By John Barrella

MIDDLEBOROUGH — The Select Board’s 20-year tax agreement with Kearsarge Energy works out to roughly $2,816 per megawatt per year for the lithium-ion battery facility planned on Jericho Road. Whether that figure represents a good deal for taxpayers is impossible to say from Monday’s meeting, because the board never established what the town would have collected by taxing the battery conventionally instead — the benchmark that state law governing generation-facility PILOT agreements treats as the reference point in the first place.

Kearsarge also told the board it operates more than 70 similar projects statewide, a built-in point of comparison that went unexamined. Board members pressed hard on fire safety and decommissioning costs. On whether the financial terms themselves hold up, the record is silent.

The Middleborough Select Board’s questioning of Kearsarge Energy on Monday night was, on the safety and liability side, reasonably thorough.

Board members asked what happens to the battery at the end of its life and received a specific answer from Andrew Bernstein, Kearsarge’s Managing Partner of Kearsarge Energy: the company would provide a decommissioning letter of credit or bond, held in the name of both the landowner and the town, based on an independent engineer’s signed cost assessment with inflation included. They asked what happens if the company is sold during the agreement, and Bernstein told them assignment provisions are built into the tax agreement. They asked about salvage value, residual value after 20 years, and what happens if better technology emerges.

They received answers.

Vice-Chair Thomas White said before the vote that, if the PILOT agreement was approved, he wanted the town to develop new regulations for this class of project before construction so “we don’t get left holding the bag.” Selectboard member Tracie Craig-McGee noted that the Planning Board is already working on zoning regulations.

That is a board doing its job on the questions it chose to ask.

But the financial question before the board was not whether a battery could be built safely. The board was voting specifically on the financial agreement — a 20-year payment arrangement with Kearsarge Energy.

The question that received far less attention was whether the agreement represented the best value for Middleborough taxpayers.

What the town agreed to

The approved agreement provides an initial payment of $11,000 per year, increasing by 2.5 percent annually for 20 years, for a total nominal payment of $280,991. Board member Brian Giovanoni read those terms into the motion before the vote.

Two parts of that structure deserve more examination.

The escalator was identified, but not analyzed.

The 2.5 percent annual increase was included in the agreement, but the discussion did not establish why that specific number represented the appropriate financial return for the town. Was it tied to inflation expectations? Was it tied to Proposition 2½ growth? Was it tied to the projected revenue potential of the battery over two decades?

Those questions were not answered.

An annual escalator provides predictability. That has value. A fixed payment stream allows both the town and the company to know what to expect.

But predictability and value are not the same thing.

If inflation averages 2.5 percent over the life of the agreement, the increase largely preserves the purchasing power of the original payment rather than creating significant additional revenue for taxpayers. If inflation exceeds that rate, the real value of the payment declines.

The escalator is not necessarily a problem. The unanswered question is whether it was the right escalator for the value of the asset.

The depreciation claim doesn’t hold up against how depreciation actually works.

Kearsarge has argued that the fixed 2.5 percent escalator gives the company certainty for financing and spares the town “years of assessment disputes as the equipment depreciates.”

That claim deserved more scrutiny than it received.

Massachusetts assessors don’t eyeball depreciation on commercial personal property. Machinery and equipment are typically valued using a replacement-cost-new-less-depreciation approach, applying published “percent good” tables tied to an asset’s classification and expected useful life — the same type of schedule used across manufacturing equipment, utility infrastructure, and other commercial personal property statewide. These tables exist precisely so that depreciation is predictable and defensible, not a recurring source of conflict.

Battery storage assets aren’t a valuation blank slate, either. The federal government already classifies standalone battery storage under a defined depreciation schedule for tax purposes — a seven-year recovery period under MACRS (Modified Accelerated Cost Recovery System). Whatever figure a Middleborough assessor ultimately applied, there was an established, external benchmark available to build from. This isn’t uncharted territory requiring the town to invent a methodology from scratch.

That matters because it reframes what Kearsarge was actually offering. If depreciation schedules for this asset class are standardized rather than contested, then “avoiding disputes” isn’t really the benefit being purchased. What the town gave up was the option value of a depreciation curve that starts high and declines — front-loaded revenue reflecting the asset’s real value in its most productive years — in exchange for a flat 2.5 percent climb from a lower base.

