Power Plant Tax Deal Put Off After Lengthy Debate
October 28, 2016
BURRILLVILLE, R.I. — The town presented its case and residents gave their opinions, but in the end no decision was reached on a tax agreement with the developer of the proposed Clear River Energy Center.
Opponents of the fossil fuel power plant called for a delay on a tax agreement, or treaty, until the project is approved or rejected by the state Energy Facility Siting Board (EFSB). The $700 million natural gas/diesel power plant is currently on hold for 90 days as the developer, Chicago-based Invenergy Thermal Development LLC, finds a source of water for cooling the facility.
Town solicitor Michael McElroy outlined the terms of the treaty at a nearly five-hour Town Council meeting on Oct. 24. If approved by the council, Burrillville would receive $2.8 million for 20 years from the owner of the power plant.
The tax treaty offers compensation for 117 residents and property owners living near the proposed power plant. They can take a one-time $5,000 opt-out fee; negotiate terms with Invenergy directly; or sell their home or have Invenergy pay all or part of the asking price.
Those wanting to sell must agree to an appraisal that would exclude any deductions for drawbacks of having the power plant as a neighbor. If the home doesn’t draw an offer within 165 days, Invenergy must buy the property at the appraised value or, if the offer is below the appraised price, must pay the difference.
McElroy, who negotiated the deal with Invenergy, dispelled the notion that rejecting the tax treaty would cause Invenergy to lose its financial backing and abandon the proposed project. Two power plants in New Hampshire were built without a tax deal, he said. A power plant in Oxford, Mass., is also being built without a tax treaty.
“Oxford got financing,” McElroy said. “They are on site and they are building like crazy.”
Nonetheless, McElroy said a tax deal helps the town and the developer.
“Do they (Invenergy) want a tax agreement? Yes. Is it necessary in order for them to do this? Absolutely not. They are going to get a ton of money,” he said.
The offer also contains a plan and source of money to dismantle or repurpose the power plant after or during its estimated 40-year life. McElroy explained that the treaty contains a provision that requires the decommissioning plan to be reassessed annually. A violation of the agreement would allow the EFSB to revoke Invenergy’s operating permit. Without its permit, Invenergy can’t make electricity or money.
McElroy stressed that Invenergy’s “golden cow” is its contract with the regional power-grid operator ISO New England. The contract provides the main source of revenue for making the power plant profitable. A rule created this year, guarantees that electricity contracts last seven years.
The guarantee was “intentionally done by ISO New England to make the financing of a power plant easier,” McElroy said.
Paul Roselli of the Burrillville Land Trust explained that the proposed tax treaty ignores ecological damage to open space. He presented a map showing the power plant in the middle of a 100-year-old stretch of forest that runs from Maine to the Carolinas.
“Without a doubt, the environment has not only taken a backseat, but it might as well be on a different planet in terms of how the environment has been worked on, or approached, or litigated, or even dealt with when it comes to the EFSB hearings,” Roselli said.
He calculated that the tax treaty brings in a mere $1.56 per day per resident. The tax deal, Roselli said, lacks any money to address pollution from the power plant and disruption to wildlife from a new 6-mile transmission line.
“What value can we put on the local and regional environment to make it part of the tax agreement?” he asked.
The Town Council will address the tax treaty at its next meeting on Nov. 3 at the High School, starting at 7 p.m.
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