FitzPatrick (copy)

Local officials and Exelon Generation have tentatively reached a payment in lieu of taxes (PILOT) agreement related to the James A. FitzPatrick Nuclear Power Plant after more than 18 months of negotiations. Sources said the deal would pay a combined more than $70 million to Oswego County, the town of Scriba and Mexico Academy and Central Schools. 

OSWEGO — Local officials and Exelon Generation are closing in on a tax agreement for the James A. FitzPatrick Nuclear Power Plant following a legal challenge of the property’s value and more than 18 months of negotiations.

Oswego County officials Monday said a ‘tentative deal’ with Exelon for a payment in lieu of taxes (PILOT) agreement had been reached and the parties were finalizing the language of the arrangement. Sources with knowledge of the situation told The Palladium-Times Tuesday the main structures of the deal were agreed upon, and Exelon would pay the three taxing jurisdictions — Oswego County, Mexico Academy and Central Schools (MACS) and the town of Scriba — more than $70 million over the next five years.

An Exelon spokesperson reached Tuesday declined to answer specific questions about the agreement and negotiations, but said the company is grateful for the support of the community.

“Exelon Generation is committed to paying its fair share of property taxes that support the communities where we live and work,” FitzPatrick Spokesperson Tammy Holden said in a statement.

Negotiations between the trio of taxing jurisdictions and Exelon started nearly two years ago, with county officials saying in September 2017 that Exelon requested a meeting to start ironing out the details of a tax agreement. Talks dragged on for more than 18 months and Exelon at one point challenged the assessed value of the plant, but officials say the parties are now closing in on a deal. 

“We’ve been working with the tax jurisdictions and the company in mediation and we’re in the process of finalizing an agreement,” County Attorney Richard Mitchell told members of the county Government, Courts and Consumer Affairs Committee this week.

The more than 40-year-old James A. FitzPatrick plant appeared to be destined for closure in 2016, but Exelon purchased the facility from previous owner Entergy in 2017. Shortly thereafter the state adopted the Clean Energy Standard (CES), which provides up to $7 million in subsidies to nuclear power plants to keep facilities in New York economically viable.

The previous PILOT agreement for FitzPatrick, which expired in March 2018, required Exelon to pay $12 million annually, with MACS receiving 65.5 percent ($7.8 million), the county 30.5 percent ($3.66 million) and the town 4 percent ($480,000). Multiple sources confirmed the percentages in the tentative deal were the same as the previous agreement.

A five-year PILOT agreement struck between local officials and Entergy in April 2016 would have carried the parties through 2020, but the deal was non-transferrable and the final three years of the deal were terminated after the sale of FitzPatrick.

With the PILOT expiring in March 2018, Exelon was forced to pay property taxes on the full-assessed value of the FitzPatrick facility in 2019. The town of Scriba assessor set the value of the plant at $550 million, and Exelon challenged the valuation in court claiming the actual worth was $50 million.

If adopted, officials said the tentative agreement would see Exelon drop the challenge of the assessment, but pay the full tax bill of nearly $16 million for 2019. 

Under the framework of the deal, Exelon is set to pay the three taxing entities a combined $13.8 million each year from 2020 through 2024. The arrangement would see MACS receive roughly $9.4 million, the county $4.2 million and the town of Scriba $552,000.

As part of the agreement, officials with knowledge of the talks said the trio of taxing jurisdictions and Exelon took the $16 million payment into consideration. With the 2019 payment included, the resulting six-year deal averages about $14.1 million per year and a more than 15 percent increase from the previous PILOT.

Scriba Town Attorney Kevin Caraccioli declined to provide specific details but said the tentative agreement is “very good for the community and the company.”

“Most importantly, these payments are locked in for a five-year period, which allows the town, the county and the school district to budget their money more reliably,” Caraccioli said. “It creates stability and reliability for both the tax jurisdictions and the company.”

In order to finalize the agreement, both the county and town are required to hold public hearings and adopt local laws.

Scriba is planning to hold a public hearing June 19. The county has not yet scheduled a hearing, but officials said efforts would be made to hold the hearing before the end of June.

The MACS Board of Education, which is next scheduled to meet June 13, is required to adopt a resolution. MACS officials could not be reached Tuesday.

Sources said the parties are seeking to finalize the agreement before July 1.

Nine Mile Point Unit 1 and Unit 2, also owned by Exelon, have PILOT agreements that officials said expire at the end of 2019.

Exelon and multiple county officials did not respond to requests for comment Tuesday.

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