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State grants if TMI shuts down? Senate bill aimed at municipalities that lose taxes if power plant closes

By Dan Miller

danmiller@pressandjournal.com

717-944-4628
Posted 4/17/19

Legislation providing for state grants to help communities impacted by a power plant closing is to be introduced by state Sen. John DiSanto.

Republican DiSanto’s 15th District includes much …

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State grants if TMI shuts down? Senate bill aimed at municipalities that lose taxes if power plant closes

staff photo by jason maddux
Posted

Legislation providing for state grants to help communities impacted by a power plant closing is to be introduced by state Sen. John DiSanto.

Republican DiSanto’s 15th District includes much of Lower Dauphin School District — which gets $700,000 a year in property tax revenue from Three Mile Island.

However, DiSanto opposes legislation now being considered in the state House and Senate intended to preserve TMI and the four other nuclear power plants in Pennsylvania, by making them eligible for credits that electric utilities would have to purchase.

Exelon Corp. has said it will prematurely shut down TMI in September, unless the state acts to support the nuclear industry.

“I am deeply concerned about the local impact that will be felt here in Dauphin County,” DiSanto said in a release issued April 11. “While I oppose burdening Pennsylvanians with costly subsidies for the benefit of big, highly profitable energy corporations, I believe we should support our local schools and municipalities through this challenging transition.”

Under DiSanto’s proposal, the Department of Community and Economic Development would make state grants available to local governments that experience a reduction  of at least 20 percent in property tax collections and payments in lieu of taxes received by a power plant.

Eligible local governments could apply for temporary relief for up to four years. Initial awards may be up to 80 percent of the demonstrated tax loss in the first year, up to 60 percent in year two, 40 percent in year three, and 20 percent in year four.

The General Assembly would have to appropriate money to fund the grants, DiSanto said in the release.

The “temporary relief” the grants provide would give municipalities and school districts affected by a power plant closing more time to replace tax shortfalls and to transition, while lessening the immediate impact upon schools and essential public services.

Dauphin County, Londonderry Township and Lower Dauphin School District combined receive about $1.5 million each year in real estate taxes and payments in lieu of taxes from Exelon because of TMI, DiSanto noted.

Besides direct tax revenue, Lower Dauphin School District officials have also noted the potential loss from Three Mile Island’s closure of more than $150,000 that the plant and its employees have donated over the past 10 years to support educational programs that benefit district students, such as the Communities That Care bookmobile.

The legislative proposals that DiSanto opposes would both add nuclear to the current list of 16 types of renewable energy production, such as wind and solar, now eligible for the purchase of credits under Pennsylvania’s Alternative Energy Portfolio Standards.

This would place nuclear on a “level playing field” with the renewables, and would compensate TMI and the other nuclear plants for their “carbon-free” generation of electricity, advocates say.

Opponents characterize both legislative proposals as bailouts that would reward profitable private companies while penalizing Pennsylvania residents and businesses with higher electric rates.

These critics also say that of the five nuclear plants, only TMI is unprofitable. However, FirstEnergy Corp. has said it will prematurely shutter Beaver Valley nuclear power plant in western Pennsylvania in 2021, unless the state acts to support the industry.

Opponents also say the measures would undo increased competition in the energy market resulting from deregulation in Pennsylvania in 1996.

Rep. Tom Mehaffie, R-Lower Swatara, who introduced the House legislation, House Bill 11, on March 11, has estimated his proposal would cost on average $500 million a year.

However, he says loss of the five plants will cost the state $4.6 billion a year, including $788 million more in higher electricity costs.

Mehaffie’s bill is in the House Consumer Affairs Committee, which held its first public hearing on the measure on April 8.

The committee scheduled additional hearings for April 15, April 29 and May 6.

Similar legislation introduced in the state Senate by Sen. Ryan Aument, R-Lancaster, is in the Senate Consumer Protection & Professional Licensure Committee. The committee held a public hearing on Aument’s legislation, Senate Bill 510, on Wednesday. No additional hearings had been scheduled.

The hearings are live-streamed on the Internet. You can watch the hearings on Mehaffie’s bill by going to the website of committee Chairman Rep. Brad Roae, http://www.reproae.com. Copies of the testimony are also available at the site.

You can watch the hearing on the Senate bill by going to Aument’s website, http://www.senatoraument.com.