IDA Approves Dunkirk NRG PILOT Changes

During a Tuesday meeting in Jamestown, the Chautauqua County Industrial Development Agency Board of Director’s approved the revised agreement, which details an annual payment of $420,000 to the Dunkirk City School District, city of Dunkirk and Chautauqua County. Payments would begin during the school district’s 2017-18 fiscal year and the city and county’s 2018 fiscal year.
P-J photo by Jimmy McCarthy

During a Tuesday meeting in Jamestown, the Chautauqua County Industrial Development Agency Board of Director’s approved the revised agreement, which details an annual payment of $420,000 to the Dunkirk City School District, city of Dunkirk and Chautauqua County. Payments would begin during the school district’s 2017-18 fiscal year and the city and county’s 2018 fiscal year. P-J photo by Jimmy McCarthy

Repowering NRG is back online, and a renegotiated PILOT agreement will bring some money to entities as a transition is made from coal to natural gas.

During a Tuesday meeting in Jamestown, the Chautauqua County Industrial Development Agency board approved the revised agreement, which details an annual payment of $420,000 dispersed between the Dunkirk City School District, city of Dunkirk and Chautauqua County. Payments would commence during the school district’s 2017-18 fiscal year and the city’s and county’s 2018 fiscal year.

The annual $420,000 payment would go until the conversion project’s completion or the school district’s 2022-23 fiscal year and the city’s and county’s 2023 fiscal year. Payments will ramp up as power generation units kick back in.

Rich Dixon, chief financial officer for the IDA, told board members the agreement will give taxing jurisdictions more funds than they would have received with no units running for the next two to three years. Dixon said NRG will eventually follow the original PILOT schedule, which goes up to over $10 million in the last year, despite a power capacity reduction from 530 megawatts to 450 megawatts.

“This is a win-win,” Dixon said. “They’d like to get all three (units) going at once. Say they get two of them going, for that year, it would be based on two (units) and not three. That’s how the original PILOT was written.”

In April 2008, the IDA entered into a 20-year agreement with NRG. This year, NRG reduced its PILOT payment to the city, school district and county –going from $8 million to $1.4 million to the three entities.

The state stepped in to provide $2.7 million to the school district, $1.7 million to the city and just over $1 million for the year to cover a gap.

Dixon also addressed board members regarding concerns from residents in Dunkirk over proceedings and jobs. Dixon said they’ve been in contact with officials from the city and school district during negotiations. As for employment, Dixon acknowledged the days of seeing 150 employees at the facility are gone.

“They don’t have to move that coal which was labor intensive,” he said.

George Borrello, board member and county legislator, said it was a year ago when repowering wasn’t even on the table. Borrello applauded officials’ work in getting NRG to agree to full payments even though they won’t be producing electricity right away.

“We were at a situation with a lawsuit from Entergy. Even the needs assessment by the state wasn’t looking good for this repowering to move forward,” he said. “We’re head and shoulders from where we were a year ago.”

Work still remains in the state budget process to secure mitigation funds for taxing jurisdictions for next year. Borrello and Dixon said the governor, state Sen. Cathy Young and Assemblyman Andy Goodell are working to ensure aid is included in this year’s budget.

“I think it’s important that NRG and our state officials and the public at large knows that this is moving forward,” Borrello said. “The idea of trying to keep the city and the school district as close to whole as possible while this transition occurs, I think that’s where support from the state comes in.”

In other matters, the board approved a preliminary resolution to provide a PILOT, sales tax, mortgage recording tax and property tax abatements with Great Lakes Cold Storage. Kristine Morabito, project manager, told board members the company is looking to build a storage facility in Dunkirk or Northeast, Pa., for Fieldbrook Foods to store their products.

The storage company is proposing to building a 110,000 square-foot freezer warehouse within a mile of Fieldbrook Foods. Twenty-seven jobs would be created if the company chooses Dunkirk.

“We’re competing with Pennsylvania,” Morabito said. “It important to site this (company) in Chautauqua County.”

The board is expected to consider the incentives for approval at next month’s meeting. Morabito said the company is looking to begin constructing a facility around May in hopes to have it ready sometime next year.

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