Assessment appeals do happen, but they tend to cluster around classification questions — is this real property or personal property, is it exempt, what’s the correct assessment date — not around whether a percent-good table was applied correctly. Kearsarge’s framing conflates the general possibility of any tax appeal with a specific claim about battery depreciation being unusually dispute-prone. Nothing presented at Monday’s meeting supported that specific claim.

None of this means a PILOT was the wrong tool. It means the “administrative certainty” argument was doing more rhetorical work than analytical work, and the board did not test it.

Avoiding future valuation disputes may provide administrative convenience for both the company and the town. But convenience alone does not establish that taxpayers received the better financial bargain.

The unanswered question remains whether the convenience of a fixed PILOT is worth giving up the opportunity to collect taxes based on the property’s actual assessed value over time.

The payment is fixed against a variable revenue stream.

Federal filings show the project is organized as Kearsarge Middleborough BESS LLC, which registered with the Federal Energy Regulatory Commission for market-based rate authority and exempt wholesale generator status, allowing it to participate in the New England wholesale electricity market.

Bernstein explained the economics of battery storage plainly during Monday’s meeting: the value of a battery is that it can “charge at night when prices are low and discharge when prices are high.”

That opportunity changes with market conditions. Electricity prices change. Capacity market revenues change. Clean energy incentives change.

The town’s PILOT payment does not change with any of them.

When asked what would happen if the company replaced equipment with newer technology during the agreement, Bernstein said that if Kearsarge changed the installation, it would allow the town to revisit the agreement.

No one asked whether the agreement could be revisited if the project performed significantly better financially than expected.

That can be a reasonable trade. A fixed payment is a certain payment.

But it is a trade, and the value of that trade was not fully explored.

The two numbers nobody put on the table

What full taxation would yield.

No one presented the figure Middleborough would collect if the battery were assessed and taxed as a conventional personal property asset rather than through a PILOT agreement.

That number is the essential benchmark — not simply as a matter of due diligence, but because Massachusetts law governing generation-facility PILOT agreements defines the payment as the equivalent of what the property would owe under full and fair cash valuation. Under the statutory framework these agreements are typically modeled on, municipal assessors are expected to estimate that figure — projecting the facility’s value and corresponding tax obligation for each year of the agreement — as part of structuring the deal itself. It is not an optional comparison; it is built into how the payment is supposed to be derived.

Without that number, taxpayers cannot know whether the PILOT represents a discount, a premium, or roughly the same revenue the town might receive through normal taxation.

Bernstein noted that after the 20-year agreement ends, the town could either negotiate a new agreement or tax the facility as a personal property asset.

That raises the obvious question:

If conventional taxation is the eventual outcome after 20 years, why was it not fully compared as an option today?

What other towns received.

Kearsarge told the board it has more than 70 projects in Massachusetts totaling 140 megawatts and that 131 comparable batteries are operating statewide.

That information provides a natural benchmark.

How does Middleborough’s agreement compare with similar communities? Did other towns negotiate higher payments, revenue-sharing provisions, or different structures?

Those comparisons were not presented.

Middleborough’s agreement works out to roughly $2,816 per megawatt per year.

Whether that is competitive is knowable.

It was not established.

Chair Teresa Farley’s dissent came closest to challenging the structure itself. After the vote was called, she explained that she did not believe a PILOT was appropriate for the project. Her objection was focused on the use of a PILOT rather than the specific price negotiated, but it was the only public comment from the board questioning the financial mechanism itself.

The scale cuts both ways

Year one’s $11,000 payment is small compared with Middleborough’s overall operating budget.

That is a reason not to overstate the agreement’s impact. This PILOT will not determine the town’s fiscal future.

But the relatively small size of the payment is also why the financial analysis mattered.

The board spent significant time reviewing fire safety, thermal runaway concerns, operating procedures, a site visit to Sterling, and the safety record of similar facilities. Those are important questions.

The board also made clear at the beginning of the discussion that it was voting only on the PILOT agreement — not whether the battery project itself would move forward.

The financial instrument was the question before them.

The safety review was thorough.

The valuation analysis was not.

---

This is an opinion and analysis column. Factual claims are drawn from the August 3, 2026 Middleborough Select Board meeting record, public statements made during the meeting, and publicly available project information. Payment projections are calculated from the agreement terms stated during the approving motion.

[DISCLOSURE: The author serves on the Middleborough Finance Committee.]