MOUNDSVILLE - The Marshall County Board of Education may forgo about $181 million worth of potential property tax revenue to attract a natural gas power plant, but Superintendent Michael Hince said this fact tells only a small portion of the economic impact story.
As Buffalo, N.Y.-based private developer Moundsville Power LLC hopes to raise $615 million to build a 549-megawatt plant on a 37.5-acre piece of property along the Ohio River, both the Marshall County Board of Education and the Marshall County Commission recently adopted Payment in Lieu of Tax agreements so the firm can avoid regular property taxes.
"We cannot simply look at dollar amounts. Without the board of education's agreement, there may likely not be this opportunity to have this plant," Hince said.
Calculations by county Assessor Christopher Kessler show the school system would normally collect about $185.4 million worth of property tax from the power plant over 30 years. This is based on a $615 million appraised value, which would be taxed at the assessed value of $369 million. Kessler said the $369 million value would result in $6.18 million worth of property taxes for the district per year. Multiplied by 30 years, the $6.18 million amounts to $185.4 million.
The board of education voted to forgo these taxes in favor of the PILOT plan, which will only result in a $4.2 million payment from the firm to the school over 30 years.
Hince, however, said the board is now receiving virtually nothing from the land, which is classified as a Superfund site by the U.S. Environmental Protection Agency.
"The property in question now is taxed at significantly less than what the pilot agreement offers the board in PILOT. The investment ... is in Marshall County as a whole. When you consider the possibility of construction jobs and employment within the county, the investment is significant," he said. "That is good for the community and that in turn is good for the school system."
If Moundsville Power is able to proceed with building the plant, the firm would pay the county commission as much as $39.29 million to lease the property over 30 years. However, the firm will receive an annual discount of $10,000 for every one of the 30 full-time jobs it maintains at the facility, reducing the likely total payment to the county over 30 years by $9 million.
"It is also important to remember that these resolutions by the commissioners and the board of education are simply permitting the continued exploration of the possibility of a gas-fueled electric plant. It is not a completed deal. This allows the Regional Economic Development Partnership to move forward to explore the viability of having this plant, so the commissioners can make an informed decision," Hince said.
Throughout Marshall County, several companies are spending billions of dollars to refine Marcellus and Utica shale natural gas, as the companies collectively invested $900 million in the county during the 2014 tax year alone - and several billions of dollars worth in total.
In 2011, the state Legislature passed the Marcellus Gas Manufacturing and Development Act - S.B. 465 - later signed into law by Gov. Earl Ray Tomblin. According to the bill, facilities eligible for the tax credit include "any factory, mill, chemical plant, refinery, warehouse, building or complex of buildings." According to Kessler, this allows these companies to pay only 5 percent of the annual property tax they normally would.
Moundsville Power developers hope to begin construction on the new power plant by early next year.