owners of coal-fired somerset power plant seek more tax breaks … · 2018-06-15 · owners of...

6/15/18, 3)58 PMOwners of coal-fired Somerset power plant seek more tax breaks – The Buffalo News

of 11http://buffalonews.com/2018/06/13/owners-of-coal-fired-somerset-power-plant-seek-more-tax-breaks/

The Somerset Operating Co. power plant. (News file photo)

Owners of coal-fired Somerset

power plant seek more tax

breaks

By Thomas J. Prohaska (http://buffalonews.com/author/thomas_prohaska/) | PublishedSections Search (http://buffalonews.com/) !

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The Somerset Operating Co. power plantwants a $1 million cut in how much it pays tolocal governments for its coal-fired powerplant in the Town of Somerset on the shores ofLake Ontario.

A new payment-in-lieu-of-taxes arrangement,presented Wednesday to the Niagara CountyIndustrial Development Agency, would reducethe plant's total bill to $3 million a year in 2019and 2020. The company's current PILOT is$4.12 million.

The power plant's first PILOT, in 2006, was$17.3 million.

If the new PILOT is approved, the tax on the675-megawatt plant would be 83 percent lessthan the 2006 amount. The NCIDA has steadilyreduced the figure as the plant has beenaffected by declining electrical prices and theharsh regulatory climate for coal-fired plants.

"As we look at the broader picture of Somerset,will this plant even be here two years fromnow?" asked Joan G. Aul, an NCIDA boardmember and M&T Bank vice president.

June 13, 2018 | Updated June 13, 2018

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The proposed PILOT arrangement was workedout in talks among the company, NiagaraCounty, Town of Somerset and the BarkerCentral School District.

No one from the company was at the meeting,and a call to corporate headquarters seekingcomment was not returned.

Somerset Supervisor Daniel M. Engert said sofar as he knows, the plant has generated powerfor only 12 days this year, and that was inJanuary.

The plant employs 78 people. It was purchasedin 2016 by Somerset Operating Co., a whollyowned subsidiary of Riesling Power LLC.Riesling, in turn, is owned by Beowulf Energyof Easton, Md.

The PILOT payments would continue to be setup so that Barker schools receive 59.25percent of the plant's payments, the countyreceives 31.5 percent and the town pockets9.25 percent.

"If they're willing to pay taxes for the next twoyears, they must have something planned forthe future," IDA Chairman Stephen F. Bradysaid. "The governor has made it pretty clear hewants coal out of the state's (power) mixsooner rather than later."



Engert said in an interview that the companytold him it has applied to the state forpermission to erect a 19-megawatt solar powerproject on some of the extensive unused landon the 1,800-acre site.

William L. Ross, former County Legislaturechairman and an NCIDA member, said theplant itself was built to be convertible tonatural gas.

"That would be the only way to save it," saidDaryl Bodewes, another NCIDA member.

"It's right up to date. You can't compare it toHuntley (a coal-fired plant in the Town ofTonawanda) or any of these other antiquatedplants," Ross said.

However, Engert said there is no natural gaspipeline near the Somerset plant.

"There was no plan submitted on how theyplan to continue on," Barker SchoolSuperintendent Roger J. Klatt, who was in onthe talks for the PILOT renewal, said in atelephone interview.

Klatt said Barker school taxes will show "agradual increase" – less than 2 percent thisyear, as the district continues to adjust to thereduced power plant payments.



"We have reserves that were intended for thispurpose, to mitigate any large spikes in the taxrate," Klatt said.

He said that reserve fund contains about $5million; the district's budget is about $17million.

The Barker Board of Education, the SomersetTown Board and the Niagara CountyLegislature will be asked to approve the newPILOT before the NCIDA board votes on it.Brady said he expects the NCIDA won't actuntil its Aug. 8 meeting.

If approved, the Somerset power plant wouldno longer be the largest property taxpayer inNiagara County, as it has been for decades.The reduction from the current $4.12 million ayear to $3 million would put the plant behindNational Grid in the tax rankings, county RealProperty Tax Director John Shoemaker said.

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owners of coal-fired somerset power plant seek more tax breaks … · 2018-06-15 · owners of...

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