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MERIDEN — A ruling by a state panel with jurisdiction over power plants should not impact a settlement between the city and the owners of an abandoned power plant on Cathole Mountain.
NRG owns the abandoned plant, which includes two buildings, a fuel tank and a water tank on the side of the Mountain. There had been plans to turn the site into a natural gas-fired generating plant. After dealing with financial problems, NRG later learned no new power generation would be needed in the state before 2022. In April 2012, NRG notified city officials it would be abandoning the project.
The power plant was supposed to bring in more than $100 million in tax revenue, but in 2008, the tax agreement was modified when the project stalled. NRG began making smaller payments than originally scheduled. When it was clear the project would not go forward, NRG made notification of abandonment. NRG has continued to make payments, though some under protest.
The state Siting Council recently handed down a decision in the city’s petition against the energy company. The council found that conditions have changed with NRG’s original application, but it does not call for a decommissioning plan for the property.
In March 2013, the city filed a petition to the Siting Council, stating that NRG had not fulfilled its plans to improve the appearance of the plant and should develop a decommissioning plan. The Siting Council has jurisdiction over power plants, transmission lines, hazardous waste facilities and telecommunications infrastructure.
NRG had argued that the council should not reopen the case after NRG forfeited its permits and certificates for the project. The Siting Council, however, ruled that “there are changed conditions” based on the “partial construction of the facility.” The council decision then states that the conditions “do not warrant a decommission plan.”
The city and NRG had been finalizing an agreement that included the city agreeing to immediately withdraw its petition to reopen the Siting Council decision and request that the Siting Council terminate the project. Part of the agreement between the city and NRG calls for the demolition of the two buildings on the NRG site by the energy company and payments to the city by NRG.
NRG spokesman David Gaier said the company officials are evaluating the Siting Council decision.
“I don’t believe it has any effect on our negotiations with the city moving forward,” Gaier said, noting that the deal has not been finalized.
The City Council agreed to support the settlement earlier this month, but City Manager Lawrence J. Kendzior had noted some of the smaller details still needed to be negotiated.
City Attorney Deborah Moore said the settlement would not be impacted by the Siting Council ruling, but deferred other questions to the city’s hired attorney Phillip Small. Small could not be reached for comment, Thursday.
According to the city’s negotiated settlement with NRG, the two buildings on site must be demolished by June 30, 2014. NRG would retain ownership of the parcel, but it has been actively marketing the site. The term sheet includes 13 different aspects, including the city receiving $500,000 in two payments: one on or before Jan. 31, 2014 and one on or before June 30, 2014.
The agreement also sides with the appraisal the city had done for the property, which was about $1 million more than the NRG appraisal. The fair market value of the property will be set at $2,935,000, putting an annual tax payment by NRG at $71,886.96. The city will also be able to keep $701,800 in performance bonds. NRG must also grant the city “reasonable access” to the site to perform any remaining work.
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