May 20, 2013

Yarmouth worries over power plant

Officials say the Wyman Station owner has been unresponsive; taxpayers can expect a hike in rates.

By Kelley Bouchard kbouchard@pressherald.com
Staff Writer

YARMOUTH - The pending sale of Maine's largest power plant is expected to contribute to rising property taxes in Yarmouth, but town officials are more concerned about the long-term impacts of the transaction now that talks have broken down with the corporate owners of Wyman Station.

click image to enlarge

Wyman Station sits mostly idle on Cousins Island, only used when needed as a backup power generator.

Gabe Souza/File photo

Town Manager Nat Tupper and a lawyer flew to Florida earlier this month to speak directly with representatives of NextEra Energy Resources. Formerly FPL Energy, the company bought the plant on Cousins Island in Casco Bay from Central Maine Power Co. in 1999, in the wake of deregulation.

Tupper hoped to resume talks about further reducing the plant's $2 million annual tax bill. He also sought assurances that, if the plant is sold, the town won't be left with a massive rusting hulk that's an environmental disaster and more of an eyesore than it already is. It didn't go well.

"It was unproductive," Tupper said Friday. "We are expecting to part ways with the company. We'd like to know they intend to do it without leaving the town in the lurch."

NextEra acknowledged in an earnings report released April 30 that Wyman Station and the much smaller Cape Station in South Portland, near the Casco Bay Bridge, are up for sale as a package deal. Both are oil-fired plants and NextEra's last holdings in Maine.

NextEra declined to comment Friday on Yarmouth officials' concerns.

"We've made the decision to sell our fossil assets in Maine," said Steve Stengel, a NextEra spokesman. "They have not been sold yet, nor have the facilities been shut down."

Built in the 1950s and expanded in the 1970s, Wyman Station is now considered one of the least efficient power generators in the nation. It rarely runs because it competes with more efficient natural gas plants, but it's contracted to stay on line until 2017 as a backup generator.

The various potential impacts of the pending sale on Yarmouth taxpayers is unclear.

On Thursday, the Town Council approved a $32.7 million municipal and school budget for the next fiscal year, which starts July 1.

The proposed budget is 2 percent higher than the current spending plan, but the tax rate is projected to increase 4.5 percent, from $21.20 to $22.16 per $1,000 of property value, Tupper said. The higher rate would add $288 to the annual tax bill for a $300,000 home.

No members of the public spoke on the budget proposal at Thursday's council meeting. Residents will have an opportunity to vote on the combined budget at a town meeting on June 18 and on the school budget in a referendum on June 25.

Like many municipal officials in Maine, Tupper and Yarmouth's town councilors have tried to anticipate the potential funding impacts of various state budget proposals swirling in the Legislature, including Gov. Paul LePage's plans to suspend municipal revenue sharing and increase municipal contributions to teachers' retirement plans.

Yarmouth officials have an additional challenge, however. NextEra has refused to negotiate a new, three-year agreement on the taxable value of Wyman Station, which was assessed at $95 million in 2012, down from about $340 million in 1998, Tupper said. The town has devalued the plant significantly over the years, to the point that Wyman Station's portion of Yarmouth's tax base has dropped from 40 percent to 7.5 percent.

The town's last tax agreement with NextEra expired in April, and Yarmouth officials typically would have negotiated a new value by last fall. While NextEra is current on its tax payments, company officials have refused to talk about setting a lower value for the plant.

"We're dealing with two major unknowns: what's going on in Augusta and what's going on in Florida," Tupper said.

But Tupper and Town Council Chairman Steve Woods said the tax issue is no longer the town's biggest worry. They fear that NextEra's refusal to discuss its plans for Wyman Station signals a lack of commitment to ensuring that the 122-acre property and its 421-foot smokestack don't become an economic and environmental crisis for the town.

"My concern is they're trying to dump the property and their responsibility to the town of Yarmouth," said Woods. "Yarmouth welcomed and accepted the power plant for more than 50 years. We've been a good town when others have not. Now, when they're done with us, they won't even return our phone calls."

Woods called NextEra's behavior unethical and immoral, noting that the company promises on its website to "establish a cooperative relationship" with communities and maintain that relationship long after projects are completed. Woods said he recently bought a block of NextEra stock so he can submit comments directly to company officials.

Tupper said the town will survive whatever impact the sale of Wyman Station has on Yarmouth's tax base. The town is financially healthy, he said, noting that it sustains positive bond ratings and recently secured a 0.3 percent interest rate on a short-term, $4.3 million loan for a town project.

"It's reasonable that they want to get out of Dodge," Tupper said of NextEra. "Just don't shoot up the town on the way out."

Kelley Bouchard can be contacted at 791-6328 or at:

kbouchard@mainetoday.com

 

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