNH's
other appeals, the BTLA found that the Tegarden appraisals
and DRA appraisals did not result in a credible opinion of
market value and ruled that PSNH had not met its burden of
proving that the local assessments were disproportional.
Additionally, the BTLA reviewed the criticisms leveled at the
assessment methodologies used by the municipal assessors, as
well as the municipalities' responses to those
criticisms, but it ruled that it need not address those
points because challenges based on assessment methodology do
not, and cannot, carry PSNH's burden of proving
moved for rehearing, which the BTLA denied by written order
in September 2015. This appeal followed.
standard for reviewing BTLA decisions is set forth by
statute. See RSA 541:13 (2007); RSA 71-B:12 (2012)
(providing that BTLA decisions may be appealed in accordance
with RSA chapter 541 (2007)). The BTLA's findings of fact
are deemed prima facie lawful and reasonable.
See RSA 541:13; Appeal of Town of
Charlestown, 166 N.H. 498, 499 (2014). "To prevail,
the [appellant] must show by a preponderance of the evidence
that the BTLA's decision was clearly unreasonable or
unlawful." Town of Charlestown, 166 N.H. at
499; see also RSA 541:13. "We will not set
aside or vacate a BTLA decision except for errors of law,
unless we are satisfied, by a clear preponderance of the