Lorain County Auditor, NRG negotiate settlement over Avon Lake power plant taxes


Officials have reached a settlement over property tax issues for the Avon Lake power plant. Photo courtesy Bryan Wroten


AVON LAKE — Lorain County Auditor Craig Snodgrass said he has negotiated a deal with NRG involving millions of dollars in tax revenue related to the Avon Lake power plant on Lake Road.

Snodgrass said the agreement, which company officials have agreed to in principle last week, will provide stability going forward for the school district and other entities receiving tax payments from the utility because tax values will be set for the next four years.

Also as part of the deal, NRG officials will not to seek a refund of over payments the utility has made the past few years, Snodgrass said. Instead, NRG will reduce its future tax payments by the amount it overpaid. Snodgrass said this would help Avon Lake Schools, in particular, which could have faced repaying NRG $1.6 million. Avon Lake, Avon Lake Library and other Lorain County entities would have owed an additional $600,000.

Since 2013, NRG has sought to reduce the taxes it pays on the 92-year-old plant on Lake Road as a way for the utility to save money. And at each instance, the county and school district has fought those reductions, and lost.

In the last four years, the Avon Lake plant’s property tax value has dropped from $54 million to $38 million; while the assessed value of its equipment has dropped from $63 million to $8 million. The state approved the latest reduction on Aug. 21, the third time since 2013.

The agreement came just two days before NRG was set appear before the Ohio Department of Taxation in a suit stemming from an earlier property tax reduction. NRG sought to lower its property value from $38 million to $8 million. The agreement would resolve this case before the state.

Snodgrass and Schools Superintendent Bob Scott declined to reveal more details about the deal until they met with the school board to review the settlement offer, which was to happen Tuesday night.

“This has been ongoing since 2013 and had us make difficult decisions not knowing what the future would bring,” Scott said. “We really appreciate the work that Craig Snodgrass and his people have done to make this happen.”

NRG spokesman David Gaier said the company was pleased to have reached a settlement that provides certainty and fairness for all parties.

“It’s increasingly difficult to keep conventional generating plants open in the face of market-crushing handouts to nuclear operators.” he said.

During the five years since NRG acquired the Avon Lake plant as part of a merger with GenOn Energy, it has filed multiple petitions seeking tax reductions for both property and PUPP taxes.

NRG had also filed multiple requests with the state Board of Tax Appeal over the assessed value of their equipment. Five years ago, it was assessed at $36 million. In 2013, the state reduced it to $16.3 million and, in 2014, to $14.9. In the most recent determination, the state reduced NRG’s PUPP value to $8 million.

Both Snodgrass and Scott voiced frustration that Ohio law did not provide a more clear cut way for them, or others, to protest PUPP reductions. “It’s just not in the law,” said Snodgrass who was investigating alternatives when the settlement agreement was reached.

The PUPP tax reductions alone have cost city schools more than $1.2 million in lost annual revenue. The latest reduction would have cost an estimated $1 million more. The City of Avon Lake has lost more than $200,000 due to PUPP reductions and Lorain County has lost more than $500,000 in tax revenue.

Scott said he expected the board to vote on whether to accept or reject the settlement. If the board accepts the settlement, lawyers for the schools, auditor and NRG will draw up documents to be signed. Because the other taxing entities were not a part of the lawsuit filed by the school district  and auditor, they do not need to sign the documents, but will receive the same benefits from the settlement.




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