Published: September 22, 2006 01:05 am      

POWER PLANS: New AES plant, tax breaks to be discussed

WHEATFIELD — The public will soon be able to share their thoughts on a possible second power plant in Somerset.

The Niagara County Industrial Development Agency Board of Directors accepted proposals and agreed to hold public hearings on incentives Thursday for a new $1 billion AES “clean coal” plant and a tax agreement on its existing plant that could end the company’s litigation against Somerset.

The proposed generating station would be located on the company’s 1,800 acres. Between 100 and 120 new workers would be hired to help with the 675-megawatt capacity plant.

AES Somerset LLC President Kevin R. Pierce said the new employees would be sought from the community and would be trained to run the plant.

“This is a huge investment,” Pierce said. “It means a lot of job opportunities in Niagara County.”

In addition to generating power, the plant would have an area for the research and development of carbon capture and sequestration technology. AES-NY LLC business manager Christopher Wentlent said the Maryland and Oklahoma AES plants sell their carbon dioxide to the beverage industry.

Wentlent said the plant has a potential tax revenue of $450 million over 25 years, which he believes could bring other businesses and opportunities to the area.

Taxes are a sore subject when it comes to Somerset and AES. The power company is in litigation with the municipality over the plant’s last three assessments. AES’s most recent annual property tax payment was $17.4 million for the current plant, which is assessed at more than $668 million.

Pierce said the town doesn’t share the burden with AES.

“We’re a large business in a small town,” Pierce said. “We take the brunt of any kind of tax change.”

The IDA board accepted the company’s application for a payment-in-lieu-of-taxes agreement (PILOT), which would lessen the financial blow on AES. It is not known how much the company would save, however.

Board Chairman Henry Sloma said he is personally in favor of the PILOT.

“If we can provide stability by the foundation of jobs and opportunities, then I’m in favor of trying to stabilize,” Sloma said. “This is an enormous project for that end of the county that went through economic distress.”

The chairman said he wants to “marry together” the AES project with an upcoming HSBC data center that the county is in the running to receive.

The IDA is supposed to receive 1.25 percent of the amount of each deal, although Sloma noted AES’s forms had that portion of the application struck out. The groups will have to discuss the fee, which should be substantial because of the project cost.

Striking a deal with AES on their tax bill may prove helpful in the IDA’s quest for another power plant. Wentlent said the company has three to six “legitimate bidders” for the clean coal plant.

“At least one of the bidders is in Erie County,” Wentlent said.

The other candidates have PILOTs for their existing sites.

Sloma said he thinks the public will be pleased with at least one of the proposals.

“The community would be very supportive of the construction of an additional plant,” Sloma said. “The grievances would be made from stuff in the PILOT.”

Sloma said the board is planning to meet with Somerset officials to discuss the proposals. The dates for the public hearings are expected to be set soon.

Contact Tasha Kates at 439-9222, Ext. 6241.