You are here

NRG: 85 percent cut

NRG Energy Inc. released a letter of intent Monday to slash its 2016 payment in lieu of taxes agreement by 85 percent to the city of Dunkirk, the Dunkirk School District and Chautauqua County - which will leave a $7,094,331.20 hole for 2017 alone with further reductions planned for years to come.

"This was not something that came as a total surprise, we expected this, they had said right along that they were going to exercise their right as per the terms of the PILOT agreement with the (Industrial Development Agency). So they are going to exercise that right for 2017; the PILOT payment for 2016 has been paid in full. We are still optimistic that NRG will repower, but we are working with the governor's office, Senator (Catharine) Young, Assemblyman (Andy) Goodell and County Executive (Vince) Horrigan to make sure we have a plan in place," Dunkirk City Mayor Willie Rosas said.

Political and local officials received notice on Jan. 28 and have pledged action to address any reduction in PILOT payments, with Sen. Catharine Young (R,C,I-57th District) outlining a plan of action.

"There are short-term and long-term solutions. Obviously, we are pushing for NRG to reconsider their 2016 PILOT plan that is a disaster for our community. If they refuse, then in the short term I will fight to restore the PILOT amount to the city, school and county in this year's state budget that is due to be passed by March 31. Long term, it is crucial that NRG not delay construction any longer and get the work underway to repower the coal plant into a clean, efficient natural gas plant that will stabilize the tax base, provide jobs, and ensure that Western New York has a baseload power generator to grow manufacturing and other economic opportunities," Young stated in a press release sent to the OBSERVER.

County Executive Vince Horrigan has also been working alongside Young to repower NRG, noting how damaging its closing is for Dunkirk and the county as a whole.

"To say the least, this process has been extremely frustrating to every citizen of Chautauqua County. I too expressed my disappointment directly to NRG for not moving forward with the repowering of Dunkirk especially in light of the extensive support from the citizens of Chautauqua County," he said.

Dunkirk Board of Education President Kenneth Kozlowski said that he and other school officials saw this catastrophe coming, and did what they could to be prepared.

"We thought that something like this may happen; that's why we had tried to plan for the last few years. It's unfortunate, but we're going to get through it and we have confidence in Sen. Young and Assemblyman Goodell that they're going to help us get transition aid to be able to get through this."

Kozlowski noted that transition aid would be crucial in balancing the budget and added that monetary assistance would ramp down over the course of several years.

"With the transition aid, we should be able to make it work and see what happens next year," he remarked. "Hopefully next year, NRG has got something worked out where they're back on track."

Dunkirk City Schools Superintendent Gary Cerne is keeping his fingers crossed.

"The news of NRG cutting the PILOT payments by 85 percent is financially devastating to the school district," he said. "However, we are optimistic that Senator Young and Assemblyman Goodell will do their best to fill that gap with transition aid and we are optimistic that things will work out fine."

Assemblyman Andy Goodell said Plan A is repowering.

"Our top priority is to encourage NRG to move forward with this project, and to encourage Governor Cuomo and the PSC to seek possible solutions to the federal lawsuit," he stated, adding transition aid and other economic development is Plan B.

Rosas said he also hopes repowering goes through, but he is actively pursuing economic development that would take the place of NRG after the five years of state assistance was up.

"I want the citizens of the city of Dunkirk to know that I have been working with all the elected state officials as well as the governor's office to ensure if the worst case scenario does happen that the city will be receiving assistance from the state. ... There will be a time when we are going to have to deal with state assistance (ending after five years), which means hopefully there will be some other economic development opportunities to compensate for that loss. Otherwise, we are going to have at that point change the way we operate here in the city," he said.

Young said that assistance money had already been put aside, but she hoped Dunkirk and its neighbors wouldn't need it.

"Last year, the Senate added a $19 million line item to provide assistance to communities across the state affected by the loss of power plants," she said. "At the time, I could not imagine that we would need to tap into that fund for the NRG project, because repowering was set to move ahead. If necessary, I will push to access this fund to provide financial relief to the city, school, county and our taxpayers. It is important to remember that NRG has decided to delay work due to the Entergy lawsuit, but the contract to transform NRG into a natural gas plant still is in place and can go ahead.".

Despite repeated setbacks, Young isn't giving up, and urges her fellow politicians not to lose momentum.

"I will continue to advocate with NRG, the Public Service Commission and the governor to push to get work underway. The community still stands strong for repowering because it is so crucial to our tax base and economy. We need to get people back to work, the plant to come out of being mothballed and our repowering project completed," she said.

NRG spokesman David Gaier declined to comment Monday but a press release with more information is expected soon.