Vermont Transco LLC v. Town of Vernon
109 A.3d 423
Vt.2014Background
- Taxpayer Vermont Transco LLC challenges the Town of Vernon's 2011 grand list valuation of utility property at $92,023,700.
- Property includes five substations, seven transmission lines, a fiber-optic line, land, and utility easements.
- Appraiser used replacement cost new depreciated, with a depreciation method (Town’s Iowa Curve/straight-line debate) and consideration of easements value.
- Town relied on Handy-Whitman cost data with Iowa Curve depreciation; taxpayer presented alternative depreciation arguments and expert analyses.
- Earlier Vermont cases (1989–2002) contemplated depreciation methods for electric transmission facilities; a prior Vernon decision approved the Iowa Curve approach.
- The court remands for additional findings on asset lifespans, first-year depreciation, and exclusion of easements from taxation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Depreciation method | Transco urges Iowa Curve depreciation as required by prior Vernon decisions. | Town/appraiser favored straight-line depreciation with Town’s lifespans and rejected Iowa Curve. | Issue not preserved; no ruling on Iowa Curve here. |
| Lifespan of equipment for depreciation | State appraiser failed to provide detailed findings on lifespans (economic vs useful life) and appropriate methods. | Town's 65–90 year lifespans supported by evidence; not adequately addressed by appraiser. | Remanded for fuller findings on lifespans. |
| First-year depreciation | Assets placed in service in 2010 should have been depreciated for 2011; needed explicit findings on this issue. | Appraiser had discretion to accept Town methodology without detailed findings. | Remanded for explicit findings addressing first-year depreciation. |
| Inclusion of utility easements | Easements cannot be taxed; value improperly included in grand list. | Town included easement value consistent with its approach and classification. | Easements not taxable; reversed and remanded for removal of easement value. |
Key Cases Cited
- Vermont Elec. Power Co. v. Town of Vernon, 174 Vt. 471 (2002) (mem. upheld Iowa Curve method for depreciation in Vernon context)
- Vermont Elec. Power Co. v. Town of Cavendish, 158 Vt. 369 (1992) (mem. noted use of Handy-Whitman/Iowa Curve in appraisal)
- Beach Props., Inc. v. Town of Ferrisburg, 161 Vt. 368 (1994) (findings of fact required; recitals insufficient)
- Adams v. Town of West Haven, 147 Vt. 618 (1987) (burden on taxpayer to show appraisal incorrect)
- Saufroy v. Town of Danville, 148 Vt. 624 (1987) (quality of administrative findings required)
- Kachadorian v. Town of Woodstock, 144 Vt. 348 (1984) (findings must state what was decided and how)
- City of Barre v. Town of Orange, 152 Vt. 442 (1989) (presumption and validity considerations in appeals)
- Vanderminden v. Town of Wells, 2013 VT 49 (2013) (burden on taxpayer; nonuniform valuation standards noted)