Steamboat Springs The nation’s declining dependence on coal-fired power plants is coming home to roost in Northwest Colorado in the form of reduced property tax valuation assigned to plants such as the Hayden Station in Routt County and the Craig Station in Moffat County, and it looks like the result will be reduced property tax revenues here.
The Salt River Project, one of three owners of the two power plants, has won a $6.5 million reduction in its share of the overall valuation of Hayden Station from the State Board of Appeals, resulting in a total refund due of $366,300 dating back to 2014. The reduction was made after accountants with Ernst & Young persuaded the board of appeals that, because the hard assets at the power plant aren’t as salable as they once were, they are “economically obsolete.” The value of the reduction in Moffat County is considerably larger.
However, Routt and Moffat County commissioners may not take the ruling lying down. They are considering hiring an expert outside appraiser who formerly valued power plants for the state of Utah to review the paperwork in the stipulated settlement reached between the Colorado and Salt River at a shared cost of about $3,000. The goal is to learn if there are grounds for the two counties to challenge the state ruling.
“Right now, we’re flying blind,” Routt County Assessor Gary Peterson said. “We don’t do business valuations. We have to rely on the Department of Taxation appraiser, and we’d like to see an independent person review that material. I think we owe it to the taxpayers in other taxing entities to try our best and not just roll over and accept this.”
Hayden Generating Station and Salt River Project
Generation type: steam turbine
Ownership, in addition to Xcel Energy: PacifiCorp, Portland, Oregon, and Salt River Project, Phoenix, Arizona. Xcel is the operator.
Capacity: 446 megawatts from two coal-fired generating units with Unit One producing 184 MW and Unit Two producing 262 MW with Salt River receiving 131 MW of that.
Ownership: Unit One: Xcel Energy - 75.5 percent, PacifiCorp - 24.5 percent; Unit Two: Salt River Project - 50 percent, Excel Energy 37.4 percent and PacifiCorp - 12.6 percent.
Pollution controls: bag houses remove particulates from flue gas, dry scrubbers reduce sulfur dioxide emissions and over-fire air equipment reduces nitrogen oxide emissions.
The result of the reduced valuation of Salt River's share in the power plant will negatively impact a variety of taxing entities, from Routt County government, itself, to the Solandt Hospital, the West Routt Library District and the West Routt Fire Protection District in Hayden.
“The three owners of the Hayden power plant made up 53 percent of the (Hayden) schools’ taxable valuation in tax year 2014 (payable in 2015),” Peterson told Steamboat Today in September 2016.
However, a spokesperson for the Hayden School district previously told Steamboat Today their exposure is limited, because the state of Colorado will backfill the budget shortfall.
But there is also risk involved in challenging the Board of Appeals' stipulated agreement with Salt River. The board reduced the utility’s property valuation for 2016 by 38.7 percent, resulting in a tax refund from Routt County taxing entities of $90,400. But there’s more, including a $113,000 (44.1 percent reduction) tax refund from 2015 and a $162,900 tax refund (49.8 percent valuation reduction), all subject to interest payments of 1 percent per month.
The catch is that Salt River has offered to waive the taxes, amounting to about $50,000, if Routt County doesn’t appeal the new valuation, Peterson said.
The Salt River Project is both the largest water utility and electrical power utility in Arizona but owns the smallest share of the Hayden Station power plant.
And a bigger concern is whether Excel Energy and PacifiCorp., which own bigger shares of the two generating units at the Hayden power plant, will also seek further property tax reductions, even though they’ve already had valuation adjustments for economic obsolescence.
To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1