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Published: Wednesday, 4/14/2004

Bedford Township: Pipeline company protests tax bills

BY LARRY P. VELLEQUETTE
BLADE STAFF WRITER

TEMPERANCE - A Canadian and Texas-based fuel transportation firm with corporate holdings in both Toledo and Temperance has ripped a page from the playbook of Michigan's large utility companies and is threatening to inflict financial damage among about 125 Michigan municipalities, including Bedford Township.

Enbridge Energy, L.P. and Enbridge Pipelines (Toledo) Inc. have more than 200 appeals pending with the Michigan Tax Tribunal challenging the assessed values of their pipeline network and other holdings in the state, including those in Bedford Township.

In the balance of the dispute between the energy firm, which is responsible for transporting about 60 percent of the crude oil refined throughout the Great Lakes, and the cash-strapped local units of government hang hundreds of thousands of much-

population of just over 1,400 people, or about 5 percent of the population of Bedford Township.

"Our defense fund is coordinating the case with 120 townships and four cities across Michigan,'' said Evelyn David, member information director for the Michigan Township Association, the Lansing-based lobbying arm for township governments. "This one is probably the first such case that has [progressed] to this degree. [The Michigan Tax Tribunal] has selected a lead case, but it all hinges on that.''

In Bedford Township's dispute with Enbridge, by way of example, local officials placed a value on its assets of $1,236,680, while the company contends the "true cash value'' of its assets in the township are instead worth $742,008, a difference of $494,672. That discrepancy is worth more than $3,000 if the case is decided in Bedford Township's favor.

The Enbridge Pipelines (Toledo), Inc. system is wholly owned and operated by Enbridge (U.S.) Inc. The pipeline connects to the Lakehead System - a 3,300-mile long pipeline system that branches out across Michigan delivering Canadian crude oil to Great Lakes area refineries - at Stockbridge, Michigan, to the Sunoco and BP refineries in East Toledo and Oregon.

The 35-mile long Toledo pipeline has a capacity of 80,000 barrels per day in heavy crude oil service and became available for service in February 1999. In 2002, deliveries averaged 64,200 barrels per day.

Challenging the assessments or taxation multipliers of their real property has become standard practice for most utility companies. For the last several years, for example, Detroit Edison has undertaken yearly negotiations with officials in Frenchtown Charter Township to attach an agreed-upon value to the Fermi II Nuclear Power Plant. Those annual negotiations have resulted in tens of thousands of dollars in savings to Detroit Edison.

Township officials across the state are worried that the moves by Enbridge will result in less money and lead to even more appeals of local valuations.

"This is the first big case because [township governments are] kind of scared this is going to set a big precedent,'' explained LaSalle Township Supervisor Larry Rutledge, who serves as state treasurer for the Michigan Township Association. "We've got to protect this one township, because if we don't, they'll start coming after every township."

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.



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