Published: April 27, 2007 03:29 am      

PILOT CONTROVERSY: AES, IDA hearings still on tap

There will be a factual hearing in the case of three taxing jurisdictions versus AES Somerset and the Niagara County Industrial Development Agency.

Judge Richard C. Kloch Sr. denied the Town of Somerset’s motion Thursday to cancel the May 7 hearing.

“The appellate division is adamant about matters being (heard through) a fact-finding hearing,” Kloch said.

Attorney Robert Roberson filled in for regular Somerset Town Attorney Edwin Shoemaker. The town is getting ready for the next court date.

“We’re just waiting for the hearing,” Roberson said.

Somerset Supervisor Richard Meyers said he was not surprised the town lost its motion.

“I think everybody expected that to happen, so I don’t know why we did the motion,” Meyers said.

Representatives from the town, county and Barker Central School District are supposed to appear for the factual hearing next month to discuss several causes of action found in each of their lawsuits against the power plant and IDA. Kloch threw out several causes in all three lawsuits March 22 but wanted to know more about the IDA’s procedure during the granting of a payment-in-lieu-of-taxes, or PILOT, agreement to AES.

AES had asked for the PILOT last fall for “tax certainty” before it applied for a clean-coal plant under former Gov. George Pataki’s Advanced Clean-Coal Initiative. AES lost the bid to NRG Huntley in the Town of Tonawanda.

The 12-year, $192 million PILOT was signed in January by IDA Chairman Henry Sloma and AES Somerset plant manager Kevin Pierce. Numbers calculated before the PILOT was signed estimate the three taxing jurisdictions will lose $43 million over the life of the agreement.

Shoemaker has said the town has had difficulty preparing for the hearing because they don’t have any witnesses to call. However, Roberson said the town and county have subpoenaed the IDA and AES for more documents.

AES attorney Mark McNamara said the subpoenas were sent to both individuals and AES’s corporate entities to ask for “irrelevant information.”

“That will be the point of the motion to question the subpoenas,” McNamara said. “They’re looking for everything they can with respect to anything to do with the process of negotiation, consideration and execution of the PILOT and anything having to do with the clean-coal initiative (request for proposal).”

AES and IDA attorneys will return May 10 on their motion to squelch most of the subpoenas. Although the factual hearing was originally scheduled for May 7, Kloch said the hearing would have to be rescheduled because of another ongoing case. Kloch did not set a new date Thursday morning.

In the meantime, the Commission of Investigation is in the county this week conducting an investigation of the PILOT, which Legislators Dennis Virtuoso and Renae Kimble had requested last month. IDA Chairman Henry Sloma said he was interviewed Wednesday.

The state agency is expected to make its findings available to the public once the investigation is complete.

Contact reporter Tasha Katesat 439-9222, ext. 6241. Reporter Jill Terreri contributed to this report.