BURRILLVILLE – Town officials are preparing for negotiations of a new tax agreement with a Burrillville-based power plant, and voted this week to create an account for potential litigation and additional services, also hiring an engineering firm to assist special counsel with the task.
The council voted unanimously to authorize the legal team from McElroy & Donaldson to engage engineers and other professionals from Sansoucy Associates to help negotiate a deal with Ocean State Power. The company, owned by LS Power, operates a 560-megawatt power plant off of Sherman Farm Road.
According to a letter from Attorney Michael McElroy dated March 26, Sansoucy Senior Appraiser Glenn Walker and others with the engineering firm, which has offices in New Hampshire, will review the New England electric market and obtain tax agreements from other power plants in the region for comparison.
“A summary of market data will be provided in a Power Point presentation and include sufficient detail to allow the reader to understand a suggested range of values for the facility,” the letter from McElroy to Town Manager Michael Wood explained.
The Sansoucy team is also expected to work with the town to negotiate the agreement, with pay for services to range from $125 an hour for clerical work, to $300 per hour for principal engineering and senior appraisal services, and testimony and disposition attendance. Rates will be held firm through April 30, 2022, according to the communication.
Town Manager Michael Wood also requested the establishment of a dedicated account to fund the town’s interests in the deal with Ocean State, dubbed the Clear River Energy fund.
“Mr. Dmitri and I discussed the best way to handle the upcoming negotiations,” Wood explained of his talks with the town solicitor on the issue. “We have the flexibility to use this fund for that purpose, for appraisal purposes.”
It’s preparation for what could be a lengthy negotiation with high-stakes for the town’s tax base. Burrillville’s last tax agreement with the plant, a gas-fired facility that went live in 1990, was subject to several lawsuits, with the power company challenging town assessments. An agreement resolving litigation over how much the plant would pay the host town was ultimately signed in 2015, and dictated that the property would be assessed at $160,000,000 for six years.
That deal has since added around $2.5 million a year to town coffers, money used to pay for Burrillville’s capital expenses, funding large expenses such as facility improvements and road repair.
The town could also face a challenge in gaining support from plant opponents. The facility is reportedly one of the largest gas-fired plants in the northeastern U.S., burning up to 100 million cubic feet a day of natural gas. In December, activist group Burrillville BASE sent a letter to town officials asking for a phase-out of plant operations, with the goal of closing the facility by 2023.