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Questions remain at NRG PILOT adjustment hearing

OBSERVER Photo by Rebecca Cuthbert City of Dunkirk Councilman-at-Large Andy Woloszyn speaks at a Chautauqua County Industrial Development public hearing on Friday at the SUNY Fredonia Technology Incubator.

Local residents gathered at the SUNY Fredonia Technology Incubator Friday afternoon for a public hearing on the adjustment of the NRG payment in lieu of taxes (PILOT) agreement, hosted by the Chautauqua County Industrial Development Agency. However, as is the case with most public hearings, no answers were offered for the many questions posed.

And, as is also often the case, many residents and city officials left the public hearing feeling frustrated — though their reasons for feeling that way varied.

A document read aloud by Matthew Mazgaj, attorney with Phyllips Lytle LLP, and distributed to attendees, reminded everyone that in January of 2016, Dunkirk Power LLC (a subsidiary of NRG Energy, Inc.) notified the IDA that “each of Units 1,2,3, and 4 of the Project Facility were out of operation for more than six months and that (Dunkirk Power LLC) elected to make reduced (PILOT payments).”

This was all legal; the original 2008 PILOT document said it was allowed in Section 4(b)(i). Now, though, the power company wants to change its payment terms again, and has “submitted a supplement to its original application … to the (IDA) requesting that the (IDA) consider an amendment to the PILOT Agreement related to the Project.”

The document goes on to say that instead of continuing with regular reduced PILOT payments, NRG would make “certain interim payments to the (IDA)” while it is converting its coal plant to natural gas. After the gas-fired units are returned to service, NRG would pick up its PILOT schedule again. However, when it does, the company proposes that “for each interim payment that is actually made by (NRG), (it) will be entitled to a partial year-for-year credit to be applied to (NRG’s) PILOT Payment …”

In other words, NRG would get to take part of those “interim” totals off of what they owe later, when units of the power plant have fired back up.

There was nothing in the document that specified how much these “interim” payments would be, whether their annual total would be the same or less (or more?) than 15 percent of NRG’s past yearly PILOT, or on what type of schedule they would be made. A note at the bottom said that “Copies of the Supplemental Application are available for review by the public at the offices of the (CCIDA) at 201 West Third Street, Suite 115, Jamestown, New York 14701.” When the OBSERVER called the CCIDA offices Friday afternoon, though, the document was not yet available.

All of this left a few folks a bit raw — notably, two of the city’s councilmen.

First Ward Councilman Don Williams Jr. stood to speak at the public hearing, voicing his concern that no one from the city itself is present at these negotiation talks between the CCIDA and NRG.

“I’d just like to know why the city of Dunkirk doesn’t have a seat at the table when the county IDA comes up with these types of agreements that really drastically affect the bottom line for the city of Dunkirk,” he said. “Since we weren’t sitting at the table, if it’s not too late to ask, (is there) a possibility to have NRG, when they finish their conversion to repower with gas, to make some type of accommodation to the city to give free electric to the wastewater treatment plant and/or the water filtration plant?”

Councilman-at-Large Andy Woloszyn commented that he never thought the city had much of a voice when it came to these agreements.

“Ever since I became involved with the city of Dunkirk’s assessor’s office back in 1997-98 … from that era, we had some raucous public hearings during that initial PILOT agreement,” he said. “My issue is not with NRG. NRG is a very large taxpayer, a very large employer in the community. My issue is with the Chautauqua County IDA, and not even necessarily with Kevin Sanvidge, who is here in attendance today, because Kevin wasn’t even around during that time period. My issue with the IDA all along, since 2001 and 2002 when that initial PILOT was (agreed to), is … why the city of Dunkirk is never asked to have a seat at the table when we have … literally millions and millions of dollars at stake.”

Woloszyn said that for smaller matters, the city and the IDA are in constant communication; why not for this, too?

Resident Harriet Tower agreed, and expressed her concern about the Dunkirk waterfront, not only for its aesthetics but for its environmental health, too. Are the plant’s toxic byproducts being disposed of responsibly? What happens if the plant closes for good — is there a legal agreement in place that says NRG will dismantle the plant and do any necessary environmental remediation for the site? Or will its demolition and cleanup be shouldered by the taxpayers?

Thomas Mleczko, speaking as a resident, asked about the function of the IDA.

“I thought they were supposed to be here to generate or promote jobs,” he said. “Yet in this last PILOT agreement, that whole paragraph as far as staffing of NRG, was taken out. We still have no guarantee when it’s coming online, how long are these reduced payments going to go on, so why should we agree to something when we don’t know what the end result is going to be?”

Others felt a bit differently. They were less concerned with what Dunkirk isn’t getting now, and more concerned with what the city will get later — which, hopefully, will involve lots of new or restored jobs, full and timely PILOT funds, and a secure local grasp on the competitive utilities market.

William Thiel, business manager for Dunkirk City Schools, said he remembers the talks eight years ago, and everyone who needed to be there was there.

“I was here when the PILOT was negotiated in 2008; I was at the table for those discussions. Representatives for the city of Dunkirk were there alongside of me for every single meeting that was held, so they had as much input into the final decision as anybody did. I think there was an excellent opportunity at that point for us all to come up with a decision that worked for the company. The county was also at the table, the IDA; and the other two taxing jurisdictions, the city and the school district,” he said.

Thiel added that NRG has the legal ability to reduce their payments to the county, city and school districts to “virtually zero,” but what the amendment to the agreement will accomplish is the establishment of a revenue stream.

“I’m in favor of anything that we can do to bring us back to, in the school district’s case, collection of the full $4 million a year, and I support the IDA and its current efforts to keep the company active and alive, and I’m moving forward in that regard,” he stated.

A representative for the labor union that works with Dunkirk Power employees said that currently, there are only three staff members at the Dunkirk location. He commented that it was too early to say just how many employees would be added on (or added back) once the facility is converted to natural gas; however, another audience member pointed out that in the construction phase alone, many area residents will be able to find welcome work.

A former NRG employee said he still has friends who can’t find jobs. They have been unemployed or underemployed since the plant shuttered, and hope they’ll be rehired when it converts from coal to natural gas.

State “transition aid” was also brought up; Dunkirk was fortunate to secure a good chunk of it. But state and local leaders had to fight hard for it, and receiving it again in any helpful amount would be like sinking consecutive holes-in-one on a tricky golf course. Not impossible, but don’t bet on it.

According to state officials, this year the Dunkirk City School District will receive $2,714,152, the city of Dunkirk will receive $1,792,967 and Chautauqua County will receive $1,037,423 in transition aid — the full amounts the entities applied for. They would have received $4 million, $2.68 million and $1.5 million, respectively, as part of the full 2017 PILOT payment, state officials said, but the PILOT agreement dated April 25, 2008, says that a full payment would have been $8,513,198, not $8.18 million.

Despite the unanswered questions and disagreements in the room Friday, many of those who spoke stood on common ground. They want to see progress with the power plant’s conversion, they want to see NRG restore their full PILOT payments, they want jobs back in the community and they want acknowledgment that the success or failure of the repowering effort will affect all of them (and the rest of the city’s and county’s residents) in very real ways.

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