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Two East Ohio School Districts Stand to Lose About $2 Million

STEUBENVILLE –Two East Ohio school districts stand to lose about $2 million in tax revenue, collectively, due to the declining property value of local power plants.

Edison Local School District Superintendent Bill Beattie told Jefferson County commissioners on Thursday the school district will receive about $1.6 million less in taxes paid by FirstEnergy due to a decrease in value for its W.H. Sammis Plant, located in Stratton.

Beattie said he wanted school district residents to know about the decrease in tax money. He said some of the loss will be made up by taxes from gas transmission lines installed in the county.

The auditor’s office reported the pipelines pay a tax to the county for five years and then the amount greatly decreases.

Beattie said the tax dollars from FirstEnergy represented a guaranteed number.

Lewis “Doby” Piergallini, chief deputy auditor in the real estate division, said FirstEnergy shut down units at the Sammis plant. The utility then told the state the plant’s valuation had decreased. He said the state tax department agreed.

Piergallini said the Buckeye Local School District will be losing $452,000 in annual tax revenue because of a devaluation of American Electric Power’s Cardinal Plant near Brilliant.

Piergallini said the loss in tax money from the utilities could be recouped in several ways. He said overall property values continue to increase in the county, and there is new construction of homes.

The county set a record several years ago with $500,000 in conveyance fees from property sales, Piergallini said, noting the county this year so far has received about $1.1 million.

Commissioner David Maple said relying on gas and oil money is harder to predict because of its volatility.

“Any time a school district takes a million-dollar hit, that is troublesome. Edison certainly needs the money,” said Commissioner Thomas Graham.

Piergallini said FirstEnergy is one of the top taxpayers in the county.

The oil and gas industry is increasing at a rapid pace in the county, according to officials.

Piergallini said there were 12 producing wells in the county in 2014, 33 in 2016 and 54 through the end of the second quarter this year, based on information from the Ohio Department of Natural Resources. The total natural gas production in the county in 2014 was 7.77 million cubic feet. That jumped to slightly more than 46 million cubic feet in 2016, according to ODNR.

Commissioners took no action on a request from FirstEnergy for support in petitioning the Federal Energy Regulatory Commission to allow the utility to increase its inventory of coal to three months to help maintain the stability of coal-fired plants. But the commissioners noted the cost would be passed on to customers. The Department of Energy did a study of the electric grid and its risk to coal supplies in the event of a natural disaster.

Commissioner Tom Gentile said he is reluctant to support the FERC petition without additional information from FirstEnergy. Graham noted FirstEnergy didn’t have a representative at the meeting to provide further information.

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