Excess capacity & excess greenhouse gases are issues
From an Essay by Kelly Allen, WV Center on Budget & Policy, Morgantown Dominion Post, April 26, 2020
OVER THE PAST SEVERAL MONTHS, THE MONONGALIA COUNTY COMMISSION has been negotiating a “payment in lieu of taxes” (PILOT) deal with Longview Power LLC to build a gas-fired power plant. PILOT agreements are property tax abatements where corporations agree to make annual payments to local governments instead of paying the property taxes they would normally owe and that other businesses in the jurisdiction pay. These fixed payments are generally a small fraction of what would have normally been paid in property taxes, and research shows that business tax incentives rarely pay for themselves by providing net positive tax revenues for community use.
While neither the state nor Monongalia County has disclosed the potential forgone revenue from the agreement, rough estimates calculated by looking at what Longview would be paying if it paid the same tax rates as other businesses in Mon County show that the estimated tax abatement for Longview’s proposed gas-fired power plant is $275 million over the 30-year life of the PILOT deal.
This would represent Monongalia County’s second PILOT agreement with Longview. The county is currently several years into another 30-year tax abatement for Longview’s coal-fired power plant, which is estimated to reduce their tax liability around $562 million. In total, the value of the two PILOT agreements translate into over $670 million in potential lost revenue for Monongalia County, its residents and our public school system, which receives about two-thirds of the county’s property taxes.
In light of the COVID-19 public health and economic crisis that is now facing our county, state and country, governments are facing serious revenue shortfalls. While the county commission is estimating a loss of $1.8 million in tax revenue through June 30, the impacts of the crisis on the property tax revenues, upon which our county’s public services rely, will be felt for months and years to come.
Even in better economic conditions, poorly designed business incentives threaten local revenues and public services, turning a tool aimed to promote economic growth into service cuts and tax increases on residents. In the midst of a potentially lengthy recession, business tax incentives can become economic disasters for local governments, public schools and tax-paying residents.
While other businesses and taxpayers have their property taxes re-assessed each year, Longview is being given a fixed deal for the next 30 years that fails to take into account changing economic conditions or environmental regulations. The less Longview pays, the more other businesses and residents must pay to fund schools and public services.
While proponents argue tax abatements are necessary to incentivize a business to locate in a community and any payments received via the PILOT agreement are a net gain, that fails to take into account the public costs to the community. Roads, fire and police protection, public services and water and air quality are all new costs that will be incurred and must be taken into account in any cost-benefit analysis.
This moment requires that local governments protect critical revenues and ensure that the cost of the economic crisis is not unduly borne by Monongalia County residents. In light of current economic conditions, the county commission should reconsider moving forward with this tax incentive. At the very least, it should produce a costbenefit analysis in light of changes in the economic and energy markets.
Businesses must pay their fair share, and a PILOT agreement that confers special tax treatment on a single corporation without proving net economic benefits for the community is not the right way forward.
>>> KELLY ALLEN is the director of Policy Engagement and the interim deputy director of the West Virginia Center on Budget and Policy.
#########################
See also: OPG Subsidiary Atura Power Finalizes Acquisition of Natural Gas Assets
From the CNW Group, Yahoo! Finance, April 29, 2020
TORONTO — April 29, 2020 /CNW/ – Ontario Power Generation Inc. (OPG), under a new subsidiary that will be doing business as Atura Power, has finalized the acquisition of a portfolio of combined-cycle natural gas-fired plants in Ontario. The natural gas assets had previously been owned by TC Energy.
“Natural gas is the enabler of renewable energy and provides the flexibility required to ensure a reliable electricity system,” said Ken Hartwick, OPG President and CEO. “OPG has decades of energy generating expertise in Ontario and this diversification of our portfolio is a natural fit.”
The total purchase price for the acquisition was approximately $2.8 billion , subject to customary closing adjustments. Any profits generated from these assets will stay in Ontario for the benefit of Ontarians. RBC Capital Markets acted as a financial advisor to OPG on this transaction.
Key Facts About The Acquired Combined-Cycle Natural Gas-Fired Plants:
>> 100% ownership of Napanee Generating Station (900 MW)
>> 100% ownership of Halton Hills Generating Station (683 MW)
>> Remaining 50% ownership of Toronto’s Portlands Energy Centre (50% of 550 MW)
>> In addition to these assets, OPG had previously closed a transaction in August 2019 to acquire the remaining 50% interest in the 560 MW combined-cycle natural gas-fired Brighton Beach Generating Station.
These four facilities will operate together under the Atura Power brand. Atura Power has been established to operate and manage this portfolio of natural gas assets, which are strategically important to the current and future electricity system.
OPG is the largest electricity generator in the province, providing about half the power Ontarians rely on every day. It is also one of the most diverse generators in North America with expertise in nuclear, hydro, biomass, solar and gas.
NOTE: OPG is now the owner of the 50 MW Lake Lynn Hydro Project forming Cheat Lake as well as a number of other small hydro-projects in the mid-Atlantic states. This includes a significant hydro-pumped storage project in Bath County, Virginia.
Point Your RSS Reader to FrackCheckWV.net/feed/
