Under the direction of Flaherty & Hood lobbyist Amanda Duerr, two measures were passed into law that will benefit cities that host power plants. The firm represents the Coalition of Utility Cities (CUC), an organization of seven host communities in which the local plant is the largest property tax payer.
Because of CUC’s efforts, the Department of Revenue will now send notification when utilities apply for or are granted the Pollution Control Exemption (PCE) or Sliding Scale Exclusion (SSE), two property tax tools that significantly reduce the market value of a power plant. Cities currently receive no notice that a utility is seeking these exemptions and can be blindsided by large reductions, which can lead to tax shifts onto homes and businesses in the communities. Being provided with this information upfront will help cities with long-term financial planning.
To administer this new law, the Department of Revenue will be setting up a listserv for interested parties to sign up to receive notification when PCE and SSE applications for electric generating facilities are processed, allowing any interested local party to monitor.
CUC was also victorious against heavy opposition from public utilities to significantly limit the future eligibility for the Sliding Scale Exclusion. The original legislative intent of this exclusion was provide non-utility owned cogeneration facilities an incentive for efficient operations, offering an 8 percent market value exclusion for every point of efficiency over 40 percent. However, over time, utilities applied for and were granted this exclusion when upgrading their plants, despite questioning from state regulators as to their eligibility. Where used in the past, the SSE has excluded upward of 70 percent of a plant’s market value. In light of planned efficiency upgrades and efforts by federal regulators to further curb emissions, CUC wanted to proactively protect its tax base from the future use of the SSE. CUC made a strong case that this tax exclusion was never intended for utilities and that it could result in large property tax shifts if used in their communities.
Through intense lobbying, future eligibility of the SSE will be limited to plants under 75 mw being converted from coal to an alternative source of energy. Limiting the eligibility of the SSE to these very small (mostly cogeneration) facilities better reflects the original legislative intent and will prevent the exclusion from being used in CUC communities.