FitzPatrick tax deal approved

OSWEGO — Local taxing jurisdictions and Exelon Generation have finalized a five-year tax agreement for the James A. FitzPatrick Nuclear Power Plant that provides nearly $70 million in properties taxes to Oswego County, the town of Scriba and Mexico school district.

Oswego County, town of Scriba and Mexico Academy and Central Schools (MACS) officials and Exelon recently came to terms on a payment in lieu of taxes (PILOT) agreement after more than 18 months of negotiations that included a legal challenge by the company. The county, town and school district approved the agreement at a series of separate meetings and largely silent public hearings this week.

Under the PILOT agreement, 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 $9.04 million, the county $4.21 million and the town of Scriba $552,000. 

In a statement Thursday following the MACS approval, which was the last of the three taxing jurisdictions, an Exelon spokesperson expressed gratitude for the community support and the officials who ultimately approved the deal.

“Exelon Generation is committed to paying its fair share of property taxes that support the communities where we live and work,” the company said in a statement. “We are grateful for the support of the community and appreciate the county of Oswego, town of Scriba and the Mexico school district’s approval of a long-term tax agreement.”

Oswego County Administrator Phil Church said the payments are similar to what the county would receive if the property were to be assessed on the tax rolls, and noted the payments are about $600,000 more than the annual payments under the previous PILOT agreement.

“And it stabilizes our ability to budget for the next few years rather than being in a rollercoaster of changing assessments and legal challenges,” Church said.

Oswego County Legislature Chairman James Weatherup, R-Central Square, who was part of the county’s negotiating team, said the talks between the entities were “honestly a little thorny” at first, but after the parties sat down and “aired out” their differences the deal started to take shape. 

“We think we have an agreement that’s mutually beneficial,” Weatherup said last week, noting the agreement is “slightly more” than the previous PILOT. “It gives them stability in their payments and it gives us stability in our revenues for the next few years.”

Weatherup called Oswego County and northern New York “a friend to nuclear power and renewable energy,” adding nuclear plants “don’t have that luxury everywhere.”

“We’re happy to do our part and it truly is a partnership between Exelon and the county, and with the school district and the town of Scriba,” the chairman said.

County Legislator Tom Drumm, D-Oswego, said the PILOT agreement helps the county’s long-term financial stability, and noted the deal was particularly encouraging for a plant that less than three years ago appeared destined for closure.

“Locking them in for the amount we did lock them in for I think is really strong for the county moving forward these next five years,” Drumm said. 

Drumm, who was part of the county’s negotiation team, said he was proud to be on the negotiating team and hopes to continue to do so in the future. He called it “the most consequential thing” he’s been part of in his time on the county Legislature, adding it “feels good to provide financial security.”

Scriba Town Attorney Kevin Caraccioli called the tax agreement “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.”

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). 

The five-year PILOT agreement struck between local officials and previous FitzPatrick owner, 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.

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.

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, which the town of Scriba assessor set at $550 million, claiming it was worth $50 million. 

As part of the agreement, Exelon agreed to drop the challenge of the assessment and pay the full tax bill of nearly $15.9 million for 2018. Officials said that payment was taken into consideration as part of the PILOT agreement.

There are several potential triggering events in the proposed deal that could terminate the agreement, including the federal Nuclear Regulatory Commission (NRC) shutting down the plant or cancelling its license, Exelon adding generating capacity, the state discontinuing or altering nuclear subsidies and Exelon permanently shutting down the facility.

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

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