December 19, 2014

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Plant devaluation shocks Avon Lake Schools

Devaluation of the NRG Energy plant will mean costly annual property tax losses for the city and county. CHRONICLE FILE PHOTO

Devaluation of the NRG Energy plant will mean costly annual property tax losses for the city and county. CHRONICLE FILE PHOTO

AVON LAKE — The NRG Energy plant will be polluting a lot less in the future, but it’s also worth substantially less.

Devaluation of the plant by the Ohio Department of Taxation from about $35.9 million to nearly $16.4 million means significantly less money for the city, county and school district.

City and county officials have known for months that the aging plant, whose largest unit opened in 1970, was downsizing after being sold by Genon to NRG. The plant was devalued by about $1.2 million in 2009, but the latest devaluation of 54 percent caught officials by surprise.

“This was kind of an eye-opener,” Lorain County Auditor Craig Snodgrass said. “It was a huge drop.”

Snodgrass, who said he gave local leaders the bad news about two weeks ago, said he was unsure how much downsizing had to do with the devaluation. Snodgrass also said he’s unsure if NRG will appeal the assessment. David Gaier, a spokesman for NRG, an $8.4 billion corporation with more than 100 plants nationwide and the largest commercial generator of electricity in the nation, couldn’t be reached for comment Tuesday night.

Mayor Greg Zilka said city officials were not allowed to appeal to the department.

“It’s a huge deal because it creates uncertainty,” Zilka said.

Schools Superintendent Bob Scott, who said he met with NRG officials Monday, said the district is formulating its options. In November, taxpayers passed a 10-year property tax levy that will raise $6.5 million annually in response to the $1.2 million annual depreciation.

Scott said the 3,500-student district, which has an approximately $38 million annual budget, spends about 82 percent of the budget on salaries, which is standard for school districts. Scott said 17 full-time employees have been cut since 2011 through attrition and layoffs due to less money.

In the next two years, 24 teachers are retiring, and Scott said some may not be replaced. Others may be replaced with less-experienced teachers who earn significantly less.

NRG is planning to convert the 732 megawatt plant — a megawatt provides electricity to about 600 homes annually— from a coal-fired to a natural gas plant. The conversion is in response to stricter federal Environmental Protection Agency rules to limit air and water pollution.

The plant, which Genon had been planning to close, is the biggest air polluter in the county. It annually emits some 2.4 metric tons of carbon dioxide, a major cause of asthma, lung cancer and global warming. The plant is also the seventh-largest emitter of mercury in Ohio.

Mercury is a toxic substance causing brain, heart and lung damage and brain damage in children and fetuses. NRG is seeking to continue burning coal at the plant until the conversion to natural gas in 2016.

Scott said he’s happy that the plant will pollute less, but less tax revenue creates more challenges for the district. He said the city and school district plan to hold an informational public meeting in December when they have a clearer picture on the impact of the devaluation to district finances.

“Once the final value of the new plant is established, then we’ll have a better picture of what we need to do long term,” he said.

Reporter Chelsea Miller contributed to this story.

Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.